Morning Quant Ride

May 31, 2018

US Stocks

  • Global stocks are trading sideways this morning as we inch closer to the June 1 deadline for the exemptions to steel and aluminum tariffs applied to imports to the US from the European Union
  • US equity index futures are little changed this AM with Dow Jones minis -0.09%, S&P500 minis -0.05% and Nasdaq 100 minis +0.02%
  • Options market appear to be disregarding the cautiousness of stocks with the VIX currently at 14.62, down from yesterday’s close of 14.94
  • SPY OTM June 1 Puts, IWM OTM July 20 Puts and EEM OTM June 15 Puts are the most actively traded options contract in the US this AM
  • The US 10-year is flat this morning, trading at a yield of 2.873%
  • The USD$ Index is down 0.19% this AM on the back of a strengthening EUR€ +0.27%, GBP£ +0.40%, and CHf +0.30%.
  • The Brent-WTI differential has widened to USD$8.78, its highest level since April 2015
  • Infrastructure bottlenecks across West Texas and Oklahoma shale plays are driving the widening price different between Brent and WTI – some forecasters suggest it could reach USD$20/bbl in CY2019

International Stocks

  • European sentiment is quieting as Italian political parties seek compromise that would eliminate the need for a new election
  • European stocks are mixed this morning, with the Euro Stoxx 600 +0.18%, the FTSE 100 +0.23%, the DAX -0.34%, and the CAC40 +0.21%
  • Eurozone preliminary CPI of +1.9%, was higher than expected, +1.6%
  • German 10-year Bund yields are flat this morning, trading at 0.371%
  • Italian 10-year yields are falling this morning, down 10.6 basis points to 2.736%
  • Spanish 10-year yields are down 3 basis points to 1.468%
  • European periphery markets are higher today, with Italy’s FTSE MIB +0.67%, Spain’s IBEX +0.27%, Portugal’s PSI +1.04%, and Greece’s ASE +0.95%
  • Spanish Prime Minister Mariano Rajoy is considering resigning if he does not receive the backing from the Basque Nationalists
  • Asian stocks were higher overnight, with the Nikkei 225 +0.83%, Hang Seng +1.37%, and the Hang Seng China Enterprise Index +1.78%
  • China’s State council announced that they will be lowering its import tariff rates on consumer goods on July 1
  • China’s equities will be joining the MSCI indexes tomorrow

Cryptos

  • Bitcoin’s hash rate has been steadily increasing over the past year even though its price has been in a down trend. Bitcoin’s network has experienced a surge in the number of miners that contribute to the platform which shows miners are interested in keeping the network running
  • Philippine Mobile payment application and Cryptowallet, Coins.ph, announced it has reached five million users this week. The company is looking to add Bitcoin Cash (BCH) and Ether (ETH) to its platform. The Philippine central bank estimated that close to 86% of the country does not use banking services
  • The Hong Kong Monetary Authority (HKMA), has no plan to issue a central bank digital currency, like other central banks have been discussing. Joseph Chan, the acting secretary for financial services and treasury said that a central bank digital currency would not be attractive for Hong Kong but the HKMA will continue to monitor developments

*Data in Price Return

S&P 500 Sector Performance

*Data in Total Return 

Conviction Buy Laggards From Yesterday We Are Watching Today

Click name for Q-Factor rating and financial data.

Allison Transmission Holdings, Inc. - 7.75% off its 52wkH on 10/31/2017, reports earnings on 07/27/2018

Express Scripts Holding Company - 10.41% off its 52wkH on 03/08/2018, reports earnings on 07/25/2018

MSC Industrial Direct Co., Inc. - 9.35% off its 52wkH on 01/09/2018, reports earnings on 07/11/2018

SMART Global Holdings, Inc. - 19.47% off its 52wkH on 01/00/1900, reports earnings on 06/19/2018

The Chemours Company - 14.02% off its 52wkH on 10/24/2017, reports earnings on 08/02/2018

The Timken Company - 12.40% off its 52wkH on 01/22/2018, reports earnings on 07/31/2018

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

SEC officials are investing the possibility that Aflac Inc (AFL) misled investors in its financial reports by manipulating earnings through altering the timing of when it booked revenue.

Alphabet’s (GOOGL) autonomous driving unit Waymo has been in negotiations with Uber about using Waymo’s technology on Uber’s app. 

Astellas Pharma Inc (TSE:4503) has announced a JPY¥ 100 billion share repurchase program.

