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Morning Brief

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Morning Quant Ride

Jul 26, 2018

US Stocks                                                                                                                                                                           Start Your Free Trial Today

As of 7:30am

  • Global stocks are advancing this AM following news that US President Donald Trump and European Union (EU) Chief Jean-Claude Juncker agreed to suspend implementing tariffs following their meeting at the White House yesterday.
  • US stocks index futures are pointing to a mixed open in NY with the Dow Jones minis +0.10%, S&P500 minis -0.20% and Nasdaq 100 minis -0.84%
  • Facebook (FB) is down 19.94% to USD$174 in premarket trading following disappointing earnings guidance.  The move in Facebook (FB) is driving the negative move in both S&P 500 and Nasdaq futures
  • The VIX is flat this morning, currently at 12.36 after closing at 12.29 yesterday
  • SMH August 17 OTM Puts, XLF August 17 OTM Calls, EEM August 24 and December 2018 OTM Calls, and SPY July 27 OTM Calls are the most heavily traded options contracts in the US pre-market
  • The yield on the US 10-year government bond is down 1.1 basis points to 2.963%
  • The USD$ Index (DXY) is little changed, +0.06%, weakness in the AUD$ (-0.40% to 0.7425) offset by strength in JPY (+0.13% to 110.83)

International Stocks

  • European stocks are rallying this morning following news that the US and EU agreed to suspend the implementation of tariffs: Euro Stoxx 600 +0.42%, FTSE 100 -0.03%, DAX +1.22%, and CAC 40 +0.42%
  • Autos and mining stocks are leading the positive move in European stocks today
  • Investor sentiment is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 1.84
  • VSTOXX, the European stocks equivalent of the VIX, is moving up this AM, presently at 12.7800 after going as high as 13.7671 yesterday
  • Asian stocks closed their trading sessions mixed with as the US-EU agreement to suspend new tariffs boosted investor sentiment and allayed worries that there will be a breakout of a global trade war: Nikkei 225 -0.12%, CSI 300 -1.16%, HSI -0.48% and Hang Seng China Enterprise -0.48%
  • Tencent (700 HK) closed down over 1.3%, impacting Hong Kong and Chinese stocks, in sympathy with Facebook’s (FB) disappointing guidance

Cryptos

  • Waves decentralized exchange (DEX) was hacked on Tuesday, the first day it exited its beta test.  Hackers were able to phish for information in the personal wallets of users. 
  • Ethereum Chrome browser extension MetaMask was pulled from the Chrome Web store yesterday.  It was listed again, 5 hours later.  MetaMask has said it is unsure why its extension was pulled from the Chrome Web store.  MetaMask is one of the oldest and widely used decentralized apps (DApps) on the Ethereum network.
  • Augur has launched a platform that permits users to bet when certain public figures will die.  If a user believes the public figure will die, they buy shares with ETH. If a user believes the public figure won’t die, they can short the bet by selling shares. If a user’s prediction is correct, they profit from the outcome.
  • US Commodity Futures Trading Commission (CTFC) Chairman Christopher Giancarlo says the CTFC is falling behind and needs to begin testing the blockchain technology during testimony to House Committee on Agriculture.  Chairman Giancarlo suggests the CTFC is four years behind other global institutions like the Bank of England (BOE) as it relates to testing blockchain.
  • Japan Virtual Currency Exchange Association is looking to implement leverage limits on crypto trading to protect individual investors.  The association consists of 16 government-approved crypto exchanges. 

*Data in Total Return; Source: S&P Capital IQ

S&P 500 Sector Performance

*Data in Total Return as of Previous Day's EOD, Source: S&P Capital IQ

Top Buy Laggards From Yesterday We Are Watching Today

Click name for Q-Factor rating and financial data.

