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US stocks close mostly higher with tech shares losing ground today; risk-on sentiment buoyed by news Warren Buffet bought back almost USD$1 billion of stock

Nov 05, 2018

 

 

US Markets End of Day Snapshot

  • US stocks closed mostly higher with tech shares lagging once again, risk-on sentiment was buoyed by news that Warren Buffet bought back almost USD$1 billion of Berskshire Hathaway stock
  • The S&P 500 finished up 0.56%, Nasdaq Composite is down 0.38%, and Russell 2000 is down 0.03%
  • Real Estate (+1.69%), Energy (+1.61%), and Financials (+1.4%) stocks were the top performers in the S&P 500 today
  • Consumer Discretionary (-0.18%), Tech (-0.18%), and Telecom (-0.32%) 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 3.17x
  • 57 stocks in the S&P 500 hit 4-week highs while 22 stocks reached 4-week lows
  • 5 stocks in the S&P 500 closed overbought while 18 stocks closed oversold according to the 16-day RSI Measure
  • 52 stocks in the Nasdaq Composite hit 4-week highs while 123 stocks reached 4-week lows
  • 308 stocks in the Nasdaq Composite closed overbought while 148 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed up 0.49 points today to 19.96 after closing at 19.51 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Activision Blizzard (ATVI) is getting pounded on social media today with gamers complaining the most recent mobile offering, its “Diablo Immortal” game, has not met the expectations of players.   Activision Blizzard is being criticized for the game on a number of fronts and gamers have gone so far as to post a petition on line requesting the launch be cancelled, it has 31,000 signatures.  The hashtag #NotMyDiablo was created to call Activision Blizzard’s attention and the stock has suffered immensely today.  Activision Blizzard is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Alibaba (BABA) co-founder Jack Ma said the trade fight between the US and China is “senseless” as the conflict widens.  The Alibaba’s co-founder recently said he thought the conflict could last 2 decades and that it was pointless because the Asian nation is soon to become a major buyer of goods.  Alibaba is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Apple (AAPL) has cancelled plans for additional production lines for its budget iPhone XR model according to a report by Nikkei.  Apple now plans 20-25% less production of that model according to the report.  None of the Apple suppliers cited will be producing at full capacity and one will not produce any.  Apple increased its iPhone 8 and iPhone 8Plus models by 5mn units to 25mn total.  Apple is rated “Attractive” on both our US Large-Cap and US Information Technology Global Top Stock Ideas.
  • Berkshire Hathaway (BRK/A) CEO Warren Buffet used part if the cash pile the company has to buy back shares with an uptick in the 3Q.  Berkshire Hathaway spent USD$928mn in August to buy back shares while the company has over USD$100 billion in cash on its books.   Berkshire Hathaway is not rated in our Global Top Stock Ideas.
  • Builders FirstSource Inc. (BLDR) shares are falling the most in intraday trading since December 2015 after Sun Trust lowered its price target from USD$25/share to USD$17/share and Evercore ISI downgraded the stock to underperform from in line. Trading volume for BLDR shares was 11x its 20-day average. Builders FirstSource is rated “Attractive” in both our US SMID-Cap and US Industrials Global Top Stock Ideas. 
  • Capital & Counties Properties Plc (LSE: CAPC) shares are trading higher as reports are indicating that CK Asset Holdings Ltd. (SEHK: 1113) is in talks to buy Capital & Counties’ Earls Court project. Capital & Counties shareholders are interpreting this as an indicator of confidence in London’s luxury-housing market. Capital & Counties’ Earls Court project is valued at USD$920mm after a series of writedowns over the last three years. Capital & Counties is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas and CK Asset Holdings is rated “Attractive” in our China All-Cap Global Top Stock Ideas. 
  • Ceragon (CRNT) is seeing its shares rise after reporting CY3Q2018 y/y revenue growth of 13.9% to USD$86.5mm while consensus estimates called for USD$82.3mm. Ceragon’s bottom-line adjusted EPS in CY3Q2018 came in at USD$0.07/share while consensus estimates called for USD$0.04/share. Ceragon is not rated in our Global Top Stock Ideas.  
  • Chevron (CVX) shares were upgraded from neutral to outperform at Credit Suisse with its price target of USD$138 being reiterated. In a published note on Chevron, Credit Suisse cited that it sees upside in Chevron’s 2019-2020 volume forecasts that is supported by strong Permian growth. Chevron is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
  • Dufry (DUFN SW) cut its full year forecast after a disappointing 3Q in Spain and Latin America.  Dufry cut its organic growth forecast to 2-3% down from 5-7% previously.  Dufry saw a less favorable mix of tourists in Spain and currency turbulence in Brazil and Argentina.  Dufry is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Eli Lilly’s (LLY) Trulicity posted solid results in the most recent outcomes survey, one in which expectations were low.  Blomberg Intelligence highlights the potential for the results to help Eli Lilly challenge Novo Nordisk (CPSE: NOVOB) and its Ozempic, the leading diabetes drug today.  Analysts comments noted Eli Lilly could see additional adoption with these most recent results and generally see the news as bullish for Eli Lilly.  Eli Lilly is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Novo Nordisk is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • FedEx (FDX) will hike prices and average of 4.9% in January, a hike more than twice the rate of inflation.  FedEx will hike freight rates 5.9%, FedEx Express 4.9% and other products less.  FedEx is hiking the same as it did last January when it also hiked rated an average of 4.9%.  FedEx is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Grenke AG (XTRA GLJ) shares are falling after the Sebastian Hirsch, a member of Grenke’s Board of Directors, said in an interview with Bloomberg that the company will not be able to sustain high growth rates of more than 20% observed in its core business. Hirsch pulled-back growth forecasts, projecting growth rates between 14% and 16% over the next 2-3 years while forecasting 12% growth in the long-term. Grenke is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.  
  • Icelandair Group HF (ICSE: ICEAIR) shares are soaring after an unexpected agreement was reached to buy discount-airline rival, Wow Air. Both of these companies are Icelandic airlines that have sustained significant financial hardships in recent years. Both airlines have suffered due to higher oil prices, the introduction of low-cost trans-Atlantic airlines, slumping tourism to Iceland. Icelandair is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas. 
  • Pandora (PNDORA DC) shares are trading lower ahead of its CY3Q2018 earnings release tomorrow as investors fear a weak earnings announcement. Ole Kjaer Jensen, head of share trading at Sydbank, said, “The market is expecting the 3Q numbers to be weak, so there may be people who are taing last-minute decisions to pull out,” adding, “there has also been takeover speculation on Pandora in recent months and maybe investors are pulling out ahead of the earnings,”. Pandora is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Siemens Healthineers (SHL GR) reported 4Q adjusted net of 430n euros while the company guidance was for 435mn euros.  Siemens Healthineers reported 4Q adjusted profit of 674mn euros while company guidance was for 668mn euros.  Siemens Healthineers expects 2019 EPS to come 20-30% above previous year.  Siemens Healthineers is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Softbank (9984 JP) reported profit that well exceeded analysts’ expectations.  Softbank reported 2Q profit of 706 billion yen, far above any expectation of analysts as the results of its tech investments begin to bear fruit.  Softbank’s CEO said next year “I believe we will not only exceed these results but may deliver results on a level Japan has never seen before”.  Softbank is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas.
  • Spotify (SPOT) announced a USD$1 billion share buyback plan today.  Spotify made the announcement days after disappointing investors with its 3Q results.  A Bloomberg article today highlighted the unusual situation of having a company with free cash flow of only 33 million euros launching a USD$ 1billion share buyback.  Spotify made the present buyback program valid until April 2021.  Spotify is not rated in our Global Top Stock Ideas. 
  • STMicroelectronics (SMT IM) announced a share buyback program of up to USD$750mn.  STMicroelectronics will have its program in place for up to 3 years.  STMicroelectronics will place any stock bought into its treasury.  STMicroelectronics will pay at least 1.04 euros for any shares bought back.  STMicroelectronics is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Subaru (7270 JP) cut is full year forecast for operating profit by 27% in the wake of expanding its car recall.  Subaru is recalling vehicles due to flaws in its inspection process.  Subaru now expects to report a profit of 220 billion yen compared to consensus of 347.4 billion yen.  Subaru is not rated on our Global Top Stock Ideas.
  • Sysco (SYY) shares are tumbling after reporting FY1Q2019 adjusted EPS of USD$0.91/shares while consensus adjusted EPS estimates called for USD$0.92. Sysco’s FY1Q2019 total revenue of USD$15.22bn was also short of consensus revenue estimates of USD$15.39bn. Sysco underwent “expense challenges” during their most recent quarter, which caused the firm’s FY1Q2019 adjusted operating income to miss consensus estimates of USD$734.3mm, reporting adjusted operating income of USD$691.7mm. Sysco is rated “Attractive” in both our US Large-Cap and US Consumer Staples Global Top Stock Ideas.
  • Tata Motors (TTMT IN) has been placed on “CreditWatch” by S&P.  Tata Motors could see its credit metrics worsen near term given recent results that were weaker than expected.  Tata Motors “is likely to miss our expectations for 2019” S&P said.  Tata Motors is not rated in our Global Top Stock Ideas.

