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US stocks sink late day after attempting to rally back from morning losses; Nasdaq closes in corrective territory, S&P 500 closes just shy of 10% below September high

Oct 26, 2018

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US Markets End of Day Snapshot

  • US stocks traded lower in the morning, rallied back somewhat but lost steam late day with Nasdaq closing in corrective territory, S&P 500 closing just a touch shy of 10% below September's high
  • The S&P 500 finished down 1.73%, Nasdaq Composite is down 2.07%, and Russell 2000 is down 1.1%
  • Materials (-0.65%), Energy (-0.78%), and Industrials (-0.97%) stocks were the top performers in the S&P 500 today
  • Telecom (-2.4%), Real Estate (-2.59%), and Consumer Discretionary (-3.55%) 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 113 stocks reached 4-week lows
  • 1 stock in the S&P 500 closed overbought while 116 stocks closed oversold according to the 16-day RSI Measure
  • 17 stocks in the Nasdaq Composite hit 4-week highs while 432 stocks reached 4-week lows
  • 60 stocks in the Nasdaq Composite closed overbought while 650 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed down 0.06 points today  to 24.16 after closing at 24.22 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • 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.
  • Autoliv (ALV) reports interim C3Q sales slightly below market expectations.  Autoliv sees CY2018 operating margin at 10.5% vs. previous guidance of 11.0%.  Autoliv is not rated in our Global Top Stock Ideas.
  • BASF SE (DB:BAS) C3Q results which miss analyst expectations after a slowdown in global auto sales and higher raw material costs hit both top-line and profitability.  BASF is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Campbell Soup Company (CPB) is being accused by hedge fund and activist investor, Third Point LLC, for allegedly misleading investors about the competence of its directors and the method employed to carry out a strategic review. The lawsuit by Third Point represents the hedge fund’s most recent move in a proxy contest to replace Cambell’s 12-person board of directors with their own directors to spark growth in the soup and snack maker. A hearing is scheduled for Tuesday, October 30th, 2018. Cambell is rated “Neutral” in our US Consumer Staples Global Top Stock Ideas and “Unattractive” in our US Large-Cap Global Top Stock Ideas. 
  • Cabot Oil (COG) reports C3Q earnings which came in light vs. Consensus on weaker than expected revenues for the quarter.  Cabot Oil boosts its quarterly dividend 17%.  Cabot Oil is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Charter Communications Inc. (CHTR) shares have suffered their worst single-day decline in six months after the US cable operator’s earnings announcement paled in comparison to competitor, Comcast (CMCS.A). Charter reports CY3Q2018 y/y revenue growth of 4% to USD$10.89bn, falling short of consensus revenue estimates of USD$10.94bn. Comcast, meanwhile, posted CY3Q2018 earnings that surpassed expectations, sending Comcast shares higher. Charter is rated “Neutral” in both our US Large-Cap and US Consumer Discretionary Global Top Stock Ideas. Comcast is not rated in our Global Top Stock Ideas. 
  • Colgate-Palmolive (CL) disappointed investors with negative organic sales growth for the first time in 10 years after reporting CY3Q2018 earnings. Colgate reports CY3Q2018 EPS of USD$0.72/share in line with consensus EPS estimates USD$0.72/share. Consensus revenue estimates, however, called for CY3Q2018 sales of USD$3.89bn while Colgate reports sales of USD$3.85bn in CY3Q2018. Colgate is rated “Attractive” in our US Consumer Staples Global Top Stock Ideas and “Neutral” in our US Large-Cap Global Top Stock Ideas. 
  • Electrolux (OM: ELUX B) tumbled this morning after C3Q results miss consensus expectations as higher raw materials costs continue to pinch operating profitability.  North American sales were further hit on market-share losses to private label brands following the bankruptcy of Sears (SHLD).  Elextrolux is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Flex Ltd. (FLEX) shares plunged today after the company reported forecasts that disappointed, announced the end of its relationship with Nike, and said its CEO would retire.  Stifel wrote in a note that the slew of bad news from the company was “a messy situation”.  Flex cut 2019 revenue and EPS guidance, which led to multiple downgrades.  Flex is not rated in our Global Top Stock Ideas.
  • Glencore (LSE: GLEN) C3Q results miss expectations with own-source Copper output coming in at 1.06 million tons.  Glencore is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. 
  • Google (GOOG.L) reports C3Q EPS of USD$13.06 vs. Consensus of USD$10.40.  While earnings blew out estimates, Google’s revenues, ex TAC, came in slightly below expectations at USD$27.2bn.  Google average cost-per-click for C3Q dropped 28%.  Google is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Info Tech 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.
  • 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. 
  • Moody’s Corp (MCO) reports C3Q EPS of USD$1.69, missing market forecasts of USD$1.78.  FY Adjusted CY2018 is brought down to USD$7.50-7.65, below Street estimates if YSD$7.71.  Moody’s management sees restructuring charges of SUD$30 million to 40 million in C4Q.  Moody’s is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Mohawk Industries (MHK) reports earnings that disappointed investors, announcing CY3Q2018 adjusted EPS of USD$3.29 while consensus adjusted EPS estimates called for USD$3.58. Mohawk Industrie’s CY4Q2018 guidance also fell short of consensus, with management indicating CY4Q2018 adjusted EPS of between USD$2.45 and USD$2.60 while consensus adjusted EPS forecasts called for between USD$3.24 and USD$3.62. Mohawk Industries’ management announces a USD$500mm share buyback plan. Mohawk Industries is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Royal Bank of Scotland (LSE:RBS) reports it has set aside USD$128 million to reflect uncertainty around Brexit during C3Q.  Royal Bank of Scotland CEO Ross McEwan suggests large companies are pausing investment plans as the BREXIT talks drag on.  For the quarter, Royal Bank of Scotland reports net profit that is ahead of Street estimates with net interest margin (NIM) coming in at 1.93%.  Royal Bank of Scotland is rated “Neutral” in our UK All-Cap Global Top Stock Ideas. 
  • SEB SA (ENXTPA:SK) cut its FY CY2018 profit growth outlook on continued impact from FX volatility and weak retail sales (on account of disruption from eCommerce boom).  SEB sees FY CY2018 sales growth of ~8%.  SEB is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • Snap (SNAP) shares fell sharply today after results disappointed investors, especially its drop in daily users.  Snap was downgraded by JP Morgan today from underweight to neutral.  Snap had its price target cut to $6 from $12 as well.  Snap is rated ‘Top Short’ in our US Large-Cap Global Top Stock Ideas and ‘Neutral’ in our US Information Technology Global Top Stock Ideas.
  • Tenneco (TEN) reports all-time high revenue for CY3Q2018 of USD$2.37bn, up 4% y/y. Tenneco’s CY3Q2018 EPS is USD$1.15/share, down 26.7% y/y from USD$1.57/share in CY3Q2018. Tenneco also announces that it officially closed the acquisition of Federal0Modul LLC on October 1st, 2018. Tenneco is rated “Top Buy” in our US SMID-Cap Global Top Picks and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Tesla (TSLA) is seeing the investigation by the US Justice Department deepen, according to a report today in the Wall Street Journal.  Tesla is being investigated for potentially misstating information about Model 3 production and Tesla ex-employees have been contacted for information.  The Tesla criminal investigation heated up after the civil settlement by Tesla CEO Elon Musk.  Tesla is rated “Unattractive” in both our US Large-Cap and US Consumer
  • Total SA (ENXTPA:FP) C3Q come in ahead of Consensus estimates though management suggests it will keep spending restrained.  Total remains committed to improving efficiency and profitability as its looks to maintain its ability to weather the next downturn in global oil prices.  Total is rated “Attractive” in our European Large-Cap Global Top Stock Ideas. 
  • Valeo (ENXTPA:FR) is plunging in early morning trading following C3Q results which miss market expectations.  A slowdown in the China market and new rules on emissions testing hit Valeo results harder than management expected.  Valeo cuts its target FY CY2018 guidance to 6.2%-6.5%.  Valeo is rated “Neutral” in our European Large-Cap 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. 