Allison Transmission Holdings, Inc. - 9.02% off its 52wkH on 10/31/2017, reports earnings on 07/30/2018

Anglo American PLC (LSE: AAL) shares are trading 1.27% lower, after the company reported 1H2018 EPS that missed expectations ($1.23 vs $1.28)

Diodes Incorporated - 2.14% off its 52wkH on 07/24/2018, reports earnings on 08/07/2018

MCBC Holdings, Inc. - 18.20% off its 52wkH on 05/18/2018, reports earnings on 09/07/2018

ON Semiconductor Corporation - 14.02% off its 52wkH on 03/13/2018, reports earnings on 07/30/2018

Tractor Supply Company - 5.47% off its 52wkH on 01/22/2018, reports earnings on 07/26/2018

United Rentals, Inc. - 23.27% off its 52wkH on 03/13/2018, reports earnings on 10/19/2018

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

AstraZeneca (AZN LN) saw strong 2Q results and raised guidance, with management pointing to a rich pipeline for the remainder of 2018 as the reason for the raise.  Multiple new drugs saw sales growth above analysts’ expectations.

British American Tobacco (BATS LN) reported 2Q slightly above expectations and reported the US FDA has approved their sale of heated-tobacco products.

Daimler AG (DAI GR) reported weak 2Q results as expected.  Management reported that investors should also expect weak 3Q results as pricing challenges in their Mercedes division persist.

Facebook (FB) shares plunged after reporting quarterly sales and daily users data that came below expectations.  Shares were down as much as 24% in after hours trading yesterday.  They expect weak numbers to continue in both 3Q and 4Q.

Macquarie (MQG AU) appointed Shemara Wikramanayake CEO making her one of the few female CEOs on the global banking sector.

Mattel Inc (MAT) will reportedly be cutting 2,200 jobs, after the company posted higher than expected losses per share yesterday (-$0.56 vs -$0.30). Mattel stock has plummeted 10.50% to $14.58 before the open

Nokia Oyj (ERICB SS) shares sold off after reporting 2Q results that came below the expectations.  Management reported that 5G spending has yet to pick up as expected and instead, customers are spending on 5G without increasing overall investment budgets.

PayPal (PYPL) reported disappointing 3Q outlook with revenue expectations missing expectations despite Venmo seeing a 78% growth in transaction volume

Qualcomm (QCOM) announced that it is terminating its $44 billion acquisiton pursit of NXP Semicondutors (NXPI), as rising trade tensions created an increasingly difficult merger enviornment. Qualcomm is required to pay NXP SSeminconductors a $2 billion termination fee. The company further announced a $5 billion share repurchase. Sahres of Qualcomm are up 4.85% to $62.30 pre-market

Roche (ROG SW) reported strong 2Q results and raised guidance for the rest of 2018.  Management cited the strong launch of a multiple sclerosis drug, which saw a tripling of sales, as a main driver for the improved outlook.

Cryptocurrencies Today

*Source: Stockdio, Data in Price Return

Stock Movers

Top Buy Winners and Losers

On Mobile/Tablet scroll to the right

Winners  Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Waste Management, Inc. WM Industrials Environmental and Facilities Services 7.79% 6.23% 1.78%
IDEX Corporation IEX Industrials Industrial Machinery 6.76% 6.43% 12.93%
Norfolk Southern Corporation NSC Industrials Railroads 4.91% 4.02% 16.19%
Altaba Inc. AABA Information Technology Internet Software and Services 4.56% 5.81% 10.99%
Total System Services, Inc. TSS Information Technology Data Processing and Outsourced Services 4.16% 5.33% 19.28%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Prudential Financial, Inc. PRU Financials Life and Health Insurance -1.20% 1.81% 3.70%
Cable One, Inc. CABO Consumer Discretionary Cable and Satellite -1.03% -4.40% -2.78%
Jefferies Financial Group Inc. JEF Financials Multi-Sector Holdings -0.95% 0.35% 0.44%
Analog Devices, Inc. ADI Information Technology Semiconductors -0.84% -1.17% 0.60%
Louisiana-Pacific Corporation LPX Materials Forest Products -0.90% -1.50% -3.27%

Source: S&P Capital IQ

Top Short Winners and Losers

On Mobile/Tablet scroll to the right

Winners Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Tricida, Inc. TCDA Healthcare Pharmaceuticals -7.35% -8.14% -9.36%
PTC Therapeutics, Inc. PTCT Healthcare Biotechnology -4.90% -5.66% 10.77%
Geron Corporation GERN Healthcare Biotechnology -3.88% -6.12% -6.12%
Chesapeake Energy Corporation CHK Energy Oil and Gas Exploration and Production -2.43% -3.08% -15.84%
Puma Biotechnology, Inc. PBYI Healthcare Biotechnology -2.25% -3.94% -15.55%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Groupon, Inc. GRPN Consumer Discretionary Internet and Direct Marketing Retail 10.02% 12.13% 3.33%
Avalara, Inc. AVLR Information Technology Application Software 7.67% 3.31% 0.00%
Global Blood Therapeutics, Inc. GBT Healthcare Biotechnology 6.55% 4.23% 9.53%
Tenet Healthcare Corporation THC Healthcare Healthcare Facilities 5.26% 10.65% 156.27%
Penumbra, Inc. PEN Healthcare Healthcare Equipment 5.21% 5.87% 54.41%