Cars.com (CARS) has hired JP Morgan to explore the possibility of selling the firm, according to a New York Times report.

Ciena Corp (CIEN) shares are down 8.52% before the market opens today, after reporting 2Q2018 EPS that was below the consensus ($0.23 vs $0.30 forecasted).

Dollar General (DG) announced 1Q2018 EPS that was softer than expected ($1.36 vs $1.40 consensus). Dollar General’s stock is down 6.13% prior to today’s trading.

Dollar Tree (DLTR) shares are down 1.40%, after the company announced 2Q2018 EPS that was worse than expected ($1.07 vs $1.16 estimated).

Italian utility firm Enel SpA (BIT:ENEL) will acquire AES Corp’s Brazilian utility unit, in a deal that is worth $2.03 billion

J. Jill Inc (JILL) shares are up 9.03% pre-market after the company reported 2Q2018 EPS that firmly beat estimates ($0.29 vs $0.19 projected).

Micron Technology (MU) has been downgraded at Morgan Stanley from overweight to equal weight, with a price target set at $65 (vs $61.00 current price). Micron’s shares are 2.51% lower pre-market.

Sears Holdings (SHLD) shares are down 3.43% before the open after announcing that it would be closing an additional 100 stores following disappointing 1Q2018 earnings results.

Stock Movers

Conviction Buy Winners and Losers

On Mobile/Tablet scroll to the right.

Winners  Ticker Sector Industry 1 Day Return 5 Day Return  YTD
CME Group Inc. CME Financials Financial Exchanges and Data 4.29% 3.69% 13.31%
HP Inc. HPQ Information Technology Technology Hardware, Storage and Peripherals 4.04% 1.14% 5.47%
AbbVie Inc. ABBV Healthcare Biotechnology 3.56% 1.91% 6.51%
Kirby Corporation KEX Industrials Marine 3.35% 2.61% 38.47%
Marriott Vacations Worldwide Corporation VAC Consumer Discretionary Hotels, Resorts and Cruise Lines 3.19% 1.95% -9.82%

 

Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Mohawk Industries, Inc. MHK Consumer Discretionary Home Furnishings -0.98% -2.25% -0.62%
RPM International Inc. RPM Materials Specialty Chemicals -0.57% -1.14% 5.47%
Motorola Solutions, Inc. MSI Information Technology Communications Equipment -0.19% -0.99% -0.33%
The J. M. Smucker Company SJM Consumer Staples Packaged Foods and Meats -0.08% -1.05% -4.81%
Micron Technology, Inc. MU Information Technology Semiconductors -0.07% 1.81% 32.80%

Source: S&P Capital IQ

Conviction Short Winners and Losers

On Mobile/Tablet scroll to the right.

Winners Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Finisar Corporation FNSR Information Technology Communications Equipment -2.63% -4.41% 4.43%
Tempur Sealy International, Inc. TPX Consumer Discretionary Home Furnishings -2.26% -0.57% 5.50%
nLIGHT, Inc. LASR Information Technology Electronic Equipment and Instruments -2.32% -1.18% 48.38%
Acacia Communications, Inc. ACIA Information Technology Communications Equipment -1.79% -2.23% 16.77%
Spirit Airlines, Inc. SAVE Industrials Airlines -1.45% -3.31% 2.94%

 

Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Exact Sciences Corporation EXAS Healthcare Biotechnology 11.12% 13.05% 11.50%
Zuora, Inc. ZUO Information Technology Systems Software 6.14% 2.52% 0.00%
Oasis Petroleum Inc. OAS Energy Oil and Gas Exploration and Production 5.67% 7.33% 55.05%
Shake Shack Inc. SHAK Consumer Discretionary Restaurants 5.66% 5.62% 42.66%
Carrizo Oil & Gas, Inc. CRZO Energy Oil and Gas Exploration and Production 5.47% 4.64% 18.80%

Source: S&P Capital IQ

Events Calendar

On Mobile/Tablet scroll to the right.

