morning-quant-ride

Morning Brief

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

Global Stocks Negative After US Government Threat to Increase Tarrifs

Aug 01, 2018

US Stocks                                                                                                                                                                           Start Your Free Trial Today

As of 7:30 a.m

  • Global stocks are declining up this AM after the US government attempts to ratchet up the pressure on Beijing in US-Sino trade negotiations by suggesting that the US will raise the tariff rate from 10% to 25% on an additional USD$200bn in imports from China
  • 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 mixed open in NY following a strong earnings result from Apple (AAPL) last night with the Dow Jones minis -0.14%, S&P500 minis -0.04% and Nasdaq 100 minis +0.21%
  • The VIX is down to 13.17 after closing at 14.26 yesterday
  • EEM September 2018 OTM Calls, Altaba (AABA) August 17 OTM Puts, and XLF September 2018 OTM Calls are the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are lower with yields up 2.05 basis points to 2.9803%
  • The US Treasury 2s-10s Spread has widened 2.04 basis points to 0.31%
  • WTI Crude is currently down -1.95% to USD$68.76/bbl with the Brent-WTI spread up USD$1.13 to USD$3.70/bbl
  • Gold is currently little changed -0.08% to USD$1223.21/oz

International Stocks

  • European stocks are selling off this morning amidst escalating tensions between US and China over trade
  • The Euro Stoxx 600 is currently down -0.37%, the FTSE 100 is down -1.28%, the DAX is down -0.29%, and the CAC 40 is down -0.05%
  • Basic Resources (-1.86%), Utilities (-1.61%), and Automobiles & Parts (-0.95%) stocks are the worst performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.57x
  • The VSTOXX is up to 12.78 after closing at 12.55 yesterday
  • German 10-Year Bunds are lower with yields up 3 basis points to 0.473%
  • UK 10-Year GILTs are lower with yields up 4.1 basis points to 1.371%
  • Asian stocks closed their trading sessions mixed following rumors that the US government is planning to increase tariffs from 10% to 25% on USD$200bn in imports from China
  • The Nikkei 225 finished up +0.86%, the Hang Seng ended down -0.85%, the Hang Seng China Enterprise declined -0.47%, and the CSI 300 was -2%
  • Iron And Steel (+4.69%), Nonferrous Metals (+3.38%), and Other Products (+3.15%) stocks were the top performers among Japanese stocks today
  • Japan 10-Year Government Bonds are lower with yields up 6.9 basis points to 0.131%
  • JGBs 2s-10s Spread has widened 5.6 basis points to 0.22%
  • JPY¥ is currently little changed against the USD$ at 111.87

Cryptos

  • Northern Trust, an asset manager with USD$954bn in AUM announces plans to start a custody service for digital assets. 
  • Binance announces its acquisition of Trust Wallet, an opensource and decentralized wallet that supports Ethereum (ETH) and 20,000+ Ethereum-based tokens (ERC20, ERC223, and ERC721).  Binance paid for Trust Wallet with a combination of fiat cash, Binance stocks and the Binance token.  The long-term strategy is for Binance to integrate Trust Wallet as the default wallet on its decentralized exchange.
  • Indian cryptocurrency traders are finding ways to circumvent the India government’s decision to ban cryptocurrency trading.  Traders are now making use of a Dabba trading which refers to making OTC trades that are off the books.  Dabba traders execute trades through platforms at international banks in Dubbai, Europe and the UK.
  • The Dubai International Financial Center (DIFC) Courts, in a partnership with Smart Dubai Initiative, announces plans to “create the world’s first Court of the Blockchain”.  The shift to a “blockchain-powered future” will bring “greater efficiencies across the entire legal ecosystem,” the authority said instatementThe two government agencies are hoping to develop a network built on blockchain technology and smart contracts to explore verification of court judgments and sharing of documents in real-time for efficient cross-border law enforcement

*Data in Price Return, Source: Stockdio

S&P 500 Sector Performance

*Data in Total Return as of Previous Day’s EOD, Source: Capital IQ.

Russell 1000 Factor Performance

Top Buy Laggards From Yesterday We Are Watching Today

Click name for Q-Factor rating and financial data.

