Morning Quant Ride Feb 16, 2018

Feb 16, 2018

Traders’ Corner

Asian markets were quiet with most major exchanges closed for the Lunar New Year.  The Nikkei 225 closed up 1.19% with utilities, tech and consumer stocks pacing the Japanese equities large-cap index.  Financials, energy and telecom stocks were the largest underperformers though all three sectors finished the Tokyo trading session up.  Aussie equities were mixed with the ASX 200 finishing down 8 bps.  Healthcare and mining stocks were top performing sectors yesterday and have been the best performing sectors all week.  RBA Governor Philip Lowe, this morning, suggested that rising interest rates in Australia will be a gradual process with unemployment trends being a major factor (in addition to rising inflation).  Total volume traded on Asian and Australian exchanges is trending downwards with volumes well below 10-day and 100-day averages.  This may be an anomaly related to the Lunar New Year though it is a data point we will follow very closely.

 

European equities are up across the board this morning with the Euro Stoxx 600 up 0.82%.  Regional indices are up as well with the FTSE100 up 0.65%, DAX up 0.60% and CAC 40 up 0.94%.  Consumer staples, energy and healthcare stocks are driving the Euro Stoxx 600’s move this morning.  The move in European equities is in spite of Bridgewater’s disclosure that they initiated a USD$22bn short against large-cap European equities.  While Ray Dalio of Bridgewater suggested there is upward pressure on rates, fixed 2-year swap rates have ignored this commentary and are hovering around -0.12%.

The sell-off in US government bonds appears to be taking a breather with 10-yr bond yields back below 2.90%.  2-year swap rates haven’t moved much this morning, still holding above 2.46%.  The US Dollar index is up 23 bps this following four down days in a row this week.  THE USD$ is up this morning against G7 currencies with JPY/USD pair above 106 while the USD/EUR hovering around 1.2479.  US dollar strength is supporting commodity markets this morning with both WTI and Crude spot prices up.  As mentioned in our trader’s corner earlier this week, we expect USD$60/barrel to be a support level for WTI.  Precious metals continue their upward move with both Gold and PGMs spot prices up for the 6th day in a row.  Earlier this week, we released two commodities options trade:

XOP Bull Call Spread

GDX Bull Call Spread

US equity futures are pointing to a positive open in NY this morning.  The VIX continues to recover from the volatility shock last week with the VIX now down to 18.84.  US equity markets rallied again yesterday, continuing this week's climb and finishing with the biggest 5-day move since 2011. Large Cap stocks outperformed Small-Caps, with the S&P 500 up 1.21% and the Russell 2000 up 0.99%. Energy was the only sector that was negative in the S&P 500, which was led higher by Utilities, Information Technology, and Consumer Staples. After trading below its 50-day moving average, the S&P 500 closed yesterday above this technical support level. Following this week's rally, we are watching a few of our A-Rated stocks that lagged the market yesterday:

QuantShot: Allison Transmissions Holdings - 11.62% off its 52wkH, reports earnings on 05/07/2018

QuantShot: Cummins Inc - 15.02% off its 52wkH, reports earnings on 05/01/2018

QuantShot: Dr Pepper Snapple - 8.80% off its 52wkH, reports earnings on 04/25/2018

Global Brass and Copper Holdings - 25.97% off its 52wkH, reports earnings on 03/05/2018

Lincoln National Corporation - 11.02% off its 52wkH, reports earnings on 05/02/2018

Louisiana-Pacific Corporation - 6.43% off its 52wkH, reports earnings on 05/04/2018

QuantShot: Lowe's Companies - 11.44% off its 52wkH, reports earnings on 02/28/2018

QuantShot: Micron Technology - 12.81% off its 52wkH, reports earnings on 03/22/2018

QuantShot: Prudential Financial - 13.69% off its 52wkH, reports earnings on 05/02/2018

QuantShot: Thor Industrials - 19.23% off its 52wkH, reports earnings on 03/07/2018

QuantShot: Tyson Foods- 10.36% off its 52wkH, reports earnings on 05/07/2018

United Therapeutics Corporation - 19.88% off its 52wkH, reports earnings on 2/21/2018

