Morning Quant Ride Feb 13, 2018

Feb 13, 2018

Traders’ Corner

Asian markets closed their trading sessions mixed while European equity markets are down this morning.  The Nikkei closed down 0.65% with energy, utilities and industrials driving down the benchmark Japanese index; consumer and telecom were the outperforming sectors in Japanese equities last night.  The CSI 300 and Hang Seng China Enterprise indices both closed up 1.17% and 0.88% respectively.  Tech and Consumer stocks led the rally in mainland China equity markets which was a follow-through from the rally in US equities last night.

European equities are in the red with the total volume of shares traded trending below recent levels: European composite volume is 14.22% below its 10-day average.  Consumer and telecom are the worst-performing sectors in European equity markets while Energy and Financials are the relative outperformers this morning (though both sectors are down in absolute terms).

Dollar weakness persists this morning with the USD$ down against major G7 currencies.  Most notably, the USD$ is down 1.00% against the JPY this morning which may be a signal that investors are beginning to increase risk aversion.   Oil continues its two-week correction with WTI and Brent front-month futures both down.  However, USD$60/barrel appears to be a support level for both benchmarks.  Unless global growth expectations are revised negatively, expect to see both WTI and Brent hover around this price level.  Precious metals appear to be reflect the same sentiment exhibited by G7 currencies with spot Gold up 41 bps while the PGMs are up north of 50 bps.  As a side note, JPY spot and Gold spot have a positive correlation of 0.66 ; Gold spot has a beta of 0.80 against JPY spot.  Expect to see precious metals move with the JPY over the next few trading days.

US equity futures are pointing to a negative open in NY this morning following yesterday’s positive move.  The VIX is at 26.66 as the index continues to flush out the aftershocks from the volatility ETP crash last week.  US equities rallied yesterday with the S&P 500 closing the day up 1.9% and the Russell 2000 up 0.9%.  Large-cap stocks outperformed SMID-caps with large-cap tech one of the best performers in the S&P 500: the Nasdaq closed up 1.6% in comparison to S&P 500 Tech which finished up 1.8%. All sectors were higher in the S&P500 with Materials, Tech, and Energy leading the way higher, while Real Estate, Utilities, and Telecom lagged. We are focusing on a few of our A-Rated Traditional Retailers, as they were one of the few sub-sectors that were negative yesterday:

QuantShot: Costco - 9.42% off its 52wkH, reports earnings on 03/08/2018

Kohl's - 11.60% off its 52wkH, reports earnings on 03/01/2018

Target - 8.67% off its 52wkH, reports earnings on 03/06/2018

TJX Companies - 7.06% off its 52wkH, reports earnings on 02/28/2018

We are also watching a few of our A-Rated Consumer Discretionary, Financials, and Health Care stocks that lagged yesterday:

Cigna - 14.78% off its 52wkH, reports earnings on 05/03/2018

International Exchange, Inc - 9.90% off its 52wkH, reports earnings on 05/03/2018

QuantShot: Wynn Resorts - 19.99% off its 52wkH, reports earnings on 05/03/2018

QOption: Yum! Brands - 10.19% off its 52wkH, reports earnings on 04/24/2018

Our Top Picks in the News

Click headline for story

Walgreens Boots Alliance (WBA)

Walgreens Boots Alliance in talks to buy AmerisourceBergen (Financial Times)

Top Conviction Buy in February, please see Quantamize Global Top Picks US Large Cap report

See more on our Walgreens QuantShot company report from February 9th      

Cisco Systems (CSCO)

Cisco price target raised to $46 from $40 at Citi (TheFly)

Top Conviction Buy in February, please see Quantamize Global Top Picks US Info Tech report

See more on our Cisco QuantShot company report from February 6th      

First Data Corp. (FDC)

First Data meets 4Q profit forecasts (Yahoo Finance)
Top Conviction Buy in February, please see Quantamize Global Top Picks US Info Tech report

NetApp (NTAP)

NetApp upgraded to Buy on All-Flash strength at BofA/Merrill (TheFly)

Top Conviction Buy in February, please see Quantamize Global Top Picks US Info Tech report

See more on our NetApp QuantShot company report from February 5th      

Facebook Inc (FB)

Facebook, Inc. Stock Will Survive Losing Younger Users (InvestorPlace)

Top Conviction Buy in February, please see Quantamize Global Top Picks US Info Tech report

See more on our Facebook QuantShot company report from January 10th      

YY Inc (YY)

YY (NASDAQ:YY) Upgraded by Instinet to Buy (StockNewsTimes)

Top Conviction Buy in February, please see Quantamize Global Top Picks Investable China report

See more on our YY QuantShot company report from November 9th   

Home Depot (HD)

Top Conviction Buy in February, please see Quantamize Global Top Picks US Consumer Discretionary report

See more on our Home Depot QuantShot company report from January 11th      

Dunkin’ Brands (DNKN)

Dunkin' Brands Is Tempting Here (Seeking Alpha)

Top Conviction Buy in February, please see Quantamize Global Top Picks US Consumer Discretionary report

See more on our Dunkin’ Brands QuantShot company report from February 12th   

Wynn Resorts, Ltd (WYNN)

Wynn's Exit Removes the Premium but Also the Uncertainty - A Recovery To $200 Or More In The Cards (Seeking Alpha)

Top Conviction Buy in February, please see Quantamize Global Top Picks US Consumer Discretionary report

See more on our Wynn QuantShot company report from February 12th  

Tesla (TSLA)

Tesla clarifies Musk’s Model 3 promise amid worst week for the stock since July (MarketWatch)

