Trading Daily

North America

Market Commentary

Todays Highlights (J Mckeever/K Koenig/A Dash/R Cherry)

Printable Version:
.

It was a very quiet session yesterday in the US. We were pressed by

HealthCare (ongoing concerns re BMY) and Airlines (weak July traffic
stats). Energy led as Crude bounced back to $43 and ignored the
weaker China trade data. Department Stores had a solid day ahead of
a busy earnings week for the group (COH, M, KORS, RL, JWN, KSS,
and JCP). There wasnt any major macro data yesterday. SPX took a
breather on street-wide muted volumes (sub 6 billion shares traded)
after closing at another all-time record high Friday. Futures are
creeping up this morning in front of some key data as continued
optimism from Fridays payroll figures keeps powering positive investor
sentiment this week. At 8:30am we will get the Nonfarm Productivity for
2Q (prelim) followed by the August IBD/TIPP Economic Optimism
reading and the Jun Wholesale Inventories release at 10am. The US
Treasury will announce the results of its auction for $24B of 3-year
notes.
With US earnings in the home stretch (84% of S&P 500, 78% of
Russell Mid Cap, and 63% of Russell 2000 have reported) our US
strategy team updated their thoughts on the 2Q16 reporting season.
Key takeaways include: (1) Headline stats have weakened a bit since
the start of reporting season, but overall they still look strong. EPS
beats are up across size segments, the improvement continues to be
driven by value companies in mid and large cap. (2) Guidance trends
have also come in a bit and are below last quarter across all size
segments, though trends for mid & large cap value have improved. (3)
Current EPS growth expectations show that small, mid and large cap
YoY EPS growth has already troughed, but 3Q16 YoY growth
estimates continue to drift lower. (4) Short term earnings momentum for
small, mid and large caps has slipped post Brexit, suggesting that the
1H uptrend in revisions is reversing. (5) The recent downtick in
revisions has been broad based at the sector level. Staples, HC and
Materials appear to be peaking and ST trends have room to fall before
hitting past lows. Log onto CS Plus for the full note.

Tuesday, August 09, 2016

MARKET UPDATE
NY Time: 2:42 PM

STOCKS
Americas:
Dow (Fut)
S&P500 (Fut)

% Chg

Level

-0.07% 18441.0
-0.14% 2173.8

Status

(Opn)
(Opn)

Europe:

EuroStoxx50 (Fut)
FTSE 100 (Fut)

0.27%
0.27%

2978.0
6758.5

(Clsd)
(Opn)

2.44% 16650.6
1.57% 22494.8

(Clsd)
(Clsd)

Asia:

Nikkei 225
HangSeng
OPTIONS
VIX (Index)
BONDS
3 Mth Yld
2 Yr Yld
10 Yr Yld
FX
Euro
Pound
Aussie
Yen
COMMODITIES
Oil
Gold

0.19 pts

-0.01%
0.00%
-0.01%

11.58 (Yst Cls)

0.25%
0.72%
1.58%

(Opn)
(Opn)
(Opn)

% Chg vs USD

$-
$-
$-
$-

-0.03%
1.108
-0.28%
1.304
0.45%
0.765
-0.61% 102.440

2.92%
43.02
0.01% 1335.63
Source: Bloomberg

Source: Bloomberg

Index Changes Today

EPRA - Developed World: INN-U CN (Deletion, -0.038%. -0.8m shares to
sell = 1.6 days)
FTSE DM AllCap: INN-U CN (Deletion, -0.001%. -0.9m shares to sell = 1.9
days)
FTSE DM AW: AAPL US (Downweight, -0.027%. -1.3m shares to sell =
0.0 days)
FTSE DM AW: V US (Downweight, -0.007%. -0.5m shares to sell = 0.1
days)
MSCI: VER US (Upweight, 0.003%. 2.1m shares to buy = 0.2 days) 6

