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US stocks surge, with strong tech earnings fueling markets; S&P 500 closes up for first time in 7 sessions

Oct 25, 2018

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US Markets End of Day Snapshot

  • US stocks surged today with strong tech earnings fueling markets higher; the S&P 500 turned postive for the year and was up for the first time in 7 sessions
  • The S&P 500 finished up 2.17%, Nasdaq Composite up 2.96%, and Russell 2000 up 2.38%
  • Consumer Discretionary (+3.4%), Tech (+3.28%), and Telecom (+2.73%) stocks were the top performers in the S&P 500 today
  • Industrials (+0.6%), Consumer Staples (+0.09%), and Utilities (-1.68%) stocks were the worst performers in the S&P 500 today
  • Investor sentiment for US stocks finished positive with the advance/decline ratio for the S&P 500 closing at 4.95x
  • 48 stocks in the S&P 500 hit 4-week highs while 258 stocks reached 4-week lows
  • 7 stocks in the S&P 500 closed overbought while 204 stocks closed oversold according to the 16-day RSI Measure
  • 17 stocks in the Nasdaq Composite hit 4-week highs while 774 stocks reached 4-week lows
  • 59 stocks in the Nasdaq Composite closed overbought while 1179 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed  down -13.45 points today  to 11.78 after closing at 25.23 yesterday

Stocks Trending in the News

Click name for Q-Factor breakdown, latest price details, more financial info and sentiment data.

