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CME Group Q3 Volumes Solid, September ADV Increases Y/Y

Zacks Equity Research

CME Group CME reported solid third-quarter 2019 average daily volumes (“ADV”). Volumes increased 30% year over year to 20.2 million contracts per day. Four of its six product lines reported double-digit growth in ADV.

Interest Rate options ADV of 10.9 million contracts surged 39% while Equity Indexes ADV of 3.9 million contracts jumped 47%. Metals ADV increased 32% to a record 0.8 million and Energy ADV of 2.5 million increased 12%. However, Agricultural Commodities and Foreign Exchange ADV declined 2% and 10% respectively.

Concurrently, the company also reported double digit increase in September ADV in Interest Rate options, Equity Indexes, Energy and Metals. Foreign Exchange and Agricultural Commodities reported single-digit decline in September ADV.

Interest rate volume of 9.9 million contracts per day shot up 16% while Equity index volume of nearly 4 million contracts per day increased 18%. Metals volume of 0.8 million contracts per day increased 37% whereas Energy volume of 2.8 million contracts per day witnessed an increase of 10% year over year. However, Agricultural Commodities volume of 1.2 million contracts decreased 8%. Foreign exchange volumes contracted 6% to 1.1 million contracts per day.

CME group boasts 90% market share of global futures trading and clearing services. Given its sturdy market position with diverse derivative product lines and global reach, ADV should continue to retain momentum. Also, increasing electronic trading volume adds scalability and hence leverage to CME Group’s operating model.

The Zacks Consensus Estimate for earnings in the third quarter is pegged at $1.71, indicating year-over-year improvement of 17.9% on 36.7% higher revenues. Our proven model presently shows that the company is likely to beat estimates as it reports third quarter results on Oct 30. This is because it has the right combination of its Zacks Rank #2 and Earnings ESP of +2.25% makes prediction difficult. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Shares of this Zacks Rank #2 (Buy) leading futures exchange in the world in terms of trading volume as well as notional value traded outperformed the industry in the third quarter. While the company gained 8.9%, the industry registered an increase of 7.4%.



Recently, MarketAxess Holdings MKTX reported trading volume for September 2019. Trading volume of $176.1 billion for the month consisted of $88.7 billion in U.S. high-grade volume, $83.9 billion in other credit volume, and $3.5 billion in liquid products volume.

Others Stocks to Consider

Some other top-ranked players in the finance space include Nasdaq NDAQ and CNA Financial CNA. Both these stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Nasdaq is a leading provider of trading, clearing, marketplace technology, regulatory, securities listing, information and public and private company services. The company delivered 2.52% positive earnings surprise in the last reported quarter.

CNA Financial provides commercial property and casualty insurance products, primarily in the United States. The company came up with a positive surprise of 6.93% in the last reported quarter.

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