2200

2050
2000

29-Jul

1-Jul

15-Jul

17-Jun

1950

S&P Price Level

2150
2100

3-Jun

Source: Bloomberg

Volume
S&P 500

20-May

Prior
94.5
-0.6%
4.5%
0.0%
0.5%
45.5

6-May

Consensus
94.5
0.4%
1.8%
0.0%
0.5%
47.3

Daily US Volume vs S&P Index

22-Apr

Economic Statistic/Event
NFIB Small Business Optimism Index
US Output Per Hour Nonfarm Business Sector QoQ SA
US Unit Labor Costs Nonfarm Business Sector QoQ % SAAR
Merchant Wholesalers Inventories Total Monthly % Change
Merchant Wholesalers Sales Total Monthly % Change SA
US IBD/TIPP Index of Economic Optimism

16
14
12
10
8
6
4
2
-

8-Apr

Time
6:00 AM
8:30 AM
8:30 AM
10:00 AM
10:00 AM
10:00 AM

Shares (Billions)

Todays Economic Announcements:

1900

Source: Bloomberg

Page 1 of 3

US Trading Daily
9 August 2016

Chart of the Day: 2Q16 EPS Report Card (Home Stretch) (Lori Calvasina)

2Q16 EPS Report Card (Home Stretch): Lori

Calvasina (Chief US Equity Strategist) has just
published updated thoughts on the 2Q16 reporting
season, now that 84% of S&P 500 companies, 78%
of Russell Mid Cap companies and 63% of Russell
2000 companies have reported results. Key
takeaways include:

(1) Headline stats have weakened a bit since the start

of reporting season, but overall they still look strong.
EPS beats are up across size segments, the
improvement continues to be driven by value
companies in mid and large cap.

(2) Guidance trends have also come in a bit and are

below last quarter across all size segments, though
trends for mid & large cap value have improved.

(3) Current EPS growth expectations are showing

that small, mid and large cap yr/yr EPS growth has
already troughed, however, 3Q16 yr/yr growth
estimates have continued to drift lower.

(4) Short term earnings momentum for small, mid and

large caps has slipped post Brexit, suggesting that
the uptrend in revisions that we had seen in 1H is
reversing.

(5) The recent downtick in revisions has been broad

based at the sector level. Staples, HC and Materials
appear to be peaking and ST trends have room to fall
before hitting past lows

Source: Credit Suisse US Equity Strategy, S&P Capital IQ/Clarifi, Russell, CIQ estimates, as of
8/5/2016

Click here to access the full report.

Delta One (John Penney)

ETF Desk Color (Sources: Bloom berg, CS MarketSnap)

Activity on our desk was 70% to for sale and hedge funds were 54% of our flows

Hedge funds were buying Retail (XRT) via ETF Nitro and Energy (XLE) via ETF Nitro while selling Homebuilders (ITB), Staples
(XLP) via ETF Nitro, and Low Volatility (SPLV) via ETF Nitro

Institutions were selling China (MCHI) and Gold Miners (GDX) via ETF Nitro while buying Low Volatility (EFAV).

Yesterdays Fund Flows (Sources: Bloom berg)

ETF flows started the week higher with US Large Cap (SPY +$567mm, QQQ +$175mm, IVV +$143mm) having its biggest
day of inflows in over a week

Within sectors, Utilities (XLU -$315mm) continued to see outflowseight out of the last ten dayswhile Financials (XLF
+$322mm) brought in the most

IG and HY Corporates led the way among Fixed Income ETFs (JNK +$180mm, LQD +$135mm, HYG +$103mm)

Gold ETF flows were down for the first time in two weeks (GLD -$281mm)

Canada (EWC +$111mm) had its biggest day of inflows since March.

Page 2 of 3

US Trading Daily
9 August 2016

Question of the Day

Today: The saying "When it rains, it pours" comes from an ad campaign in 1911 for what product? Hint: it is very common,
and still commonly used today

Previous Day: the original marshmallow candy is derived from what green vegetable, common in Southern cooking?
Answer: okra

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Interest Rates
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praveen.korapaty@credit-suisse.com

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laura.prostic@credit-suisse.com

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