Our Top Picks in the News

Click headline for story

Campbell Soup (CPB)

Campbell Soup (CPB) Beats on Q2 Earnings & Sales Estimates (Zack's)
Top Conviction Long in February, please see Quantamize Global Top Picks US Consumer Staples report

 

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

World Wrestling Entertainment (WWE)

WWE Is Laying the Smackdown on the World (Bloomberg)
Top Conviction Long in February, please see Quantamize Global Top Picks US Consumer Discretionary report

 

See more on our World Wrestling QuantShot company report from February 12th

Allison Transmission (ALSN)

Allison Transmission upgraded to Buy after pullback at Stifel (TheFly)
Top Conviction Long in February, please see Quantamize Global Top Picks US Industrials report

 

See more on our Allison QuantShot company report from December 14th

Home Depot (HD)

Home Depot (HD) Beings Spring Preparations, Ramps Up Hiring (Yahoo Finance)
Top Conviction Long in February, please see Quantamize Global Top Picks US Consumer Discretionary report

 

See more on our Home Depot QuantShot company report from February 15th

Walmart (WMT)

Walmart in talks to buy over 40% stake in Flipkart (Moneycontrol)
Top Conviction Long in February, please see Quantamize Global Top Picks US Consumer Staples report

 

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

Dunkin' Brands (DNKN)

Dunkin' Brands starts accelerated buyback plan (Seeking Alpha)
Top Conviction Long in February, please see Quantamize Global Top Picks US Consumer Discretionary report

 

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

Apple Inc (AAPL)

Apple Doing Well in China, But Facing Challenges, But It’s OK, Says Morgan Stanley (Barron's)
Top Conviction Long in February, please see Quantamize Global Top Picks US Tech report

 

See more on our Apple QuantShot company report from January 5th

Cisco Systems (CSCO)

Cisco Returns To Growth and Pays Out, Bears Still Fret Routing (Barron's)
Top Conviction Long in February, please see Quantamize Global Top Picks US Large Cap report

 

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

Global Indices

Index

Levels

1 Day Return

5 Day Return

MTD

YTD

S&P 500

2,731.20

0.00%

4.26%

-3.28%

2.15%

Russell 2000

1,537.20

0.00%

4.02%

-2.40%

0.11%

DJ Industrial Average

25,200.37

0.00%

4.17%

-3.63%

1.95%

NASDAQ Composite Index

7,256.43

0.00%

5.56%

-2.09%

5.11%

CBOE Market Volatility Index

18.75

-

-

-

-

Germany DAX (TR)

12,435.56

0.72%

1.97%

-5.78%

-4.42%

France CAC 40

5,276.75

1.04%

2.82%

-3.77%

-1.69%

Japan Nikkei 225

21,720.25

1.19%

0.39%

-5.97%

-5.71%

Hang Seng Index

31,115.43

0.00%

5.45%

-5.39%

4.00%

Hang Seng China Enterprises

12,535.51

0.00%

5.33%

-7.57%

7.06%

S&P ASX 200

5,904.00

-0.08%

1.22%

-2.21%

-2.57%

Source: FactSet          

Large Cap Conviction Buy Movers

Large Cap A Winners Ticker Sector Industry 1 Day Return 5 Day Return YTD
NuVasive, Inc. NUVA Healthcare Healthcare Equipment

3.34%

3.38%

-17.93%

Zoetis Inc. ZTS Healthcare Pharmaceuticals

5.43%

8.50%

8.97%

Cisco Systems, Inc. CSCO Information Technology Communications Equipment

4.73%

11.51%

15.09%

Red Hat, Inc. RHT Information Technology Systems Software

4.38%

10.43%

16.63%

Service Corporation International SCI Consumer Discretionary Specialized Consumer Services

2.60%

5.18%

3.43%

Large Cap A Losers Ticker Sector Industry 1 Day Return 5 Day Return YTD
NetApp, Inc. NTAP Information Technology Technology Hardware, Storage and Peripherals

