morning-quant-ride

Morning Brief

Wake up to the Morning Quant Ride, your global markets update every morning!

Global Stocks Positive Ahead of US 2Q GDP Release

Jul 27, 2018

US Stocks                                                                                                                                                                           Start Your Free Trial Today

As of 7:50 am

  • Global stocks are advancing this AM boosted by a positive start to 2Q earnings season and ahead of the 2Q GDP release for the United States at 8:30am this morning
     
  • The median estimate for US 2Q GDP is +4.2%
  • US stocks index futures are pointing to a positive open in NY with the Dow Jones minis +0.12%, S&P500 minis +0.08% and Nasdaq 100 minis +0.26%
  • The VIX is little changed this morning and is currently at 12.14 after closing at 12.14 yesterday
  • EEM September 2018 OTM Calls, SPY July 27 OTM Calls, UUP August 17 OTM Puts, and Apple (AAPL) July OTM July 27 Calls are the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -3.6 basis points to 2.9728%
  • The US Treasury 2s-10s Spread has widened 4.4 basis points to 0.3%
  • WTI Crude is currently down -2.1% to USD$69.61/bbl with the Brent-WTI spread up USD$2.11 to USD$4.43/bbl
  • Gold is currently down -0.29% to USD$1219.2/oz

International Stocks

  • European stocks are rallying this morning and are set to have the best week in over four month with investor sentiment boosted by the US-EU agreement to suspend implementation of tariffs and better than expected earnings results: Euro Stoxx 600 +0.36%, FTSE 100 +0.54%, DAX +0.56%, and CAC 40 +0.24%​​​​​​
  • Telecommunications(+2.25%), Basic Resources(+1.10%), Banks(+1.03%) stocks are the top performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.57x
  • VSTOXX, the European stocks equivalent of the VIX, is moving little changed this morning and is currently at 11.56after closing at 12.14 last week
  • German 10-Year Bonds are lower with yields up 7 basis points to 0.407%
  • Asian stocks closed their trading sessions mixed as Japanese and Hong Kong stocks finish the week positive following news of Beijing’s desire to implement fiscal stimulus to boost the Chinese economy: Nikkei 225 +0.56%, CSI 300 -0.42%, HSI +0.08% and Hang Seng China Enterprise +0.24%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 2.41x
  • Investor sentiment for Hong Kong stocks finished positive with the advance/decline ratio for the Hang Seng closing at 2.3x
  • Japan 10-Year Government Bonds are lower with yields up 10 basis points to 0.104%
  • JGBs 2s-10s Spread has widened 1 basis points to 0.21%

Cryptos

  • A Bank of Canada (BOC) paper suggests a central bank-backed digital currency could boost consumption 0.64 points in Canada and 1.6 points in the United States.  The BOC analysis argues that substituting a digital currency for cash would permit central banks to have a higher level of flexibility in managing monetary policy.
  •  Xiong’An Blockchain Fund is denying reports that that the Hangzhou city government has demanded it stop promoting itself as a government-backed fund.
  • Accenture Global Solutions is considering using blockchain technology to streamline and automate shipping logistics.  The blockchain system would determine defined characteristics for items shipped and store that information.  Items will then be tracked as they are shipped from one location to another, using the data stored on the ledger to confirm their status and condition.
  • The SEC rejected application for a Bitcoin ETF by Winkelvoss twins again.  In its rejection, the SEC cited as a major concern the fact that “a significant portion of Bitcoin trading occurs on unregulated exchanges outside of the United States”.
  • The CME announces it will not be introducing futures on Altcoins any time soon.  The exchange cites the novelty and volatility of altcoins as the biggest impediment to launching futures on these products.

 

*Data in Price Return, Source: Stockdio

S&P 500 Sector & Russell 1000 Factor Performance

*Data in Price Return, Source: Stockdio

 

*Data in Price Return, Source: Stockdio

Conviction Buy Laggards From Yesterday We Are Watching Today

Click name for Q-Factor rating and financial data.

