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US stocks surge led by tech shares; strong private employment data fuels bullish sentiment

Oct 31, 2018

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US Markets End of Day Snapshot

  • US stocks surged today as strong private employment data fueled optimism -- ADP reports that 227k new jobs were added to the Private Sector for the month of October vs. expectations for +187k
  • The S&P 500 finished up 1.08%, Nasdaq Composite up 2.01%, and Russell 2000 up 0.32%
  • Tech (+2.39%), Telecom (+2.1%), and Consumer Discretionary (+1.63%) stocks were the top performers in the S&P 500 today
  • Consumer Staples (-0.86%), Utilities (-1.15%), and Real Estate (-1.37%) 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 1.66x
  • 53 stocks in the S&P 500 hit 4-week highs while 53 stocks reached 4-week lows
  • 8 stocks in the S&P 500 closed overbought while 73 stocks closed oversold according to the 16-day RSI Measure
  • 31 stocks in the Nasdaq Composite hit 4-week highs while 339 stocks reached 4-week lows
  • 105 stocks in the Nasdaq Composite closed overbought while 493 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed  down -11.57 points today  to 11.78 after closing at 23.35 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • AbbVie (ABBV) shares suffered today after Novartis (NOVN LN) received FDA approval for a biosimilar drug to compete with AbbVie’s Humira.  Humira is the world’s best-selling drug with USD$20 billion in sales expected of it for AbbVie this year.  There are other approved biosimilars, but none have yet reached the market to compete with AbbVie’s Humira sales.  AbbVie rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  Novartis is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.
  • Airbus (AIR FP) saw earnings before interest, tax and one-time items climb to 1.58 billion euros, which came ahead of 1.4 billon euros expected.  Airbus maintained its 800 aircraft delivery guidance for the full year.  Airbus is struggling with production challenges with jet engines problems.  Airbus maintained its ebit forecast of about 5 billion euro.  Airbus is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Automatic Data Processing (ADP) reports FY1Q2019 revenue of USD$3.32bn that tops consensus estimates of USD$3.28bn. ADP also beat consensus EPS estimates in FY1Q2019, reporting quarterly EPS of USD$1.20 while consensus EPS estimates called for USD$1.11. ADP raised its FY2019 adjusted EPS growth guidance from between 13% and 15% to between 15% and 17%. ADP is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Baidu (BIDU) provided guidance that was below consensus.  Baidu expects revenue to come in 4Q 25.48-26.72 billion yuan.  Presently consensus is for 27.8 billion yuan.  3Q revenue of 28.2 billion yuan came above consensus.  Baidu is seeing a challenging ad environment as newcomers vie for a piece of Baidu’s ad business.  Baidu is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Banco Santander, S.A. (BME: SAN) surprised investors after reporting CY3Q2018 financial results that detail stronger core capital levels. Banco Santander’s CY3Q2018 quarterly grew to 526mm euros driven by gains in bond trading as well as lower costs. Banco Santander is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Baxter International, Inc. (BAX) lowers its CY4Q2018 adjusted EPS guidance to between USD$0.71/share and USD$0.73/share while analyst estimates range between USD$0.76/share and USD$0.81/share. Baxter reports CY3Q2018 adjusted EPS from continuing operations of USD$0.80/share that exceeds consensus estimates of USD$0.74/share. Baxter is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • Bunge (BG) agrees to the demands of activist investors to study ways to generate shareholder value in the wake continued weak performance.  Bunge also lowered full year guidance for earnings before interest and taxes to USD$1.2 billion from USD$1.3 billion.  Bunge delivered 3Q EPS of USD$2.52 while USD$2.37 was expected, a rare bright spot.   Bunge will study all options, including the potential sale of the company.; a committee will analyze options.  Bunge is rated “Neutral” in both our US Large-Cap and US Consumer Staples Global Top Stock Ideas.
  • Computacenter (LSE: CCC) shares are seeing their largest decline since 2005 after the company announced that CY3Q2018 revenue fell 3% y/y to GBP900mm. Computacenter reported that its group technology revenue in CY3Q2018 grew by 1% y/y in constant currency, however, the firm's group technology sourcing revenue fell by 5% y/y in constant currency, driving the overall revenue decline. Computacenter is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Clorox (CLX) reports FY1Q2019 earnings that surpass expectations, however, management cut FY2019 guidance. Clorox delivers FY1Q2019 total sales of USD$1.56bn that beat consensus revenue expectations of USD$1.54bn. Clorox management lowered its FY2019 EPS outlook from between USD$6.32 and USD$6.52 to between USD$6.20 and USD$6.40. Clorox is rated “Top Buy” in our US Consumer Staples Global Top Stock Ideas and “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Electronic Arts (EA) shares are sliding after management pulled-back FY2019 adjusted EPS guidance from USD4.85/share to USD$4.50/share. EA’s FY2Q2019 earnings were a different story, as the firm reported FY2Q2019 adjusted EPS of USD$0.88/share while consensus adjusted EPS estimates called for USD$0.58/share. EA’s FY2Q2019 top-line revenue of USD$1.22bn is slightly above consensus revenue estimates of USD$1.19bn. EA is rated “Neutral” in our US Information Technology Global Top Stock Ideas and “Unattractive” in our US Large-Cap Global Top Stock Ideas
  • Estee Lauder (EL) reports FY2Q2019 adjusted EPS guidance of between USD$1.47 and USD$1.50, missing the lowest analyst FY2Q2019 adjusted EPS estimates, which range between USD$1.56 and USD$1.74. Estee Lauder’s FY1Q2019 adjusted EPS of USD$1.47 largely exceeds consensus FY1Q2019 adjusted EPS forecasts, which called for USD$1.22/share. Estee Lauder also issues a dividend of USD$0.43/share and announces of a 40 million share repurchase plan. Estee Lauder is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Stapes Global Top Stock Ideas. 