-4.90%

2.67%

4.25%

Alliance Data Systems Corporation ADS Information Technology Data Processing and Outsourced Services

-3.76%

-0.01%

-5.06%

Louisiana-Pacific Corporation LPX Materials Forest Products

-3.33%

5.90%

10.70%

CDK Global, Inc. CDK Information Technology Application Software

-1.38%

5.28%

-0.96%

UnitedHealth Group Incorporated UNH Healthcare Managed Healthcare

-1.21%

2.29%

2.52%

Source: Capital IQ            

Large Cap Conviction Short Movers

Conviction Short Winners & Losers            
Large Cap F Winners Ticker Sector Industry 1 Day Return  5 Day Return YTD
Carrizo Oil & Gas, Inc. CRZO Energy Oil and Gas Exploration and Production

-2.16%

1.20%

-12.64%

ADT Inc. ADT Industrials Security and Alarm Services

-2.09%

-7.52%

0.00%

RPC, Inc. RES Energy Oil and Gas Equipment and Services

-1.91%

4.30%

-27.77%

Menlo Therapeutics Inc. MNLO Healthcare Pharmaceuticals

-0.65%

-0.93%

0.00%

Fitbit, Inc. FIT Information Technology Electronic Equipment and Instruments

-3.22%

5.25%

-5.25%

Large Cap F Losers Ticker Sector Industry 1 Day Return  5 Day Return YTD
Popular, Inc. BPOP Financials Regional Banks

4.42%

7.28%

21.22%

Uniti Group Inc. UNIT Real Estate Specialized REITs

5.91%

10.53%

-10.29%

Square, Inc. SQ Information Technology Data Processing and Outsourced Services

5.83%

11.93%

27.75%

Longfin Corp. LFIN Financials Financial Exchanges and Data

3.74%

24.12%

-25.04%

Kimco Realty Corporation KIM Real Estate Retail REITs

2.88%

3.46%

-19.17%

Source: Capital IQ            

Upcoming Earnings

Company Name Ticker Earnings Date
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

Quantalytics Research is the trade name of Quantalytics Research, LLC.

Disclaimer

Quantalytics Research, LLC is not an investment adviser, brokerage firm, or investment company. Any data, information, or opinions presented by Quantalytics Research are for general information purposes only. Such data, information, or opinions are not an offer to sell or to buy, or a solicitation to buy or sell any securities. All investments and investment recommendations entail risks. Any forward looking estimates presented by Quantalytics Research through Quantalytics Edge may prove to be incorrect and not be realized. Any data, information, or opinions expressed in Quantalytics Research in any form may change without notice. Any data, information, or opinions in Quantalytics Research in any form attributed to a third party represent Quantalytics Research's interpretation of the data, information, or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. The data, information and opinions presented have been obtained or derived from sources believed by Quantalytics Research in any form to be reliable. Quantalytics Research, doesn't make any representations as to their accuracy or completeness. Nothing discussed or presented in Quantalytics Research constitutes a representation that any investment, investment strategy, or recommendation is suitable or appropriate to an investor's individual circumstances or otherwise constitutes a personal recommendation. Data, information, or opinions contained in Quantalytics Research in any form give no consideration to any particular individuals' investment needs or objectives, nor do they consider any individuals' financial condition. Consequently, any such data, information, or opinions do not in any way represent a personal recommendation to any individual investor or any entities, whatever the type. Quantalytics Research does not accept any liability for any losses or damages arising from the use of the data, information, or opinions included in Quantalytics Research in any form. All investments involve risks of loss and potential permanent impairment of capital. Investors should diversify risks and exercise prudence and their own judgement in making their investment decisions. Quantalytics Research and any information contained therein is not intended for distribution to or use by any person, or entity, who is a citizen or resident of or located in any locality, state, country, or jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or cause Quantalytics Research, LLC to be required to register or be licensed within any such venues. All data, information, and opinions expressed in Quantalytics Research in any form are as of the date of publication and are subject to change. Quantalytics Research partners and employees may own or have positions in any investment(s) mentioned respectively therein or related thereto and may, from time to time add to, or dispose of, any such investment(s).