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US stocks shake off trade and growth concerns, focus instead on strong earnings from Under Armour and Take-Two Interactive as markets rise

Oct 30, 2018

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US Market Snapshot

  • US stocks shake off trade and growth concerns and focus instead on strong earnings from Under Armour and Take-Two Interactive with markets rising through morning session
  • The S&P 500 is currently up 0.72%, Nasdaq Composite is up 0.85%, and Russell 2000 is up 1.62%
  • Real Estate (+1.99%), Telecom (+1.57%), and Materials (+1.08%) stocks are the top performers in the S&P 500 today
  • Tech (+0.42%), Financials (+0.25%), and Utilities (-0.74%) stocks are the worst performers in the S&P 500 today
  • Investor sentiment for US stocks is positive with the advance/decline ratio for the S&P 500 currently at 3.5x
  • 22 stocks in the S&P500 are at 4-week highs while 162 stocks are at 4-week lows
  • 1 stock in the S&P 500 is overbought while 138 stocks are oversold according to the 16-day RSI Measure
  • 26 stocks in the Nasdaq Composite are at 4-week highs while 500 stocks are at 4-week lows
  • 92 stocks in the Nasdaq Composite are overbought while 712 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently moving higher at 24.81 from yesterday's close of 24.7

Stocks Trending in the News

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  • Allergan (AGN) reports CY3Q2018 earnings that beat analyst estimates, announcing quarterly adjusted EPS of USD$4.25/share while consensus estimates called for USD$4.05/share. Allergan’s top-line revenue slightly beat consensus estimates of USD$3.89bn, reporting CY3Q2018 revenue of USD$3.91bn. Allergan also upped its FY2018 adjusted EPS guidance from between USD$16.00 and USD$16.50 to between USD$16.20 and USD$16.60. Allergan is not rated in our Global Top Stock Ideas.  
  • Brinker International (EAT) announces mixed FY1Q2019 earnings, reporting quarterly EPS of USD$0.47 while analysts expected EPS of USD$0.45. Brinker International managed to grow top-line revenue in FY1Q2019 by 1.9% y/y to USD$753.8mm from USD$739.4mm last year. Brinker International’s operating margin fell 130 bps to 11.1% while operating income rose from 3.9% a year ago to 6.2% in FY1Q2019. Brinker is rated “Attractive” in our US Consumer Discretionary Global Top Stock Ideas and “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Chesapeake Energy Corporation (CHK) is agreeing to buy WildHorse Resource Development Corporation (WRD) for USD$2.27bn. As part of the acquisition, Chesapeake will assume WildHorse’s net debt of USD$930mm. In a statement announcing the acquisition, Chesapeake detailed that the purchase of WildHorse will enable the natural gas producer to double its oil production by 2020. Chesapeake and WildHorse are both rated “Top Short” in our US Large-Cap Global Top Stock Ideas.  
  • Coca-Cola (KO) announces earnings Tuesday morning that beat estimates, reporting CY3Q2018 adjusted EPS of USD$0.58 that surpasses consensus adjusted EPS expectations of USD$0.55. Coca-Cola's top-line revenue is reported as USD$8.25bn for CY3Q2018 while consensus revenue expectations called for USD$8.17bn. Double-digit growth in the company’s Coca-Cola Zero Sugar product drove net income growth of 30% y/y in CY3Q2018 for Coca-Cola. Coca-Cola is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Cognizant Technology (CTSH) reports CY4Q2018 guidance below analyst expectations, expecting CY4Q2018 revenue of between USD$4.09bn and USD$4.13bn while analysts expect CY4Q2018 revenue of USD$4.17bn. Cognizant also reports CY4Q2018 EPS guidance of USD$1.05/share while analysts expect USD$1.14/share. Cognizant declares a CY3Q2018 dividend of USD$0.20/share, representing a 1.16% dividend yield that falls in-line with historical dividends. Cognizant is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • General Electric (GE) is cutting its dividend to 1 cent per share from 12 cents per share while taking a USD$22 billion goodwill charge.  General Electric will reorganize its power unit into 2 units.  General Electric reported 3Q EPS of 14 cents while consensus was for 20 cents.  General Electric is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and ‘Neutral’ in our US Industrials Global Top Stock Ideas.   
  • Mondelez (MDLZ) announces FY3Q2018 adjusted earnings of USD$1.19 billion, equating to USD$0.81/share while consensus adjusted EPS called for USD$0.57. Despite beating adjusted EPS estimates, Mondelez’s FY3Q2018 revenue fell 3.5% y/y to USD$6.3bn, missing consensus revenue estimates by USD$20mm. Mondelez is rated “Neutral” in both our US Large-Cap and US Consumer Staples Global Top Stock Ideas.
  • Pfizer (PFE) narrowed its full year guidance as its older drugs struggle.  Pfizer narrowed guidance even as beating 3Q estimates.  Pfizer now sees full year revenue of USD$53-53.7 billion, tighter than previous USD$53-55 billion.  Pfizer has returned USD$15 billion back to shareholders via dividends and share buybacks, with USD$3 billion more planned this year.  Pfizer is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Take Two Interactive Software (TTWO) shares are largely higher after initial sales of its Red Dead Redemption 2 video game exceeded analyst expectations. Piper Jaffray forecasted Red Dead Redemption 2 to sell between USD$400mm and USD$500mm in its first three days -- Take Two blew past that figure, reporting sales of USD$725mm in the game’s first three days. Take Two is rated “Unattractive” in both our US Large-Cap and US Information Technology Global Top Stock Ideas.
  • Under Armour Inc. (UAA) is posting its largest intraday gain since October 2008 after reporting CY3Q2018 earnings that largely surpassed analyst expectations. Under Armour reports CY3Q2018 adjusted EPS of USD$025 while analyst consensus EPS estimates called for USD$0.13. Under Armour’s top-line revenue of USD$1.44bn in CY3Q2018 also beat consensus estimates of USD$1.32bn. Under Armour is rated “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas and “Top Short” in our US Large-Cap Global Top Stock Ideas.  
  • WellCare Health Plans (WCG) reports CY3Q2018 EPS of USD$2.70 that beats consensus EPS estimates of USD$2.93. WellCare’s CY3Q2018 revenue grew 15% y/y to USD$5.06bn, surpassing consensus revenue estimates by USD$10mm. WellCare is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
  • WH Smith (SMWH) agreed to buy InMotion, a seller of electronic accessories in US airports.  WH Smith is paying USD$198mn for the company as it sees to expand beyond its traditional UK retails business.  WH Smith is focusing on selling in transportation hubs where there is less competition from online sales.  WH Smith is rated “Attractive” in our UK All-Cap Global Top Stock Ideas.

