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Morning Brief

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Morning Quant Ride

Jul 13, 2018

US Stocks                                                                                                                                                                                                        Start Your Free Trial Today

  • US stocks index futures are pointing to a flat open in NY: Dow Jones minis +0.04%, S&P500 minis -0.01% and Nasdaq 100 minis +0.01%
  • The VIX is currently at 12.62 after closing at 12.58 yesterday
  • XOP August 17 & October 2018 OTMS Puts, Bank of America (BAC) July 20 OTM Calls and XLF July 20 OTM Calls are the most heavily traded options contracts in the US pre-market
  • The yield on the US 10-year government bond is little changed at 2.844%
  • Global sovereign bonds are rallying this morning with 10-year yields on Eurozone country government debt down 2 to 3 basis points this AM
  • The USD$ Index (DXY) is +0.35% with a weakening EUR€ (-0.36% to 1.1630), GBP£ (-0.48% to 1.3142) and AUD$ (-0.40% to 0.7378) driving the rally in the greenback
  • Global oil prices are little changed this AM with WTI -0.06% to USD$70.28/bbl and Brent -0.15% to USD$74.33/bbl

International Stocks

  • European stocks are off their intra-session highs on light volume with the Euro Stoxx 600 +0.21%, FTSE 100 +0.38%, DAX +0.23%, and CAC 40 +0.40%
  • US President Trump’s comments that Prime Minister Theresa May’s Brexit plan is likely to kill off any trade deal with the US shocked European investors with the GBP£ currently down 0.48% to 1.3142 (off intra-day lows) and yields on 10-year UK GILTs -2.4 basis points to 1.256%
  • VSTOXX, the European stocks equivalent of the VIX, is at 13.0308 after closing at 13.4596 yesterday
  • Asian stocks finished their trading sessions positive and closed the week positive for the first time in 5 weeks with the Nikkei 225 +1.85%,  CSI 300 +0.33%, HSI +0.16% and Hang Seng China Enterprise -0.06%
  • Consensus among investors is that the US and China will not enter into a broad trade war similar to what occurred in the 1930s
  • CNY is weakening for the second day in a row, down 0.44% against the USD$ and is currently at 6.6973.  As a point of reference, the USD$-CNY started CY2018 ~6.4930.

Cryptos

  • Trading platform Robinhood is looking to win the cryptocurrency exchange war by killing trading fees. There are currently no exchange fees to trade cryptocurrencies on Robinhood’s platform which is consistent with its business model for stocks and options trading. The firm’s goal is to get users onto its platform via crypto and make money collecting interest on their cash and securities held in their accounts or their Gold membership offering.
  • OKCoin cryptocurrency exchange has launched a US offering in fiat-to-crypto trading. The exchange is now accepting USD$ deposits and withdrawals and pair trading with BTC, BCH, LTC, ETC, and ETC. The firm registered with the US FinCEN as a money service business. Currently, the USD-crypto trading is limited to California residents. OKCoin was one of the largest exchanges in China before the country’s crypto trading ban.
  • Hedge fund manager, Steve Cohen, has recently invested in the crypto asset hedge fund Autonomous Partners. Cohen invested in the fund using his vehicle called Cohen Private Ventures. The fund has also raised money from Union Square Ventures and Coinbase CEO Brian Armstrong. Currently there are over 250 crypto-only hedge funds and it is estimated that USD$5bn has been raised.
  • Quantamize’s AI Machine Learning 3-Day Crypto Trading Signals were updated Wednesday morning. 6 cryptocurrencies are currently rated as buy. The next update will be tomorrow, 7/14/2018. Quantamize’s CryptoFolios were updated this past Monday and will be updated next Monday

*Data in Price Return, Source: Stockdio

S&P 500 Sector Performance

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

Conviction Buy Laggards From Yesterday We Are Watching Today

Click name for Q-Factor rating and financial data.