  • 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.
  • Altria Group (MO) reports C3Q results that are in-line with market forecasts and boosts it FY CY2018 guidance to USD$3.95-4.03 vs. Consensus of USD$3.99.  In addition, Altria announces it is pulling e-Cigarette flavors as the FDA cracks down on spiking teen use of e-Cigarettes.  Altria is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas. 
  • Amazon (AMZN) reports C3Q EPS of USD$5.75 vs Street estimates of USD$3.11.  While earnings blew out estimates, revenues came in weaker than expected at USD$56.5bn vs. a forecast of USD$57.1bn.  Amazon is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Anheuser-Busch Inbev (ENXTBR:ABI) reports C3Q earnings results which missed expectations and cut its dividend payout in half to 80 Euros cents.  The compay reports organic revenue growth of +4.5% vs. the Street at +5.9%.  Anheuser-Busch Inbev is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. 
  • Chipotle Mexican Grill (CMG) reports Adjusted C3Q EPS of USD$2.16, nearly double what it was last year.  Chipotle management expects its digital pickup business to continue to grow in CY2019.  Chipotle is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Comcast (CMCSA) reports C3Q E of USD$0.65, topping Street estimates on the back of better than expected net changes in internet users, +363k vs forecasts for +299k.  
  • Continental AG’s (DB: CON) CFO, Wolfgang Schaefer, said in an interview with Reuters that he expects 3Q2018 adjusted operating profit of ~770mm euros, a drop from the 1.08bn euros operating profit posted a year ago. Continental’s CFO also sees FY2018 revenue of about 44.5bn euros which is in line with consensus revenue estimates of 44.99bn euros. Continental AG is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Daimler AG (CXE: DAI) reports 3Q2018 revenue of 40.2bn euros and 794,700 car and commercial vehicles sold in 3Q2018, down 4% y/y. Daimler AG’s truck division helped to offset low automotive sales with its NAFTA region truck sales 16% y/y in 3Q2018 to 52,700 trucks from 45,300 in 3Q2017 -- the entire truck division saw unit sales up 8% y/y to 136,100 units in 3Q2018. Daimler is rated as “Unattractive” in our European Large-Cap Global Top Stock Ideas. 
  • Ford Motor Co. (F) will recall up to 1.5 million of its Focus models after discovering a defect involving a faulty fuel system. Focus models made between 2012 and 2018 may have a faulty canister purge valve that could get stuck in an open position and cause the car to stall. Ford stressed in a public statement that they are not aware of any accidents, injuries, or fires caused by the defect. Ford is rated “Neutral” in both our US Large-Cap and US Consumer Discretionary Global Top Stock Ideas.  
  • Franklin Resources (BEN) reports 3Q2018 EPS of $0.96 which blows past consensus EPS expectations of $0.74. Franklin Resources also announces the acquisition of Benefit Street Partners, an alternative credit manager. Franklin Resources’ management attributed $0.17 of its 3Q2018 EPS to tax reform enacted earlier in the year. Franklin Resources is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. 
  • Gilead Sciences, Inc. (GILD) reports CY3Q2018 GAAP EPS of $1.60 which largely beat consensus EPS of $1.29. Gilead Sciences’ CY3Q2018 revenue fell 14% y/y to $5.6 bn although it still surpassed consensus revenue estimates by $230mm. Gilead Sciences is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas. 
  • Grubhub (GRUB) earnings call disappointed investors with management reporting C4Q2018 EBITDA guidance of between $40mm and $50mm while consensus estimates are for $72.6mm. Grubhub reports 3Q2018 EPS of $0.24 per share, up 60% y/y from $0.15 per share. Grubhub’s revenue also grew in 3Q2018 to $247mm while consensus estimates called for $238.9mm. Grubhub is rated “Attractive” in our US Information Technology Global Top Stock Ideas and “Neutral” in our US Large-Cap Global Top Stock Ideas.  
  • Hershey (HSY) reports C3Q results which were in-line with market expectations.  Hershey reaffirmed its FY CY2018 guidance of USD$5.33-5.43.  Hershey management highlights that gross margins contracts with higher freight and shopping costs -- Gross margins dropped to 44% vs. 45.3% a year ago.  Hershey mentions it remains committed to growing higher-margin product business and uses its USD$420mm acquisition of Pirate’s Booty maker B&G Foods as an example of its commitment.  Hershey is rated a “Top Buy” in both our US Large-Cap Global Top Stock Ideas and our US Consumer Staples Global Top Stock Ideas. 
  • Intel Corp (INTC) reports C3Q EPS that beat Street estimates as a surprise jump in PC demand boosted revenues for Intel chips.  Revenues from Intel’s PC-focused business grew 16% Y/Y.  Intel is the second large semiconductor maker in the world and its positive earnings should provide a boost to semiconductor stocks and the SOXX ETF.  Intel is rated “nEUTRAL” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Info Tech Global Top Stock Ideas.
  • International Consolidated Airlines Group (LN: IAG) is notifying customers that hackers stole private information from 77,000 payment card holders and an additional 108,000 card holders without CVV whose data may also have been compromised. The hacks reportedly occurred between April 21st, 2018 and July 28th, 2018. In total, 380,000 payment cards were targeted while 244,000 payment cards were actually affected. IAG is rated “Top Buy” in our United Kingdom All-Cap Global Top Stock Ideas and “Attractive” in our European Large-Cap Global Top Stock Ideas. 
  • Laboratory Corporation (LH) was downgraded from buy to hold by Canaccord Genuity while its price target was lowered from $195/share to $162/share. Recently, Laboratory Corporation cut its FY2018 EPS guidance from $11.35-$11.65 to $11.25-$11.45. Laboratory Corporation is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas. 
  • Lazard’s (LAZ) Chief Executive Officer, Ken Jacobs, said on the company’s earnings conference call that management would consider a sale of the firm’s $240bn asset-management division if the price was right. Jacobs’ comments come a couple weeks after OppenheimerFunds, a division of Massachusetts Mutual Life Insurance Co., sold to Invesco Ltd. (IVZ) for $5.7bn. Lazard is currently not rated in our Global Top Stock Ideas. 
  • Maple Leaf Foods Inc. (TSX: MFI) reports 3Q2018 earnings that missed expectations. Maple Leaf Foods’ top-line revenue fell 3.7% y/y to C$874.8mm, missing consensus which was at C$901.1mm. Maple Leaf Foods also missed on EPS, which was reported as C$0.29 compared to consensus of C$0.33. Maple Leaf Foods management attributed lower hog prices and high investments in its flagship brands as reasoning for the earnings miss. Maple Leaf Foods Inc. is not rated in our Global Top Stock Ideas.  
  • Merck (MRK) reports Adjusted C3Q EPS of USD$1.19 vs. Estimates of USD$1.14.  Merck management announces a share buyback plan of USD$10bn and boosts the quarterly dividend to USD$0.55 vs. estimates for USD$0.49.  Merck is rated “Neutral” in our US Large-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. 
  • Mediobanca Banca di Credito Finanziario (BIT: MB) beat consensus revenue estimates of 625.2mm euros after reporting F1Q2018 revenue of 637.7mm euros, up 6.5% y/y from 598.4mm euros. Despite growing revenue y/y, Mediobanca reports bottom-line net income y/y growth of –18.4% from 300.9mm euros in F1Q2017 to 245.4mm euros in F1Q2018 -- F1Q2018 net income still surpassed consensus estimates of $219.2mm euros. Mediobanca is rated “Neutral” in our European Large-Cap Global Top Stock Idea
  • Royal Caribbean Cruises (RCL) would be better served ignoring 3Q noises and focusing on the positive management commentary for CY2019 according Stifel analyst Steven Wieczynski.  Earlier this morning, Royal Caribbean Cruises reported C3Q results which were in-line with Street estimates and lower FY CY2018 guidance below Consensus (the upper range of FY CY2018 guidance is below the mean analyst estimate for CY2018).  Royal Caribbean Cruises is is rated “Neutral” in both our US Large-Cap and US Consumer Discretionary Global Top Stock Idea
  • Sherwin-Williams (SHW) announces 3Q2018 y/y revenue growth of 5% to $4,731.5mm which missed consensus estimates. Sherwin-Williams’ management also lowers 2018 adjusted EPS guidance from $19.05 to $19.20 per share. Management further detailed that 3Q2018 EPS was reduced by $0.16 per share due to costs to become the exclusive US supplier of interior and exterior paints for Lowe’s retail stores. Sherin-Williams is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.  
  • Southwest Airlines (LUV) reports C3Q results in-line with market expectations with better than expected revenues.  Southwest Airlines sees FY ASMS up close to 4%, slightly below Street forecasts.  Southwest Airlines is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and US Industrials Global Top Stock Ideas. 
  • Stanley Black & Decker (SWK) reports Adjusted 3Q EPS in-line with Street expectations though management lowers its FY CY2018 guidance below market estimates.  Stanley Black & Decker management announces a USD$250mm cost reduction program and an exclusive program with Home Depot (HD) where Home Depot will now be the exclusive home retailer for Stanley Black & Decker hand tools and store product portfolios starting in CY2019.  Stanley Black & Decker is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and US Industrials Global Top Stock Ideas. 
  • TAL Education (TAL) reports F2Q results which beat Street estimates but TAL Education’s guidance for F3Q weas lower than expected.  TAL Education announces of share buyback plan of USD$100mm.  TAL Education is rated “Neutral” 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.  C3Q 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. 
  • Twitter (TWTR) reports C3Q results which crush Street estimates as revenues came in above the highest estimates.  The only negative from the quarter is a lower than expected Monthly Average User (MAU) count which was related to Twitter’s decision to clean out Spam accounts – MAUs dropped by 9 million users to 326 million MAUs, the second straight quarter with declines in aggregate MAUs.  Twitter is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Info Tech Global Top Stock Ideas.
  • UBS Group (SWX:UBSG) reports C3Q results which were ahead of market expectations on the back of better than expected cost savings in its wealth management unit.  UBS management is targeting a 72% cost/income ratio and a return on CET1 capital of 15-17% for CY2020.  UBS is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Union Pacific Corp (UNP) reports C3Q earnings which are slightly ahead of Street estimates.  Union Pacific doesn’t see any signs of a slowdown in US growth though it expects CY2019 capex to be below 15% of sales.  Management sees 5-10% locomotive productivity gains in CY2019 which Union Pacific believes will translate to an improvement of USD$500mm in operating profit.  Union Pacific is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Valero Energy (VLO) reports Adjusted C3Q EPS of USD$2.01, beating the highest estimate.  C3Q refinery utilization was 99% for C3Q.  Valero is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. 
  • Xilinix (XLNX) reports F2Q results which blows out forecasts for the period and raises FY guidance well above Street estimates.  Guidance for F3Q sales was raised above the highest market estimate for the same period.  Xilinix is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and US Info Tech Global Top Stock Ideas. 
  • Western Digital (WDC) reports FY1Q2018 EPS of $3.04, matching consensus EPS of $3.04. While top-line revenue was on par with consensus estimates, Western Digital’s top-line revenue fell short of expectations as management reported FY1Q2018 revenue of $5bn compared to consensus of $5.14bn. Highlighting the earnings release was Western Digital’s surveillance hard drive sales and embedded flash solution revenue, both of which grew more than 30% y/y. Western Digital is rated “Attractive” in our US Information Technology Global Top Stock Ideas and “Neutral” in our US Large-Cap Global Top Stock Ideas. 
  • WPP PLC (LSE:WPP) reports C3Q results which misses Street estimates and lower FY CY2018 guidance.  Reported organic sales growth is –1.5% vs. expectations for +0.3%.  WPP management now see ZFY CY2018 organic sales down 0.5% to 1.0%.  WPP is rated “Neutral” in our UK All-Cap Global Top Stock Ideas. 