 

US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -3.64 basis points to 2.81%
  • US 5-Year Treasury Bonds are higher with yields down -4.74 basis points to 2.91%
  • US 10-Year Treasury Bonds are higher with yields down -3.74 basis points to 3.07%
  • The US Treasury 2s-5s Spread has narrowed 1.1 basis points to 0.1%
  • The US Treasury 2s-10s Spread has narrowed 0.1 basis points to 0.27%
  • US Treasury 5s-10s Spread has widened 1 basis points to 0.17%
     

Currencies

  • EUR€ is up 0.299% against the USD$ in after hours to 1.1409
  • GBP£ is little changed 0.14% against the USD$ in after hours to 1.2835
  • CHF is up 0.25% against the USD$ in after hours to 1.003
  • JPY¥ is down 0.543% against the USD$ in after hours to 111.81

Commodities

  • WTI Crude is up 0.39% to USD$67.59/bbl with the Brent-WTI spread up USD$1.09 to USD$9.68/bbl
  • Gold is little changed 0.14% to USD$1233.94/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
Roper Technologies Inc Industrials 285 7.55%                337,062
Cabot Oil & Gas Corp Energy 22.9 7.10%            3,115,474
Cincinnati Financial Corp Financials 76.5 6.62%                618,839
ResMed Inc Health Care 104 5.69%                414,964
Lennar Corp Consumer Discretionary 41.79 3.98%            2,035,043
 
Underformers Sector Price 1D % Chg Volume
Mohawk Industries Inc Consumer Discretionary 115 -23.86%            1,008,124
Western Digital Corp Information Technology 44.2 -18.18%            7,348,915
SVB Financial Group Financials 232 -12.17%                860,723
Fortune Brands Home & Security Inc Industrials 41.6 -11.10%            1,189,787
Cerner Corp Health Care 55.6 -10.86%            2,377,110