Broadcom Inc. - 22.75% off its 52wkH on 01/00/1900, reports earnings on 09/06/2018

Ichor Holdings, Ltd. - 40.72% off its 52wkH on 10/20/2017, reports earnings on 08/07/2018

Malibu Boats, Inc. - 9.01% off its 52wkH on 06/15/2018, reports earnings on 09/07/2018

MCBC Holdings, Inc. - 9.18% off its 52wkH on 05/18/2018, reports earnings on 09/07/2018

The Hackett Group, Inc. - 14.35% off its 52wkH on 02/21/2018, reports earnings on 08/07/2018

The TJX Companies, Inc. - 2.65% off its 52wkH on 06/20/2018, reports earnings on 08/21/2018

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

  • Apple Inc (AAPL) will be investing $300 million into a renewable energy fund, which will seek to provide significant renewable energy resources to China in four years
  • AT&T’s (T) $85 billion merger deal with Time Warner Inc. (TWX) will be appealed by the US Department of Justice. In June, a federal judge’s ruling allowed the deal to proceed, despite the Justice Departments protest
  • Johnson & Johnson (JNJ) has been ordered by a Missouri jury to pay $4.7 billion in damages to 22 claimants, who blame asbestos in the company’s talc-based products as the cause of their ovarian cancer 
  • JPMorgan Chase (JPM) reported 2Q2018 EPS that was higher than the consensus ($2.29 vs $2.22 projected). Shares of JPMorgan are trading 0.42% higher to $107.30 pre-market following the earnings beat
  • Kellogg’s (K) Honey Smacks cereal is being recalled from retail stores by the FDA, which has warned consumers not to purchase Honey Smack cereal, over concerns about potential Salmonella contamination. Kellogg’s stock is down 1.68% to $69.49 before the open
  • McDonalds (MCD) is down 1.06% pre-market to $157.44 after the Iowa and Illinois health departments announced that they are investing more than 100 cases of cycolspora infections, which have been traced back to salads sold at McDonalds
  • PNC Financial Services’ (PNC) stocks is up 1.43% to $139.97 before the open, after the company posted 2Q2018 EPS that was above expectations ($2.72 vs $2.57 forecasted) 
  • Walmart (WMT) has denied recent rumors that the company is considering selling its Japanese supermarket chain Seiyu, which operates more than 300 stores across Japan
  • UK information services firm Experian Plc (LSE:EXPN) announced that revenue grew 9% Y/Y in F1Q2018, led by strong organic revenue growth in North America (+11% Y/Y). Growth in North America was driven by the company’s acquisition of Clarity Services. Shares of Experian are trading 0.03% higher to £19.20

Cryptocurrencies Today

*Source: Stockdio

Stock Movers

Conviction Buy Winners and Losers

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Winners  Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Texas Instruments Incorporated TXN Information Technology Semiconductors 3.65% 2.78% 10.92%
Total System Services, Inc. TSS Information Technology Data Processing and Outsourced Services 3.39% 5.81% 15.29%
Adobe Systems Incorporated ADBE Information Technology Application Software 2.72% 2.69% 45.44%
Fortinet, Inc. FTNT Information Technology Systems Software 2.39% 3.48% 53.88%
Micron Technology, Inc. MU Information Technology Semiconductors 2.34% 4.17% 34.85%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
The TJX Companies, Inc. TJX Consumer Discretionary Apparel Retail -1.16% -1.36% -0.98%
Zions Bancorporation ZION Financials Regional Banks -1.09% -0.06% -0.27%
Dunkin' Brands Group, Inc. DNKN Consumer Discretionary Restaurants -0.97% 0.61% 2.22%
The Progressive Corporation PGR Financials Property and Casualty Insurance -0.87% -0.81% -0.75%
Kansas City Southern KSU Industrials Railroads -0.64% -0.84% -0.33%