Company Name Ticker Event Date Event Type Q-Factor Score
Ciena Corporation CIEN 5/31/2018 Earnings Release Date US Large-Cap: C, US Information Technology: D
Burlington Stores, Inc. BURL 5/31/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: A
Tech Data Corporation TECD 5/31/2018 Earnings Release Date US Large-Cap: C, US Information Technology: A
Lululemon Athletica Inc. LULU 5/31/2018 Earnings Release Date US Large-Cap: B
Dollar General Corporation DG 5/31/2018 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: A
Costco Wholesale Corporation COST 5/31/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: B
GameStop Corp. GME 5/31/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: C
VMware, Inc. VMW 5/31/2018 Earnings Release Date US Large-Cap: C, US Information Technology: D
Workday, Inc. WDAY 5/31/2018 Earnings Release Date US Large-Cap: D, US Information Technology: C
Ulta Beauty, Inc. ULTA 5/31/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: B
Road King Infrastructure Limited SEHK:1098 5/31/2018 Estimated Earnings Release Date China All-Cap: B
MMG Limited SEHK:1208 5/31/2018 Estimated Earnings Release Date China All-Cap: B
Yuexiu Property Company Limited SEHK:123 5/31/2018 Estimated Earnings Release Date China All-Cap: B
Swire Properties Limited SEHK:1972 5/31/2018 Estimated Earnings Release Date China All-Cap: C
Fang Holdings Limited SFUN 5/31/2018 Estimated Earnings Release Date China All-Cap: C
Brilliance China Automotive Holdings Limited SEHK:1114 5/31/2018 Estimated Earnings Release Date China All-Cap: D
Enterprise Development Holdings Limited SEHK:1808 5/31/2018 Estimated Earnings Release Date China All-Cap: F
AVIC International Holding (HK) Limited SEHK:232 5/31/2018 Estimated Earnings Release Date China All-Cap: F
China Power International Development Limited SEHK:2380 5/31/2018 Estimated Earnings Release Date China All-Cap: C
ENN Energy Holdings Limited SEHK:2688 5/31/2018 Estimated Earnings Release Date China All-Cap: B
IGG Inc SEHK:799 5/31/2018 Estimated Earnings Release Date China All-Cap: B
Sinopec Kantons Holdings Limited SEHK:934 5/31/2018 Estimated Earnings Release Date China All-Cap: D
LVGEM (China) Real Estate Investment Company Limited SEHK:95 5/31/2018 Estimated Earnings Release Date China All-Cap: B
China Taiping Insurance Holdings Company Limited SEHK:966 5/31/2018 Estimated Earnings Release Date China All-Cap: C
The Bank of East Asia, Limited SEHK:23 5/31/2018 Estimated Earnings Release Date China All-Cap: C
Leidos Holdings, Inc. LDOS 5/31/2018 Estimated Earnings Release Date US Large-Cap: B, US Information Technology: A
CMBC Capital Holdings Limited SEHK:1141 5/31/2018 Estimated Earnings Release Date China All-Cap: D
China Merchants Port Holdings Company Limited SEHK:144 5/31/2018 Estimated Earnings Release Date China All-Cap: C
Sunac China Holdings Limited SEHK:1918 5/31/2018 Estimated Earnings Release Date China All-Cap: B
Hopson Development Holdings Limited SEHK:754 5/31/2018 Estimated Earnings Release Date China All-Cap: C
Patterson Companies, Inc. PDCO 5/31/2018 Estimated Earnings Release Date US Large-Cap: C
Big Lots, Inc. BIG 6/1/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Abercrombie & Fitch Co. ANF 6/1/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: B
Ford Motor Company F 6/1/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: B
China Resources Gas Group Limited SEHK:1193 6/1/2018 Estimated Earnings Release Date China All-Cap: B
YiChang HEC ChangJiang Pharmaceutical Co., Ltd. SEHK:1558 6/1/2018 Estimated Earnings Release Date China All-Cap: B
Kingboard Laminates Holdings Limited SEHK:1888 6/1/2018 Estimated Earnings Release Date China All-Cap: C
China Traditional Chinese Medicine Holdings Co. Limited SEHK:570 6/1/2018 Estimated Earnings Release Date China All-Cap: B
China Railway Signal & Communication Corporation Limited SEHK:3969 6/1/2018 Estimated Earnings Release Date China All-Cap: B
Grand Baoxin Auto Group Limited SEHK:1293 6/1/2018 Estimated Earnings Release Date China All-Cap: C
Dynagreen Environmental Protection Group Co., Ltd. SEHK:1330 6/1/2018 Estimated Earnings Release Date China All-Cap: C
Zhongyu Gas Holdings Limited SEHK:3633 6/1/2018 Estimated Earnings Release Date China All-Cap: C
Greentown China Holdings Limited SEHK:3900 6/1/2018 Estimated Earnings Release Date China All-Cap: C
Gemdale Properties and Investment Corporation Limited SEHK:535 6/1/2018 Estimated Earnings Release Date China All-Cap: C