*Source: S&P Capital IQ

Events Calendar

On Mobile/Tablet scroll to the right

Company Name Ticker Event Date Event Type Q-Factor Score
KKR & Co. Inc. KKR 7/26/2018 Earnings Release Date US Large-Cap: F
Alaska Air Group, Inc. ALK 7/26/2018 Earnings Release Date US Large-Cap: C, US Industrials: C
First American Financial Corporation FAF 7/26/2018 Earnings Release Date US Large-Cap: A
ABIOMED, Inc. ABMD 7/26/2018 Earnings Release Date US Large-Cap: B
W. R. Grace & Co. GRA 7/26/2018 Earnings Release Date US Large-Cap: B
Xerox Corporation XRX 7/26/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
Under Armour, Inc. UAA 7/26/2018 Earnings Release Date US Large-Cap: F, US Consumer Discretionary: F
Penn National Gaming, Inc. PENN 7/26/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Altria Group, Inc. MO 7/26/2018 Earnings Release Date US Large-Cap: B, US Consumer Staples: A
PG&E Corporation PCG 7/26/2018 Earnings Release Date US Large-Cap: D
Raytheon Company RTN 7/26/2018 Earnings Release Date US Large-Cap: C, US Industrials: B
MPLX LP MPLX 7/26/2018 Earnings Release Date US Large-Cap: C
S&P Global Inc. SPGI 7/26/2018 Earnings Release Date US Large-Cap: A
CMS Energy Corporation CMS 7/26/2018 Earnings Release Date US Large-Cap: C
NetScout Systems, Inc. NTCT 7/26/2018 Earnings Release Date US Large-Cap: C, US Information Technology: B
Ally Financial Inc. ALLY 7/26/2018 Earnings Release Date US Large-Cap: B
Tempur Sealy International, Inc. TPX 7/26/2018 Earnings Release Date US Large-Cap: F, US Consumer Discretionary: D
Dunkin' Brands Group, Inc. DNKN 7/26/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: A
Alexion Pharmaceuticals, Inc. ALXN 7/26/2018 Earnings Release Date US Large-Cap: D
Leidos Holdings, Inc. LDOS 7/26/2018 Earnings Release Date US Large-Cap: B, US Information Technology: A
PulteGroup, Inc. PHM 7/26/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: B
McKesson Corporation MCK 7/26/2018 Earnings Release Date US Large-Cap: D
LKQ Corporation LKQ 7/26/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
New Residential Investment Corp. NRZ 7/26/2018 Earnings Release Date US Large-Cap: D
Carter's, Inc. CRI 7/26/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Comcast Corporation CMCSA 7/26/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: C
D.R. Horton, Inc. DHI 7/26/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
CME Group Inc. CME 7/26/2018 Earnings Release Date US Large-Cap: A
Allergan plc AGN 7/26/2018 Earnings Release Date US Large-Cap: B
Marsh & McLennan Companies, Inc. MMC 7/26/2018 Earnings Release Date US Large-Cap: B
Aaron's, Inc. AAN 7/26/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Roper Technologies, Inc. ROP 7/26/2018 Earnings Release Date US Large-Cap: A, US Industrials: B
The Hershey Company HSY 7/26/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: B
Martin Marietta Materials, Inc. MLM 7/26/2018 Earnings Release Date US Large-Cap: C
Cullen/Frost Bankers, Inc. CFR 7/26/2018 Earnings Release Date US Large-Cap: B
Lear Corporation LEA 7/26/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: B
Tractor Supply Company TSCO 7/26/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: C
ConocoPhillips COP 7/26/2018 Earnings Release Date US Large-Cap: C
Praxair, Inc. PX 7/26/2018 Earnings Release Date US Large-Cap: C

Source: S&P Capital IQ