B&G Foods, Inc. - 21.01% off its 52wkH on 12/04/2017, reports earnings on 08/02/2018

Broadcom Inc. - 22.37% off its 52wkH on 11/27/2017, reports earnings on 09/06/2018

Micron Technology, Inc. - 18.36% 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 10/30/2018

Rudolph Technologies, Inc. - 17.22% off its 52wkH on 05/30/2018, reports earnings on 08/02/2018

SpartanNash Company - 14.31% off its 52wkH on 08/01/2017, reports earnings on 08/15/2018

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

Apple (AAPL) shares are higher pre-market on the strength of their results and new guidance.  Apple expects their next quarter, fiscal 4Q, to see revenue come in at US$60-62bm, well above the $US$59.4bn the market was expecting.  Iphones sales remained strong-still over 60% over revenue-even as new updates are due in the near future.

ArcelorMittal (MT NA)  saw a strong quarter and increased steel demand expectations now expecting global consumption growth to be 3% up from 2.5%.  2Q ebitda came in at US$3.07bn up from US$2.11bn a year earlier.

Baidu (BIDU) 2Q came above expectations, the company saw sales of 26bn yuan (25.6bn expected) with net income of 6.4bn well ahead of the 4.82bn expected.  Guidance came in line with management advising not to expect any meaningful revenue from AI or driverless cars divisions.

Bunge (BG) said it Is in “late-stage” talks to sell its sugar trading division after announcing 6 months ago it would divest the unit.  2Q results came below on challenges in the soy bean division.

Direct Line Insurance (LSE.DLG) shares are down 3.25% to £4.36, after the company reported weaker than expected earnings in 1H2018 due to a large number of weather related claims. Operating profit in 1H2018 fell 15.7% from £359.7 million in CY2017 to £303.1 million in CY2018

Facebook (FB) has begun to remove accounts from it's platform which reportedly have ties to the Russian Kremlin. So far, Facebook has identified and removed 32 pages and fake account that have been linked back to Russia

Huawei moved to the #2 spot in handset deliveries ahead of Apple (AAPL), globally shipping 54.2mn units in the 2Q, +41% y/y.  Huawei now accounts for 16% of the global market.

Man Group (EMG LN) saw 1H18 performance fees drop to US$85mn from US$106mn a year earlier while net inflows over the same period were strong.  Mas saw net inflows of UD$8.3bn in the half taking total AUM to US$113.7bn.

Rio Tinto (RIO LN) delivered underlying profit of US$4.4bn in 1H18 (+12% y/y) and returned a total package of US$7.2bn to investors over the same period (was US$3bn a year earlier).  Rio hiked its dividend 15% and increased the buyback program by US$1bn for the remainder of the fiscal year.

Sony (6758 JP) raised guidance on strong sales ofPS4 consoles and profits from its stake in Spotify (SPOT).  Sony increased full year sales guidance to 500bn yen (was 480bn) on expected sales of 8.6tn yen (was 8.3tn).  For the quarter operating profit came at 195bn yen well above the 145.4bn expected.

Tesla (TSLA) plans to invest US$5bn in a production facility in China according to press reports.  The plan includes the potential of raising funds in China for the project as per the same media reports.

Volkswagen (VOW3 GY) CEO said it will be near to impossible for them to meet their profit goals this years given multiple headwinds they face.  Production grew 13.5% in the 2Q ahead of the new emission testing regs which are due to be implemented soon though the company said they may see inventory build up in the coming quarter.

