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US stocks accelerate losses through the day as growth fears dominate with tepid earnings releases; S&P 500 erases gains for the year

Oct 24, 2018

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US Markets End of Day Snapshot

  • US stocks accelerated losses throughout the session with tepid earnings releases leading to fears on growth; S&P 500 erased its gain for the year
  • The S&P 500 finished down 3.05%, Nasdaq Composite is down 4.43%, and Russell 2000 is down 3.8%
  • Utilities (+2.3%), Real Estate (+1.13%), and Consumer Staples (+0.49%) stocks were the top performers in the S&P 500 today
  • Energy (-3.79%), Tech (-4.43%), and Telecom (-4.88%) stocks were the worst performers in the S&P 500 today
  • Investor sentiment for US stocks finished negative with the advance/decline ratio for the S&P 500 closing at 0.2x
  • 14 stocks in the S&P 500 hit 4-week highs while 263 stocks reached 4-week lows
  • 3 stocks in the S&P 500 closed overbought while 118 stocks closed oversold according to the 16-day RSI Measure
  • 25 stocks in the Nasdaq Composite hit 4-week highs while 470 stocks reached 4-week lows
  • 60 stocks in the Nasdaq Composite closed overbought while 1083 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed  up 4.52 points today  to 25.23 after closing at 20.71 yesterday

Stocks Trending in the News

Click name for Q-Factor rating, more information and latest price.
 