  • Eutelsat (ENXTPA: ETL) shares are plunging the most in 5 months after the firm cut its full-year sales guidance. Although Deutsche Bank, who maintains a ‘sell’ recommendation on Eutelsat, said the cut was expected, it was reportedly one that came from, “an unexpected source.” Altogether, Eutelsat cut its full-year sales guidance by roughly 3%. Eutelsat is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.  
  • Facebook (FB) reported 3Q results above expectations with revenue jumping 33% to USD$13.73 billion.  Facebook saw 2.27 billion monthly active users in 3Q.  3Q EPS of USD$1.76 came well above USD$1.47 expected.   Facebook outlined further focus on “stories” and videos via Instagram for the future as change roils the social network.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • General Electric (GE) had its debt rating cut to Baa1 by Moosy’s, three notches above junk.  Moody’s joined S&P in lowering General Electric’s rating.    Moody’s cites “misjudgment of financial prospects and operational missteps” in reason for the downgrade, with problems especially acute at its Power unit.  General Electric is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and US Industrials Global Top Stock Ideas.
  • General Motors Company (GM) shares are soaring after the company reported earnings pre-market that largely exceed analyst expectations. General Motors saw its CY3Q2018 adjusted profit rise to USD$1.87/share while consensus estimates forecasted USD$1.25/share.  General Motor’s quarterly revenue in CY3Q2018 grew 6.4% y/y to USD$35.8bn. General Motors’ earnings beat was driven largely by a 33% y/y increase in pretax profit to USD$2.8bn in the company’s North America region. General Motors is rated “Neutral” in our US Consumer Discretionary Global Top Stock Ideas and “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Intercontinental Exchange (ICE) announces CY3Q2018 adjusted EPS of USD$0.85/share that beat the highest analyst estimates, which ranged between USD$0.79/share and USD$0.81/share. Intercontinental Exchange’s CY3Q2018 operating income of USD602mm is well below analyst consensus forecasts of USD$674.2mm, however. Intercontinental Exchange is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Kellogg Company (K) is seeing its largest price drop in 18 years after the company slashed its profit forecast and announced a decline in its US snack foods business. Kellogg cut its adjusted EPS growth forecast for CY2018 to between 7% and 8% from a prior forecast of between 11% to 13%. Kellogg’s US snacks unit saw its sales fall 3.5% y/y in CY3Q2018 to USD$737mm. Kellogg is rated “Top Buy” in our US Consumer Stapes Global Top Stock Ideas and “Neutral” in our US Large-Cap Global Top Stock Ideas. 
  • L’Oreal S.A. (ENXTPA: OR) shares are posting their largest intraday gains in more than a year after the company announced positive CY3Q2018 earnings. L’Oreal’s luxury division saw total sales grow 16% y/y to 6.47bn euros while consensus sales forecast called for 6.34bn euros. L’Oreal is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Maxar Technologies (MAXR) shares are plummeting after the firm announced CY3Q2018 adjusted EPS of USD$0.75/share, missing consensus adjusted EPS estimates of USD$1.02 and falling short of the lowest analyst EPS estimate of USD$0.82. Maxar’s CY3Q2018 revenue of USD$508mm comes in well below consensus revenue estimates of USD$534.4mm. Maxar Technologies is not rated in our Global Top Stock Ideas.
  • McDermott International, Inc. (MDR) shares are tanking after the company cut value forecasts for some projects, announced the sale of assets in order to reduce debt, and planned to sell USD$300mm in preferred stock. McDermott announced plans to sell USD$300mm of 12% preferred stock to investment funds managed by Goldman Sachs, the proceeds of which will be used for, “general corporate purposes.” McDermott also reported underwhelming CY3Q2018 profit while cutting the estimated value of its Cameron LNG, Freeport LNG, and Calpine projects by USD$744mm. McDermott is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
  • Molson Coors Brewing Company (TAP) shares are trading higher after reporting strong quarterly earnings that were driven by strong international growth. Molson Coors reports CY3Q2018 underlying EPS of USD$1.84 while consensus EPS forecasts called for USD$1.60/share. Worldwide beer volume in CY3Q2018 increased by 25.3mm hectoliters while Molson Coors’ management upped its target cost saving for 2017-19 to USD$700mm from USD$600mm. Molson Coors is rated “Top Buy” in both our US Large-Cap and US Consumer Discretionary Global Top Stock Ideas.
  • Nokian Renkaat OYJ (FH: NRE1V) shares are down today after reporting CY3Q2018 net sales of 356.9mm euros, missing the lowest analyst estimate of 371.0mm euros and consensus estimates of 382.2mm euros. Nokian Renkaat’s EBIT margin in CY3Q2018 weakened to 24.1% from 24.7% a year before. Nokian Renkaat is rated “Top Buy” in our European SMID-Cap Global Top Stock Ideas.
  • Qualcomm (QCOM) had its stock downgraded by Bank of America Merrill Lynch today.  Qualcomm lowered to neutral from buy.   Bank of America Merrill Lynch cut Qualcomm’s target to USD$70 from USD$75.  Qualcomm was downgraded ahead of earnings to be published November 7th.  Qualcomm is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Sanofi (SAN FP) reported 3Q results above expectations.  Sanofi reported 3Q EPS of 1.84 euros while 1.70 was expected.  Sanofi revenue in 3Q of 9.39 billion euros versus 9.26 billion expected.   Sanofi expects EPD growth of 4-5% up from 3-5%.  Sanofi is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Sydbank A/S (CPSE: SYDB) shares are falling the most in a decade after the firm cut its full-year net income guidance. Sydbank management pulled-back full-year net income guidance from between 1.34bn kroner and 1.54bn kroner to between 1.25bn kroner and 1.325bn kroner. Sybank also missed CY3Q2018 revenue estimates, citing a tough banking market environment in Denmark. Sydbank is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.  
  • YUM! Brands, Inc. (YUM) announces CY3Q2018 adjusted EPS that blows past analyst estimates, reporting quarterly EPS of USD$1.04/share while consensus called for USD$0.85/share. Yum! Brands’ CY3Q2018 top-line revenue was in line with consensus estimates of USD$1.38bn with quarterly revenue of USD$1.39bn. Comparable y/y sales growth of 3% and 5% for KFC and Tacobell, respectively, were the largest drivers of Yum! Brands’ quarterly EPS beat. Yum! Brands is rated “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas and “Neutral” in our US Large-Cap Global Top Stock Ideas.

