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Morning Brief

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Global Stocks Positive after Bank of Japan (BOJ) decision to keep rates unchanged

Jul 31, 2018

US Stocks                                                                                                                                                                           Start Your Free Trial Today

  • Global stocks are moving up this AM after the Bank of Japan (BOJ) decided to keep its policy rate unchanged and announced that it will continue to buy equity ETFs
  • Investors will be closely following Apple (AAPL) earnings after the close as bellwether for the US tech sector
  • US stocks index futures are pointing to a positive open in NY with the Dow Jones minis +0.14%, S&P500 minis +0.24% and Nasdaq 100 minis +0.12%
  • The VIX is little changed this morning and is currently at 13.61 after closing at 14.26 yesterday
  • XLF August 17 OTM Calls, QQQ August 17 OTM Puts, Morgan Stanley (MS) OTM Calls, and Altaba (AABA) August 17 OTM Puts are the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -2.04 basis points to 2.9524%
  • The US Treasury 2s-10s Spread has narrowed 2.25 basis points to 0.29%
  • WTI Crude is currently up 2.1% to USD$70.13/bbl with the Brent-WTI spread down USD$-2.21 to USD$4.30/bbl
  • Gold is currently little changed -0.08% to USD$1220.49/oz

International Stocks

  • European stocks are advancing this morning. Better than expected results from Credit Suisse (CSGN.SW), and a positive Morgan Stanley report on Spanish banks offset rising inflation (+2.1% Y/Y) and slower than expected Euro-area GDP growth of +0.3% in C2Q2018 against estimates of +0.4%. Y/Y Euro-area GDP growth was reported at +2.7% against estimates of +2.8%
  • Euro Stoxx 600 is currently up 0.2%, FTSE 100 0.6%, DAX -0.01%, and the CAC 40 0.08%
  • Banks(+1.11%), Travel & Leisure(+0.94%), Oil & Gas(+0.87%) stocks are the top performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is neutral with the advance/decline ratio for the Euro Stoxx 600 currently at 1.16x
  • VSTOXX, the European stocks equivalent of the VIX, is little changed this morning and is currently at 12.6 after closing at 12.71 yesterday
  • German 10-Year Bunds are lower with yields up 0.2 basis points to 0.448%
  • UK 10-Year GILTs are higher with yields down -0.3 basis points to 1.34%
  • Asian stocks closed their trading sessions mixed following the BOJ decision to keep its policy rate unchanged and tech stocks dragged down Hong Kong indices
  • Nikkei 225 finished up 0.04%, Hang Seng -0.52%, Hang Seng China Enterprise -0.2%, and the CSI 300 0.07%
  • Tencet (SEHK:700) finished down 3.3% following the sell-off in US tech stocks in the previous day
  • Marine Transportation(+2.2%), Rubber Products(+0.76%), Mining(+0.63%) stocks were the top performers among Japanese stocks today
  • Information technology (-3.21%), health care (-1.44%), and consumer staples (-0.56%) were the worst performing sectors in the Hang Seng
  • Japan 10-Year Government Bonds are higher with yields down -4.0 basis points to 0.062%
  • JGBs 2s-10s Spread has narrowed 4.6 basis points to 0.17%
  • JPY¥ is currently up 0.378% against the USD$ to 111.46

Cryptos

  • Agricultural Bank of China (ABC), the world fourth largest bank by assets, announces it will making its first loan on a blockchain system.  The loan, valued at USD$300k, is meant to support the local tea industry in the Guizhou province.   
  • Major Cineplex, the largest movie theater chain in Thailand, is integrating cryptocurrency payments to permits moviegoers to buy anything from tickets to popcorn.  Major Cineplex is partnering with RapizPay to deploy the digital currency payment system. 

*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: Stockdio

Russell 1000 Factor Performance

Data in Total Return as of Previous Day's EOD, Source: Stockdio

Top Buy Laggards From Yesterday We Are Watching Today

Click name for Q-Factor rating and financial data.