Cryptocurrencies Today

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
Allison Transmission Holdings, Inc. ALSN Industrials Construction Machinery and Heavy Trucks 12.39% 11.67% 9.12%
Harris Corporation HRS Industrials Aerospace and Defense 9.68% 7.63% 16.45%
WellCare Health Plans, Inc. WCG Healthcare Managed Healthcare 7.30% 3.51% 32.97%
IDEX Corporation IEX Industrials Industrial Machinery 3.79% 2.13% 16.37%
IDEXX Laboratories, Inc. IDXX Healthcare Healthcare Equipment 3.02% -1.23% 56.62%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Broadcom Inc. AVGO Information Technology Semiconductors -1.52% -0.63% -8.60%
Zions Bancorporation ZION Financials Regional Banks -1.30% 0.02% -1.88%
CME Group Inc. CME Financials Financial Exchanges and Data -1.30% -4.41% -2.93%
BB&T Corporation BBT Financials Regional Banks -1.11% -0.45% 0.67%
MSCI Inc. MSCI Financials Financial Exchanges and Data -0.78% -4.36% 0.46%

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 -33.33% -33.33% -91.67%
AK Steel Holding Corporation AKS Materials Steel -12.85% -10.18% 6.30%
Avalara, Inc. AVLR Information Technology Application Software -5.10% -15.38% -28.16%
Groupon, Inc. GRPN Consumer Discretionary Internet and Direct Marketing Retail -2.70% -10.86% 8.84%
Helmerich & Payne, Inc. HP Energy Oil and Gas Drilling -2.60% 2.61% -3.78%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Range Resources Corporation RRC Energy Oil and Gas Exploration and Production 5.90% -2.89% -9.55%
Immunomedics, Inc. IMMU Healthcare Biotechnology 5.60% 0.59% 48.08%
Spark Therapeutics, Inc. ONCE Healthcare Biotechnology 4.84% 1.56% 49.20%
Heron Therapeutics, Inc. HRTX Healthcare Biotechnology 4.76% 0.13% 106.91%
Esperion Therapeutics, Inc. ESPR Healthcare Biotechnology 4.61% 4.93% -31.74%