US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 2.22 basis points to 2.8386%
  • US 5-Year Treasury Bonds are lower with yields up 1.52 basis points to 2.9342%
  • US 10-Year Treasury Bonds are lower with yields up 1.89 basis points to 3.1038%
  • The US Treasury 2s-5s Spread has narrowed 0.7 basis points to 0.1%
  • The US Treasury 2s-10s Spread has narrowed 0.33 basis points to 0.27%
  • US Treasury 5s-10s Spread has widened 0.37 basis points to 0.17%

Currencies

  • EUR€ is currently little changed against the USD$ at 1.1363
  • GBP£ is currently down 0.555% against the USD$ to 1.2722
  • CHF is currently down 0.2% against the USD$ to 0.996
  • JPY¥ is currently up 0.392% against the USD$ to 112.81

Commodities

  • WTI Crude is currently down -1.1% to USD$66.3/bbl with the Brent-WTI spread little changed USD$0.12 to USD$9.26/bbl
  • Gold is currently down -0.51% to USD$1223.18/oz

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

S&P 500 Sector ETFs - Intraday

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

Russell 1000 Factor ETFs - Intraday

*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
Under Armour Inc Class A Consumer Discretionary 23.1 26.88%            2,767,088
Under Armour Inc Class C Consumer Discretionary 21 24.93%            1,409,592
Akamai Technologies Inc Information Technology 71.9 15.81%            1,169,870
Vulcan Materials Co Materials 94.4 12.00%                307,806
Take-Two Interactive Software Inc Communication Services 122.86 9.98%            1,166,645
 
Underperformers Sector Price 1D % Chg Volume
FLIR Systems Inc Information Technology 45.7 -14.43%                366,765
General Electric Co Industrials 10.2 -8.51%          22,129,121
Allergan PLC Health Care 162 -6.73%                478,426
Incyte Corp Health Care 60 -5.26%                520,861
Cognizant Technology Solutions Corp Information Technology 66.4 -4.10%            1,013,631