Applied Industrial Technologies, Inc. - 4.18% off its 52wkH on 07/20/2018, reports earnings on 08/10/2018

Facebook, Inc. - 23.17% off its 52wkH on 07/25/2018, reports earnings on 10/30/2018

Lam Research Corporation - 20.58% off its 52wkH on 03/13/2018, reports earnings on 08/03/2018

Micron Technology, Inc. - 18.20% off its 52wkH on 05/30/2018, reports earnings on 09/28/2018

ON Semiconductor Corporation - 18.63% off its 52wkH on 03/13/2018, reports earnings on 07/30/2018

SMART Global Holdings, Inc. - 44.47% off its 52wkH on 01/00/1900, reports earnings on 09/28/2018

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

Apple (AAPL) reports after the close today and will closely watched as a tech bellweather given the recent selloff on the sector.  Consensus for sales of iPhones in the quarter is 41.3mn units.

BP (BP) saw 2Q profit above expectations with adjusted net income of US$2.82bn versus US$2.66bn expected.  They also expect higher demand, more divestures and a generally firmer oil market for the rest of 2018.

Credit Suisse (CSGN SW) delivered 2Q profit above with total revenues coming 5% above consensus and pre-tax profit coming 26% above expectations (CHF 1.28bn vs 1.2bn expected).

Eaton (ETN) reported 2Q EPS of US$1.39, up 21% y/y and well above guidance.  Full year guidance was raised with a 14% y/y sales growth expected at mid-point.

Lumber Liquidators (LL) reported an unexpected loss of 5 cents per share as the market was expecting 24 cents.  Sales grew 4.7% versus 2.8% expected, 2018 guidance was reiterated.

Nintendo (7974 JP) reported operating profit of 30.5bn yen above the 25.6bm expected while revenue came short at 168bn yen with 186.9bn expected.  Greater software sales offset weaker than expected Switch console sales.

Panasonic (6752 JP) delivered 1Q results in line with operating income of 99.96bn yen compared to 99.18bn expected, net income of 57.4bn was a touch above 56.09bn expected.

Pfizer (PFE) delivered 2Q adjusted EPS of US$0.81 versus US$0.74 expected but cut its full year 2018 revenue forecast to US$53-55bn, down from US$53.5-55.5bn. The market consensus for revenue is US$54.29bn.

Sohu.com (SOHU) was downgraded to Sell from Neutral at BOCOM International Holdings with price target dropping from $33 to $26 after lowering guidance for 2018 when reporting this quarter’s earnings results.

Takeda (4502 JP) reported operating income in 1Q of 98.9bn yen well above 76.2bn expected, net income of 78.3bn yen was also well above the 54.1bn expected.  Full year guidance for net income of 139bn yen is below consensus of 160bn.

Tencent (TCEHY) has seen US$143bn in market cap wiped out since falling 25% from its peak in January, even more than the US$136bn lost by Facebook (FB)

Wellcare (WCG) delivered 2Q EPS well above expectations at US$3.69, 66 cents more than expected.  Revenue of US$4.64bm, +7.9% y/y, was US$20m shy of 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
Burlington Stores, Inc. BURL Consumer Discretionary Apparel Retail 1.91% -0.20% 24.15%
Broadcom Inc. AVGO Information Technology Semiconductors 1.86% -0.36% -12.36%
Five Below, Inc. FIVE Consumer Discretionary Specialty Stores 1.46% -1.28% 47.15%
Tractor Supply Company TSCO Consumer Discretionary Specialty Stores 1.42% -1.06% 3.45%
Louisiana-Pacific Corporation LPX Materials Forest Products 1.25% 1.86% 2.13%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Facebook, Inc. FB Information Technology Internet Software and Services -3.96% -22.78% -13.57%
Fortinet, Inc. FTNT Information Technology Systems Software -3.33% -7.03% 1.91%
Cboe Global Markets, Inc. CBOE Financials Financial Exchanges and Data -2.81% -5.73% -4.59%
Moody's Corporation MCO Financials Financial Exchanges and Data -2.34% -7.28% 0.79%
Visa Inc. V Information Technology Data Processing and Outsourced Services -2.44% -3.76% 3.65%
             

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
Okta, Inc. OKTA Information Technology Internet Software and Services -7.46% -11.12% 1.25%
Madrigal Pharmaceuticals, Inc. MDGL Healthcare Biotechnology -6.90% -6.86% -8.05%
Tricida, Inc. TCDA Healthcare Pharmaceuticals -7.09% -9.98% -18.53%
New Relic, Inc. NEWR Information Technology Internet Software and Services -5.94% -10.78% -1.51%
Neurocrine Biosciences, Inc. NBIX Healthcare Biotechnology -5.30% -6.04% 3.37%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Helmerich & Payne, Inc. HP Energy Oil and Gas Drilling 4.62% 8.19% -1.55%
Oceaneering International, Inc. OII Energy Oil and Gas Equipment and Services 3.76% 0.52% 27.77%
Rowan Companies plc RDC Energy Oil and Gas Drilling 3.72% 4.01% -5.62%
SM Energy Company SM Energy Oil and Gas Exploration and Production 3.47% -0.11% 24.41%
Chesapeake Energy Corporation CHK Energy Oil and Gas Exploration and Production 3.40% 3.40% 15.15%