Source: S&P Capital IQ

Events Calendar

On Mobile/Tablet scroll to the right

Company Name Ticker Event Date Event Type Q-Factor Score
Caesars Entertainment Corporation CZR 8/1/2018 Earnings Release Date US Large-Cap: F, US Consumer Discretionary: C
Gaming and Leisure Properties, Inc. GLPI 8/1/2018 Earnings Release Date US Large-Cap: C
Molson Coors Brewing Company TAP 8/1/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: D
Sprint Corporation S 8/1/2018 Earnings Release Date US Large-Cap: C
Meritor, Inc. MTOR 8/1/2018 Earnings Release Date US Large-Cap: C, US Industrials: B
Bunge Limited BG 8/1/2018 Earnings Release Date US Large-Cap: F, US Consumer Staples: D
Gartner, Inc. IT 8/1/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
Scientific Games Corporation SGMS 8/1/2018 Earnings Release Date US Large-Cap: F, US Consumer Discretionary: C
Hanesbrands Inc. HBI 8/1/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: D
Automatic Data Processing, Inc. ADP 8/1/2018 Earnings Release Date US Large-Cap: A, US Information Technology: B
IDEXX Laboratories, Inc. IDXX 8/1/2018 Earnings Release Date US Large-Cap: B
Belden Inc. BDC 8/1/2018 Earnings Release Date US Large-Cap: A, US Information Technology: A
Taylor Morrison Home Corporation TMHC 8/1/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Blueprint Medicines Corporation BPMC 8/1/2018 Earnings Release Date US Large-Cap: F
The Medicines Company MDCO 8/1/2018 Earnings Release Date US Large-Cap: F
United Therapeutics Corporation UTHR 8/1/2018 Earnings Release Date US Large-Cap: C
Energizer Holdings, Inc. ENR 8/1/2018 Earnings Release Date US Large-Cap: D, US Consumer Staples: C
NiSource Inc. NI 8/1/2018 Earnings Release Date US Large-Cap: C
Humana Inc. HUM 8/1/2018 Earnings Release Date US Large-Cap: C
Ares Capital Corporation ARCC 8/1/2018 Earnings Release Date US Large-Cap: C
Hudson Pacific Properties, Inc. HPP 8/1/2018 Earnings Release Date US Large-Cap: D
Domtar Corporation UFS 8/1/2018 Earnings Release Date US Large-Cap: B
Summit Materials, Inc. SUM 8/1/2018 Earnings Release Date US Large-Cap: C
Chesapeake Energy Corporation CHK 8/1/2018 Earnings Release Date US Large-Cap: D
Enterprise Products Partners L.P. EPD 8/1/2018 Earnings Release Date US Large-Cap: C
Littelfuse, Inc. LFUS 8/1/2018 Earnings Release Date US Large-Cap: C, US Information Technology: B
Entergy Corporation ETR 8/1/2018 Earnings Release Date US Large-Cap: D
Spirit AeroSystems Holdings, Inc. SPR 8/1/2018 Earnings Release Date US Large-Cap: D, US Industrials: C
AutoNation, Inc. AN 8/1/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Rowan Companies plc RDC 8/1/2018 Earnings Release Date US Large-Cap: D
Cirrus Logic, Inc. CRUS 8/1/2018 Earnings Release Date US Large-Cap: C, US Information Technology: B
Qorvo, Inc. QRVO 8/1/2018 Earnings Release Date US Large-Cap: D, US Information Technology: C
Zynga Inc. ZNGA 8/1/2018 Earnings Release Date US Large-Cap: D, US Information Technology: C
T-Mobile US, Inc. TMUS 8/1/2018 Earnings Release Date US Large-Cap: B
Stamps.com Inc. STMP 8/1/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
Globus Medical, Inc. GMED 43313.688 Earnings Release Date US Large-Cap: C
Fortinet, Inc. FTNT 43313.688 Earnings Release Date US Large-Cap: C, US Information Technology: C
Yum China Holdings, Inc. YUMC 43313.688 Earnings Release Date China All-Cap: C
DexCom, Inc. DXCM 43313.688 Earnings Release Date US Large-Cap: C
Wynn Resorts, Limited WYNN 43313.688 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: A
Masimo Corporation MASI 43313.688 Earnings Release Date US Large-Cap: C
HubSpot, Inc. HUBS 43313.688 Earnings Release Date US Large-Cap: D, US Information Technology: C
Clovis Oncology, Inc. CLVS 43313.688 Earnings Release Date US Large-Cap: D
Antero Resources Corporation AR 43313.708 Earnings Release Date US Large-Cap: F
SM Energy Company SM 8/1/2018 Earnings Release Date US Large-Cap: F
Matador Resources Company MTDR 8/1/2018 Earnings Release Date US Large-Cap: C
Annaly Capital Management, Inc. NLY 8/1/2018 Earnings Release Date US Large-Cap: C
Churchill Downs Incorporated CHDN 8/1/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
Valvoline Inc. VVV 8/1/2018 Earnings Release Date US Large-Cap: D
Vectren Corporation VVC 8/1/2018 Earnings Release Date US Large-Cap: C
PRA Health Sciences, Inc. PRAH 43313.708 Earnings Release Date US Large-Cap: B
Century Aluminum Company CENX 8/1/2018 Earnings Release Date US Large-Cap: D
Exact Sciences Corporation EXAS 8/1/2018 Earnings Release Date US Large-Cap: F
United States Steel Corporation X 8/1/2018 Earnings Release Date US Large-Cap: F
Realty Income Corporation O 8/1/2018 Earnings Release Date US Large-Cap: C
FMC Corporation FMC 8/1/2018 Earnings Release Date US Large-Cap: B
Mid-America Apartment Communities, Inc. MAA 8/1/2018 Earnings Release Date US Large-Cap: C
MetLife, Inc. MET 8/1/2018 Earnings Release Date US Large-Cap: C
Lincoln National Corporation LNC 8/1/2018 Earnings Release Date US Large-Cap: B
Marathon Oil Corporation MRO 8/1/2018 Earnings Release Date US Large-Cap: D
Federal Realty Investment Trust FRT 8/1/2018 Earnings Release Date US Large-Cap: D
Prudential Financial, Inc. PRU 8/1/2018 Earnings Release Date US Large-Cap: B
FireEye, Inc. FEYE 8/1/2018 Earnings Release Date US Large-Cap: F, US Information Technology: F
Herbalife Nutrition Ltd. HLF 8/1/2018 Earnings Release Date US Large-Cap: D, US Consumer Staples: D