 

US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 2.22 basis points to 2.87%
  • US 5-Year Treasury Bonds are lower with yields up 2.55 basis points to 2.98%
  • US 10-Year Treasury Bonds are lower with yields up 2.65 basis points to 3.14%
  • The US Treasury 2s-5s Spread has widened 0.33 basis points to 0.11%
  • The US Treasury 2s-10s Spread has widened 0.43 basis points to 0.28%
  • US Treasury 5s-10s Spread has widened 0.1 basis points to 0.17%
     

Currencies

  • EUR€ is down 0.194% against the USD$ in after hours to 1.1323
  • GBP£ is up 0.519% against the USD$ in after hours to 1.2772
  • CHF is down 0.281% against the USD$ in after hours to 0.9921
  • JPY¥ is down 0.239% against the USD$ in after hours to 112.86

Commodities

  • WTI Crude is down -1.31% to USD$65.31/bbl with the Brent-WTI spread down USD$-0.99 to USD$8.65/bbl
  • Gold is down -0.53% to USD$1216.39/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
Molson Coors Brewing Co Consumer Staples 64 9.95%            1,505,386
General Motors Co Consumer Discretionary 36.6 9.09%            7,466,197
FleetCor Technologies Inc Information Technology 200 7.98%                292,279
HollyFrontier Corp Energy 67.44 6.61%            1,161,924
Varian Medical Systems Inc Health Care 119.37 6.38%                639,111
 
Underperformers Sector Price 1D % Chg Volume
Baxter International Inc Health Care 62.5 -8.96%            1,838,760
Kellogg Co Consumer Staples 65.5 -8.88%            1,355,574
IPG Photonics Corp Information Technology 134 -5.82%                511,850
Anadarko Petroleum Corp Energy 53.2 -5.76%            1,904,896
Under Armour Inc Consumer Discretionary 19.8 -5.53%            1,804,493