  • Advanced Micro Devices (AMD) reports revenues and EPS well below the Street causing the stock to tumble in post-market trading.  Advanced Micro Devices is guiding for flat C4Q revenues.  Advanced Micro Devices is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Info Tech Global Top Stock Ideas.
  • Aflac (AFL) reports earnings ahead of the Street with revenues 2.2% above forecasts.  Aflac management sees CY2018 Adjusted EPS in the range of USD$3.90-4.05 vs. Consensus of USD$4.06.  Aflac is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas. 
  • Apple (AAPL) CEO Tim Cook took aim at other Silicon Valley players for their use of customer data.  The Apple CEO said other companies’ uses of data equates to “surveillance” as he expounded on the importance of privacy of data.  Apple’s CEO made the comments at an EU privacy conference in Brussels.  Apple is rated ‘Top Buy’ in our US Large-Cap Global Top Stock Ideas and ‘Attarctive’ in our US Information Technology Global Top Stock Ideas.
  • Atos SE (ENXTPA:ATO) announces plans to refinance its USD$1.9bn loan for the Syntel takeover with bonds.  Atos is rated BBB+ by S&P.  Atos is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. 
  • Bank of Montreal (TSX:BMO, ADR:BMO) announces plans to improving efficiency during its Investor Day presentation today.  Bank of Montreal management announced plans to double its share of US capital markets over the next 5 years, double earnings from wealth management over the same period, and target an efficiency ratio of 58% by CY2021.  Bank of Montreal is not rated in our Global Top Stock Ideas. 
  • Boliden AB (OM:BOL) reports 3Q results which were well below analyst expectations.  CY2019 guidance for Capex came in well above where Street forecasts were, which may lead to negative earnings revision in the near future.  Boliden AB is rated “Attractive” in our European Large-Cap Global Top Stock Ideas. 
  • Boston Scientific (BSX) cut its revenue forecast for the full year to USD$9.79-9.83 billion, down from USD$9.8-9.88 billion.  Boston Scientific also cut 4Q revenue guidance to USD$2.53-2.57 billion, down from USD$2.56-2.61 billion.  Boston Scientific full year EPS guidance of USD$1.38-1.40 is up from USD$1.37-1.41, which matches consensus.  Boston Scientific is rated ‘Neutral’ in our US Large-Cap Global Top Stock Ideas.
  • Carpenter Technology (CRS) reports F1Q Sales which beat the highest estimate.  Carpenter Technology also announces the acquisition of LPW Technology for USD$81mm.  Carpenter Technology is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas. 
  • Check Point Software (CHKP) reports 3Q earnings which beat Consensus.  Check Point Software Management announced plans to acquire cloud security firm Dome09 -- deal terms were not released though Cloud Point Software management stated they paid USD$175mm in cash.  Cloud Point Software is not rated in our Global Top Stock Ideas.
  • Citrix Systems (CTXS) reports C3Q Adjusted EPS of USD$1.40, blowing past Street forecasts of USD$1.25.  Citrix Systems also boosts its share repurchase buyback program by USD$750mm.  Citrix Systems is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Info Tech Global Top Stock Ideas. 
  • DTE Energy (DTE) reports C3Q adjusted operating EPS which beat estimates with FY2018 guidance mid-point well ahead of Street expectations.  DTE is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. 
  • DXC Technology (DXC) is plunging today after its Head of Americas left after a drop in sales.  DXC Technology is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our Info Tech Top Stock Ideas. 
  • Ford (F) reports C3Q results which came in-line with market expectations, though management now says it won’t hit its CY2020 operating margin target of 8%.  Net income, for the quarter, dropped 37% Y/Y.  Ford is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Freeport-McMoran (FCX) reports 3Q earnings which are slightly ahead of Street expectations.  While Freeport-McMoran management remains bullish on the outlook for copper prices (and global demand!), they held back on giving any guidance until there is better clarity on the ongoing trade dispute between the US and China.  As an example, Freeport-McMoran management sees a significant copper supply gap approaching in the coming year.  Freeport-McMoran is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. 
  • General Dynamics (GD) reports 3Q earnings which disappointed against Street forecasts after its luxury jets and submarine sales lagged for the period ending September 30.  General Dynamics management reports that consolidated profit margins were constrained by higher costs associated with new product launches in its submarine businesses.  General Dynamics is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and in our Industrial Global Top Stock Ideas. 
  • Heineken (HEIA NA) reported organic beer volumes above expectations.  Heineken saw organic beer volumes grow 4.6% while the estimate was for 4.3%.  Heineken saw Americas volume grow 8.1%, while Asia Pacific grew 4.8% and Europe grew 2.2%.   Heineken brewed less in Europe and Asia than expected.    Heineken is rated ‘Unattractive’ in our European Large-Cap Global Top Stock Ideas.
  • Hilton (HLT) increased full year EPS guidance thought it is still a touch below expectations.  Hilton expects EPS of USD$2.67-2.72 for the full year up from  USD$2.64-2.71, in line with consensus.  Hilton sees 4Q RevPar growing 2-3% with adjusted ebitda in the range of USD$518-538mm.  Hilton 3Q revenue of USD$2.25 billion came below USD$2.4 billion expected.  Hilton is rated ‘Top Buy’ in our US Large-Cap and ‘Attractive’ in our US Consumer Discretionary Global Top Stock Ideas.
  • Illinois Tool Works (ITW) reports C3Q results which were in-line with Street expectations though the mid-point of FY guidance fell short of analyst expectations.  Illinois Tool Works management sees a slowdown in international organic growth with continued materials costs inflation squeezing margins.  Illinois Tool Works is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Kering (KER FP) is trading 7% higher at 377.70 euros after reporting its Gucci brand reported 35% growth in the last quarter, beating the 28% expectations.  Kering delivered strong growth in China at a time when growth concerns are strong for luxury goods sellers in China.  Kering is rated ‘Attractive’ in our European Large-Cap Global Top Stock Ideas.
  • Lockheed Martin Corp’s (LMT) potential USD$15 billion sale of its Thaad missile defense system is at risk in the wake of the Jamal Khashoggi killing.  The Lockheed Martin Corp sale is part of a USD$110 billion package of arms the US intends to sell to Saudi Arabia.  Lockheed Martin Corp would see sales over a number of years if completed.  Lockheed Martin Corp is rated ‘Attractive’ in our US Large-Cap Global Top Stock Ideas and ‘Neutral’ in our US Industrials Global Top Stock Ideas. 
  • Melexis (MELE BB) cut its full year guidance. Melexis cut full year revenue growth at 11%, down from 13-14%.  Melexis expects revenue of 146.7mm euros while recent consensus is for 148mm euros.  Melexis sees full year gross margin at ~45%.  Melexis reported 3Q results in line with EPS of 0.74 euros while consensus was 0.77 euros.  Melexis is rated ‘Attractive’ in our European SMID-Cap Global Top Stock Ideas.
  • Microsoft (MSFT) reports F1Q results which top estimates, though capex came in 4.8% below expectations.  Microsoft’s beat was driven by its cloud computing unit as revenue from Azure cloud computing services jumped 76% Y/Y.  Microsoft is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Info Tech Global Top Stock Ideas. 
  • The Chinese government has announced plans to halt the approval process for new games licenses through a stopgap loophole called the green channel. This new restriction could negatively impact the growth of the USD$38bn online gaming market, including Tencent (SEHK:700, ADR: TCEHY) and Netease (NTES).  Tencent is rated “Top Buy” in our China All-Cap Global Top Stock Ideas and Netease (NTES) is rated “Neutral” in our China All-Cap Global Top Stock Ideas. 
  • Norfolk Southern (NSC) reports C3Q earnings which beat estimates on better freight volumes and improved pricing.  Norfolk Southern was upgraded to “Buy” at Loop Capital with a price target of USD$190.  Norfolk Southern is a “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrial Global Top Stock Ideas. 
  • O’Reilly Auto (ORLY) reports 3Q results of USD$4.50, blowing out consensus of USD$4.31.  Same-store-sales was +3.9% for the quarter.  While 3Q results were strong, O’Reilly Auto C4Q guidance came in below Street estimates with same-store-sales guidance of +2-4%.  O’Reilly Auto is rated “Top Buyl” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Owens Corning (OC) reports 3Q earnings which disappoint as reported net sales missed the lowest Street estimate.  Owens Corning management cut CY2018 guidance for operating profit and now sees EBIT in-line with CY2019.  Owens Corning is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our Industrial Global Top Stock Ideas
  • Sirius XM Holdings (SIRI) reports C3Q results which were slightly ahead of Street expectations with FY guidance in-line with consensus, disappointing investors. Sirius XM management expects to close its acquisition of Pandora sometime near the end of C1Q2019.  Sirius XM is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas. 
  • STMicroelectronics (STM FP) forecast zero improvement in gross margin for the fourth quarter.  STMicroelectronics sees 5.7% revenue growth in 4Q to USD$2.7 billion; the revenue guidance matches guidance but the 39.8% gross margin is below 40.2% guidance for STMicroelectronics.  STMicroelectronics is rated ‘Neutral’ in our European Large-Cap Global Top Stock Ideas.
  • Sunny Optical (2382 HK) closed 4.6% lower at HKD$78.50 after O-Film Tech (002456 CH) announced it is expanding into the vehicle lens market.  Jefferies commented that any new player in the sector would need time to ramp up glass and hybrid lens designs and capacity, so that in the near-term, Sunny Optical does not have much to worry about;  longer term, it could be a challenge for Sunny Optical.  Sunny Optical is rated ‘Unattractive’ in our China All-Cap Global Top Stock Ideas.
  • Tesla (TSLA) reports C3Q Adjusted EPS of USD$2.90, blowing out Street estimates of –USD$0.15.  3Q Free Cash Flow came in at USD$881mm vs. Estimates of USD$2809mm.  According to Tesla management, Model 3 production averaged ~4,300 cars/week in C3Q.  Tesla is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Texas Instruments (TXN) warned that it is seeing waning demand across many of its markets.  Texas Instruments’ CFO warned, “we are heading into a softer market” on the company’s conference call.  Susquehanna wrote in a note that guidance from Texas Instruments “bodes poorly for the group: when commenting on the sector overall.  Texas Instruments is rated ‘Top Buy’ in both our US Large-Cap and US Information Technology Global Top Stock Ideas.
  • Visa  (V) reports C3Q results in-line with market forecasts though operating revenues missed Consensus estimates.  Visa management sees CY2019 eps growth in mid-teens and see net revenue growth in low double digits.  Visa is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Info Tech Global Top Stock Ideas.
  • Whirlpool (WHR) reports 3Q EPS that beats the highest estimate, coming in at USD$4.55.  Whirlpool managements increased FY CY2018 guidance to USD$14.50-14.80.  Whirlpool is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas. 
  • WR Grace (GRA) reports adjusted 3Q earnings which beat analyst expectations and raised FY Adjusted EPS to USD$4.00-4.05 vs. previous guidance of USD$3.90-4.00.  Rumors continue to swirl that WR Grace remains a potential takeover target for Honeywell (HON).  WR Grace is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.