Top Conviction Short in February, please see Quantamize Global Top Picks US Large Cap report

See more on our Tesla QuantShot company report from February 6th     

Global Indices

Index

Levels

1 Day Return

5 Day Return

MTD

YTD

S&P 500

2656.00

0.00%

-1.45%

-5.94%

-0.66%

Russell 2000

1490.98

0.00%

-1.07%

-5.33%

-2.90%

DJ Industrial Average

24601.27

0.00%

-1.25%

-5.92%

-0.48%

NASDAQ Composite Index

6981.96

0.00%

-1.88%

-5.80%

1.14%

CBOE Market Volatility Index

26.77

-

-

-

-

Germany DAX (TR)

12235.25

-0.39%

-0.89%

-7.25%

-4.91%

France CAC 40

5124.78

-0.30%

-0.42%

-6.54%

-3.25%

Japan Nikkei 225

21244.68

-0.65%

-1.05%

-8.02%

-6.07%

Hang Seng Index

29839.53

1.29%

-3.71%

-9.27%

-1.54%

Hang Seng China Enterprises

12004.51

0.88%

-6.20%

-11.48%

1.63%

S&P ASX 200

5855.90

0.60%

-0.22%

-3.01%

-4.03%

Source: FactSet          

Large Cap Conviction Buy Movers

Large Cap A Winners Ticker Sector Industry 1 Day Return 5 Day Return YTD
CDK GLOBAL INC CDK Information Technology Software

6.23%

-2.04%

-6.48%

CHILDRENS PLACE INC PLCE Consumer Discretionary Specialty Retail

4.49%

1.16%

-1.24%

LOUISIANA-PACIFIC CORP LPX Materials Paper & Forest Products

3.61%

-1.05%

4.53%

ROPER TECHNOLOGIES INC ROP Industrials Industrial Conglomerates

3.28%

-1.96%

0.98%

ALLIANCE DATA SYSTEMS CORP ADS Information Technology IT Services

3.17%

0.79%

-5.05%

Large Cap A Losers Ticker Sector Industry 1 Day Return 5 Day Return YTD
ENTERCOM COMMUNICATIONS CORP ETM Consumer Discretionary Media

-2.49%

1.01%

-6.94%

BIG LOTS INC BIG Consumer Discretionary Multiline Retail

-1.54%

2.62%

1.89%

SNYDERS-LANCE INC LNCE Consumer Staples Food Products

-0.12%

0.32%

-0.14%

CIGNA CORP CI Health Care Health Care Providers & Services

-0.10%

-1.22%

-4.17%

REINSURANCE GROUP AMER INC RGA Financials Insurance

-0.10%

-2.74%

-4.72%

Source: FactSet            

Large Cap Conviction Short Movers

Large Cap F Winners Ticker Sector Industry 1 Day Return 5 Day Return YTD
GOPRO INC GPRO Consumer Discretionary Household Durables

-3.66%

-1.09%

-27.87%

PACIRA PHARMACEUTICALS INC PCRX Health Care Pharmaceuticals

-2.81%

0.54%

-18.07%

EDITAS MEDICINE INC EDIT Health Care Biotechnology

-2.49%

-0.85%

9.63%

ESPERION THERAPEUTICS INC ESPR Health Care Biotechnology

-1.79%

5.34%

5.50%

ULTIMATE SOFTWARE GROUP INC ULTI Information Technology Software

-1.70%

7.09%

4.88%

Large Cap F Losers Ticker Sector Industry 1 Day Return 5 Day Return YTD
LONGFIN CORP -REDH LFIN Financials Capital Markets

13.79%

6.05%

-39.61%

RIOT BLOCKCHAIN INC RIOT Health Care Biotechnology

9.28%

50.00%

-43.49%

UNITI GROUP INC UNIT Real Estate Equity Real Estate Investment Trusts (REITs)

6.23%

-2.70%

-18.83%

HUBSPOT INC HUBS Information Technology Software

6.21%

-1.73%

3.00%

SAREPTA THERAPEUTICS INC SRPT Health Care Biotechnology

6.20%

-9.01%

-0.90%

Source: FactSet            

Upcoming Earnings

Company Name Ticker Earnings Date
Louisiana-Pacific Corporation LPX 02/13/2018
Service Corporation International SCI 02/14/2018
Snyder's-Lance, Inc. LNCE 02/14/2018
DaVita Inc. DVA 02/14/2018
Zoetis, Inc. Class A ZTS 02/15/2018
Cisco Systems, Inc. CSCO 02/15/2018
Pilgrim's Pride Corporation PPC 02/15/2018
NetApp, Inc. NTAP 02/15/2018
Marriott International, Inc. Class A MAR 02/15/2018
V.F. Corporation VFC 02/16/2018
SS&C Technologies Holdings, Inc. SSNC 02/16/2018
Ligand Pharmaceuticals Incorporated LGND 02/21/2018
HP Inc. HPQ 02/21/2018
Zebra Technologies Corporation Class A ZBRA 02/22/2018
Toro Company TTC 02/22/2018
Pinnacle Foods, Inc. PF 02/22/2018
PRA Health Sciences, Inc. PRAH 02/22/2018
Leucadia National Corporation LUK 02/26/2018
NuVasive, Inc. NUVA 02/27/2018
Scripps Networks Interactive, Inc. Class A SNI 02/27/2018
United Therapeutics Corporation UTHR 02/27/2018
Priceline Group Inc PCLN 02/28/2018
Carter's, Inc. CRI 02/28/2018
TJX Companies Inc TJX 02/28/2018

Line for QuantShots

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