 

 

US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 2.43 basis points to 2.85%
  • US 5-Year Treasury Bonds are lower with yields up 3.85 basis points to 2.97%
  • US 10-Year Treasury Bonds are lower with yields up 3.02 basis points to 3.13%
  • The US Treasury 2s-5s Spread has widened 1.42 basis points to 0.12%
  • The US Treasury 2s-10s Spread has widened 0.59 basis points to 0.28%
  • US Treasury 5s-10s Spread has narrowed 0.83 basis points to 0.16%
     

Currencies

  • EUR€ is down 0.202% against the USD$ in after hours to 1.1369
  • GBP£ is down 0.512% against the USD$ in after hours to 1.2815
  • CHF is down 0.19% against the USD$ in after hours to 1.0002
  • JPY¥ is up 0.249% against the USD$ in after hours to 112.54

Commodities

  • WTI Crude is up 0.84% to USD$67.33/bbl with the Brent-WTI spread little changed USD$0.14 to USD$8.92/bbl
  • Gold is down -0.27% to USD$1230.49/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

On Mobile/Tablet scroll to the right.

Outperformers Sector Price 1D % Chg Volume
Twitter Inc Communication Services 31.8 15.21%          11,666,283
Xilinx Inc Information Technology 79.4 15.12%            2,463,799
International Paper Co Materials 43.8 11.19%            1,689,189
Ford Motor Co Consumer Discretionary 8.99 9.72%          22,878,878
Take-Two Interactive Software Inc Communication Services 120.70 8.96%            1,425,789
 
Underformers Sector Price 1D % Chg Volume
Align Technology Inc Health Care 232 -20.37%            2,438,140
Advanced Micro Devices Inc Information Technology 19.3 -16.24%          42,886,676
Equifax Inc Industrials 98.3 -14.26%                968,955
EQT Corp Energy 35.3 -13.45%            1,821,059
Southwest Airlines Co Industrials 49.9 -8.74%            3,672,021