US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -4.45 basis points to 2.83%
  • US 5-Year Treasury Bonds are higher with yields down -7.22 basis points to 2.93%
  • US 10-Year Treasury Bonds are higher with yields down -6.22 basis points to 3.10%
  • The US Treasury 2s-5s Spread has narrowed 2.77 basis points to 0.11%
  • The US Treasury 2s-10s Spread has narrowed 1.77 basis points to 0.27%
  • US Treasury 5s-10s Spread has widened 1 basis points to 0.17%

Currencies

  • EUR€ is down 0.628% against the USD$ in after hours to 1.1399
  • GBP£ is down 0.747% against the USD$ in after hours to 1.2886
  • CHF is down 0.229% against the USD$ in after hours to 1.0028
  • JPY¥ is down 0.249% against the USD$ in after hours to 112.16

Commodities

WTI Crude is up 0.66% to USD$66.77/bbl with the Brent-WTI spread down USD$-1.18 to USD$8.52/bbl
Gold is little changed 0.19% to USD$1232.58/oz

 

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

S&P 500 Sector ETFs - End of Day

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

Russell 1000 Factor ETFs - End of Day

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

S&P 500 Movers

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Outperformers Sector Price 1D % Chg Volume
Varian Medical Systems Inc Health Care 112 7.81%                318,037
DTE Energy Co Utilities 118 5.23%                496,322
Juniper Networks Inc Information Technology 28.7 3.95%            1,449,377
NiSource Inc Utilities 26.2 3.68%                505,776
Essex Property Trust Inc Real Estate 252.03 3.20%                  86,821
 
Underperformers Sector Price 1D % Chg Volume
DXC Technology Co Information Technology 73.3 -16.34%            1,866,777
Robert Half International Inc Industrials 57.4 -10.43%                625,706
NVIDIA Corp Information Technology 199 -9.99%            5,024,813
Alexion Pharmaceuticals Inc Health Care 111 -9.62%            1,741,679
Netflix Inc Communication Services 302 -9.37%            4,310,520