Altria Group, Inc. - 24.58% off its 52wkH on 12/19/2017, reports earnings on 07/26/2018

Broadcom Inc. - 21.88% off its 52wkH on 11/27/2017, reports earnings on 09/06/2018

DXC Technology Company - 19.17% off its 52wkH on 03/20/2018, reports earnings on 08/07/2018

Laboratory Corporation of America Holdings - 8.31% off its 52wkH on 06/11/2018, reports earnings on 10/25/2018

MCBC Holdings, Inc. - 19.45% off its 52wkH on 05/18/2018, reports earnings on 09/07/2018

Old Dominion Freight Line, Inc. - 12.15% off its 52wkH on 06/12/2018, reports earnings on 07/26/2018

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

Amazon (AMZN) rose 5% post-market after posting strong 3Q guidance expecting operating income of US$1.4-2.4bn. 2Q operating income of US$2.98bn came well above market expectations of US$1.71bn, despite sales coming a touch below expectations.

BP Plc (BP LN)  agreed to buy most of BHP Billiton’s (BHP AU) onshore US oil and gas assets.  These include valuable assets in the Permian Basin, the fastest growing oil region on the planet today.  BP also increased its dividend by 2.5%

Facebook (FB), amid a cratering stock price, is pointing the finger at EU’s General Data Protection Regulations as the reason it saw fewer users on their social network.  Facebook saw more than US$100bn of market cap disappear yesterday.

Hitachi (6501 JP) reported 1Q operating income well above expectations (Y148.2bn vs Y125.6bn expected), net income came well above (Y105.3BN vs Y51.5bn expected).  Hitachi maintained full year guidance.

Intel (INTC) reported strong 2Q results, beating expectation on most metrics.  Full year revenue guidance of US$69.5bn-a record if delivered-was welcome news initially but once the market did the math it became apparent that indicate slower growth later in the year and the shares are lower pre market to $49.00 (-6.06%)

Lam Research (LRCX) rose as much as 8% in after-hours trading after management said they expect a resumption of growth by the end of 2018 (fiscal 2Q). This was despite revenue guidance for fiscal 1Q that was well below expectations

Nomura Holdings (8604 JP) closed 5.8% lower after negative news that was a surprise for the market.  Weak fixed income and domestic operations contributed to the weak results.

Qualcom’s (QCOM) failed bid for NXP (NXPI) saw China express regret over its lack of completion.  The failed deal was a resultof rising tensions between the US and China

Reckitt Benckiser (RB LN) revised sales guidance higher

Siemens Renewable Energy (SGRE SM) reported 3Q sales ofUS$2.49bn, 7% below market expectations.  Management said new US tariffs will have a “clear impact” on their business and could add up to 4% to prices.

TAL Education (TAL) reported guidance for 2Q of US$647-660mn compared estimate of US$704.1mn, TAL is up 0.45% to $36.05

Western Digital (WDC) reported 4Q adjusted EPS above market expectations but the focus was on 1Q guidance that was weaker.  1Q guidance for EPS of US$3-3.10 is well below US$3.55 expected while revenue guidance of US$5.1-52bn is below US$5.38bn expected.

Cryptocurrencies Today

*Source: Stockdio

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
Encompass Health Corporation EHC Healthcare Healthcare Facilities 7.10% 7.94% 52.64%
Roper Technologies, Inc. ROP Industrials Industrial Conglomerates 5.19% 6.62% 17.21%
Torchmark Corporation TMK Financials Life and Health Insurance 3.47% 3.97% -4.33%
First American Financial Corporation FAF Financials Property and Casualty Insurance 2.86% 2.83% -0.04%
Tractor Supply Company TSCO Consumer Discretionary Specialty Stores 2.81% 0.61% 7.51%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Baxter International Inc. BAX Healthcare Healthcare Equipment -3.66% -1.72% -0.18%
Mastercard Incorporated MA Information Technology Data Processing and Outsourced Services -3.17% 0.32% 5.52%
Laboratory Corporation of America Holdings LH Healthcare Healthcare Services -2.85% -6.63% -2.78%
Old Dominion Freight Line, Inc. ODFL Industrials Trucking -2.33% -3.01% -2.92%
CME Group Inc. CME Financials Financial Exchanges and Data -1.81% -1.50% 1.55%