Source: S&P Capital IQ

Conviction Short Winners and Losers

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Winners Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Airborne Wireless Network ABWN Telecommunication Services Alternative Carriers -25.00% -53.85% -75.00%
L Brands, Inc. LB Consumer Discretionary Apparel Retail -11.37% -11.21% -11.61%
Tricida, Inc. TCDA Healthcare Pharmaceuticals -5.69% 1.61% 3.65%
Helmerich & Payne, Inc. HP Energy Oil and Gas Drilling -2.33% -2.03% 0.58%
Southwestern Energy Company SWN Energy Oil and Gas Exploration and Production -2.19% -2.37% 0.94%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Applied Optoelectronics, Inc. AAOI Information Technology Communications Equipment 6.64% 6.04% 29.03%
Geron Corporation GERN Healthcare Biotechnology 6.13% 1.60% 111.67%
Ceridian HCM Holding Inc. CDAY Information Technology Application Software 5.83% 1.86% 0.00%
Agios Pharmaceuticals, Inc. AGIO Healthcare Biotechnology 5.81% 6.52% 58.26%
ACADIA Pharmaceuticals Inc. ACAD Healthcare Biotechnology 5.59% -0.45% -41.02%

Source: S&P Capital IQ

Events Calendar

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Company Name Ticker Event Date Event Type Q-Factor Score
JPMorgan Chase & Co. JPM 7/13/2018 Earnings Release Date US Large-Cap: B
The PNC Financial Services Group, Inc. PNC 7/13/2018 Earnings Release Date US Large-Cap: C
Citigroup Inc. C 7/13/2018 Earnings Release Date US Large-Cap: B
Wells Fargo & Company WFC 7/13/2018 Earnings Release Date US Large-Cap: D
First Republic Bank FRC 7/13/2018 Earnings Release Date US Large-Cap: C
PacWest Bancorp PACW 7/15/2018 Estimated Earnings Release Date US Large-Cap: B
The Charles Schwab Corporation SCHW 7/15/2018 Estimated Earnings Release Date US Large-Cap: C
Bank of America Corporation BAC 7/16/2018 Earnings Release Date US Large-Cap: C
BlackRock, Inc. BLK 7/16/2018 Earnings Release Date US Large-Cap: A
Netflix, Inc. NFLX 7/16/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
The Progressive Corporation PGR 7/16/2018 Estimated Earnings Release Date US Large-Cap: A
J.B. Hunt Transport Services, Inc. JBHT 7/16/2018 Estimated Earnings Release Date US Large-Cap: B, US Industrials: A
Johnson & Johnson JNJ 7/16/2018 Estimated Earnings Release Date US Large-Cap: C
Altaba Inc. AABA 7/16/2018 Estimated Earnings Release Date US Large-Cap: A, US Information Technology: B
Prologis, Inc. PLD 7/16/2018 Earnings Release Date US Large-Cap: C
Comerica Incorporated CMA 7/17/2018 Earnings Release Date US Large-Cap: A
Omnicom Group Inc. OMC 7/17/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: B
UnitedHealth Group Incorporated UNH 7/17/2018 Earnings Release Date US Large-Cap: A
First Horizon National Corporation FHN 7/17/2018 Earnings Release Date US Large-Cap: C
The Goldman Sachs Group, Inc. GS 7/17/2018 Earnings Release Date US Large-Cap: C
Interactive Brokers Group, Inc. IBKR 7/17/2018 Earnings Release Date US Large-Cap: C
CSX Corporation CSX 7/17/2018 Earnings Release Date US Large-Cap: B, US Industrials: C
Hancock Whitney Corporation HBHC 7/17/2018 Earnings Release Date US Large-Cap: A
Fidelity National Financial, Inc. FNF 7/17/2018 Earnings Release Date US Large-Cap: C
Pinnacle Financial Partners, Inc. PNFP 7/17/2018 Earnings Release Date US Large-Cap: C
Mellanox Technologies, Ltd. MLNX 7/17/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
Wintrust Financial Corporation WTFC 7/17/2018 Earnings Release Date US Large-Cap: B
United Continental Holdings, Inc. UAL 7/17/2018 Estimated Earnings Release Date US Large-Cap: D, US Industrials: C
eBay Inc. EBAY 7/17/2018 Estimated Earnings Release Date US Large-Cap: C, US Information Technology: B
Kinder Morgan, Inc. KMI 7/17/2018 Estimated Earnings Release Date US Large-Cap: B
Umpqua Holdings Corporation UMPQ 7/17/2018 Earnings Release Date US Large-Cap: C
SL Green Realty Corp. SLG 7/17/2018 Earnings Release Date US Large-Cap: C