Source: S&P Capital IQ

Events Calendar

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Company Name Ticker Event Date Event Type Q-Factor Score
iQIYI, Inc. IQ 7/31/2018 Earnings Release Date China All-Cap: F
WellCare Health Plans, Inc. WCG 7/31/2018 Earnings Release Date US Large-Cap: B
Xylem Inc. XYL 7/31/2018 Earnings Release Date US Large-Cap: B, US Industrials: C
American Tower Corporation (REIT) AMT 7/31/2018 Earnings Release Date US Large-Cap: C
Fidelity National Information Services, Inc. FIS 7/31/2018 Earnings Release Date US Large-Cap: B, US Information Technology: B
Harris Corporation HRS 7/31/2018 Earnings Release Date US Large-Cap: B, US Industrials: C
AMETEK, Inc. AME 7/31/2018 Earnings Release Date US Large-Cap: A, US Industrials: A
Ralph Lauren Corporation RL 7/31/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Huntsman Corporation HUN 7/31/2018 Earnings Release Date US Large-Cap: B
Neurocrine Biosciences, Inc. NBIX 7/31/2018 Earnings Release Date US Large-Cap: F
Akamai Technologies, Inc. AKAM 7/31/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
Hologic, Inc. HOLX 7/31/2018 Earnings Release Date US Large-Cap: C
Coherent, Inc. COHR 7/31/2018 Earnings Release Date US Large-Cap: C, US Information Technology: B
NuVasive, Inc. NUVA 7/31/2018 Earnings Release Date US Large-Cap: C
The Scotts Miracle-Gro Company SMG 7/31/2018 Earnings Release Date US Large-Cap: C
FirstEnergy Corp. FE 7/31/2018 Earnings Release Date US Large-Cap: C
Anadarko Petroleum Corporation APC 7/31/2018 Earnings Release Date US Large-Cap: D
Fiserv, Inc. FISV 7/31/2018 Earnings Release Date US Large-Cap: A, US Information Technology: A
Devon Energy Corporation DVN 7/31/2018 Earnings Release Date US Large-Cap: F
Hyatt Hotels Corporation H 7/31/2018 Earnings Release Date US Large-Cap: F, US Consumer Discretionary: C
Douglas Emmett, Inc. DEI 7/31/2018 Earnings Release Date US Large-Cap: C
Microsemi Corporation MSCC 7/31/2018 Estimated Earnings Release Date US Large-Cap: B, US Information Technology: C
Eversource Energy ES 7/31/2018 Estimated Earnings Release Date US Large-Cap: C
Verisk Analytics, Inc. VRSK 7/31/2018 Estimated Earnings Release Date US Large-Cap: A, US Industrials: C
Express Scripts Holding Company ESRX 7/31/2018 Earnings Release Date US Large-Cap: A
Dominion Energy, Inc. D 7/31/2018 Estimated Earnings Release Date US Large-Cap: B
Essex Property Trust, Inc. ESS 7/31/2018 Earnings Release Date US Large-Cap: D
Public Service Enterprise Group Incorporated PEG 7/31/2018 Estimated Earnings Release Date US Large-Cap: C
Concho Resources Inc. CXO 7/31/2018 Earnings Release Date US Large-Cap: D
Corcept Therapeutics Incorporated CORT 7/31/2018 Estimated Earnings Release Date US Large-Cap: D
Northrop Grumman Innovation Systems OA 7/31/2018 Estimated Earnings Release Date US Large-Cap: C, US Industrials: C
bluebird bio, Inc. BLUE 7/31/2018 Estimated Earnings Release Date US Large-Cap: D
Gramercy Property Trust GPT 7/31/2018 Estimated Earnings Release Date US Large-Cap: C
Square, Inc. SQ 7/31/2018 Earnings Release Date US Large-Cap: D, US Information Technology: C
Baidu, Inc. BIDU 7/31/2018 Earnings Release Date China All-Cap: A

Source: S&P Capital IQ