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
Airborne Wireless Network ABWN Telecommunication Services Alternative Carriers -23.08% -25.00% -87.50%
QEP Resources, Inc. QEP Energy Oil and Gas Exploration and Production -10.13% -11.72% -12.47%
Domo, Inc. DOMO Information Technology Application Software -7.22% -2.25% -33.11%
Immunomedics, Inc. IMMU Healthcare Biotechnology -3.84% -8.99% 0.51%
Zscaler, Inc. ZS Information Technology Systems Software -3.76% -0.30% 10.97%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Geron Corporation GERN Healthcare Biotechnology 6.83% 0.29% 91.11%
PTC Therapeutics, Inc. PTCT Healthcare Biotechnology 4.23% -2.03% 134.83%
Applied Optoelectronics, Inc. AAOI Information Technology Communications Equipment 3.71% -4.93% 5.02%
Camping World Holdings, Inc. CWH Consumer Discretionary Automotive Retail 3.02% -6.16% -48.20%
C&J Energy Services, Inc. CJ Energy Oil and Gas Equipment and Services 2.74% 1.17% -32.84%

Source: S&P Capital IQ

Events Calendar

On Mobile/Tablet scroll to the right

Company Name Ticker Event Date Event Type Q-Factor Score
The Goodyear Tire & Rubber Company GT 7/27/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: D
Zimmer Biomet Holdings, Inc. ZBH 7/27/2018 Earnings Release Date US Large-Cap: B
Twitter, Inc. TWTR 7/27/2018 Earnings Release Date US Large-Cap: F, US Information Technology: F
Phillips 66 PSX 7/27/2018 Earnings Release Date US Large-Cap: C
ImmunoGen, Inc. IMGN 7/27/2018 Earnings Release Date US Large-Cap: F
Franklin Resources, Inc. BEN 7/27/2018 Earnings Release Date US Large-Cap: C
Iron Mountain Incorporated IRM 7/27/2018 Earnings Release Date US Large-Cap: C
Synchrony Financial SYF 7/27/2018 Earnings Release Date US Large-Cap: D
TCF Financial Corporation TCF 7/27/2018 Earnings Release Date US Large-Cap: C
Tenneco Inc. TEN 7/27/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: C
Moody's Corporation MCO 7/27/2018 Earnings Release Date US Large-Cap: B
AbbVie Inc. ABBV 7/27/2018 Earnings Release Date US Large-Cap: A
Cabot Oil & Gas Corporation COG 7/27/2018 Earnings Release Date US Large-Cap: C
Ventas, Inc. VTR 7/27/2018 Earnings Release Date US Large-Cap: D
Exxon Mobil Corporation XOM 7/27/2018 Earnings Release Date US Large-Cap: C
Weyerhaeuser Company WY 7/27/2018 Earnings Release Date US Large-Cap: B
Portland General Electric Company POR 7/27/2018 Earnings Release Date US Large-Cap: C
Bank of Gansu Co., Ltd. SEHK:2139 7/27/2018 Estimated Earnings Release Date China All-Cap: D
China YuHua Education Corporation Limited SEHK:6169 7/27/2018 Estimated Earnings Release Date China All-Cap: C
Future Land Development Holdings Limited SEHK:1030 7/28/2018 Estimated Earnings Release Date China All-Cap: A
KLA-Tencor Corporation KLAC 7/29/2018 Estimated Earnings Release Date US Large-Cap: A, US Information Technology: A
Allison Transmission Holdings, Inc. ALSN 7/29/2018 Earnings Release Date US Large-Cap: A, US Industrials: A

Source: S&P Capital IQ