 

US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 0.41 basis points to 2.90%
  • US 5-Year Treasury Bonds are higher with yields down -0.84 basis points to 3.02%
  • US 10-Year Treasury Bonds are higher with yields down -1.32 basis points to 3.19%
  • The US Treasury 2s-5s Spread has narrowed 1.25 basis points to 0.12%
  • The US Treasury 2s-10s Spread has narrowed 1.73 basis points to 0.29%
  • US Treasury 5s-10s Spread has narrowed 0.48 basis points to 0.17%

Currencies

  • EUR€ is up 0.167% against the USD$ in after hours to 1.1407
  • GBP£ is up 0.555% against the USD$ in after hours to 1.3042
  • CHF is little changed 0.1% against the USD$ in after hours to 0.9957
  • JPY¥ is little changed 0.009% against the USD$ in after hours to 113.21

Commodities

  • WTI Crude is little changed -0.06% to USD$63.1/bbl with the Brent-WTI spread up USD$0.27 to USD$9.02/bbl
  • Gold is little changed -0.13% to USD$1231.35/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
EQT Corp Energy 35.4 8.34%                808,800
Cabot Oil & Gas Corp Energy 26 5.89%            2,227,853
Loews Corp Financials 48.8 5.42%                721,188
Newell Brands Inc Consumer Discretionary 19.97 5.16%            1,996,160
Berkshire Hathaway Inc Financials 216.24 4.68%            1,859,051
 
Underperformers Sector Price 1D % Chg Volume
Sysco Corp Consumer Staples 64.6 -9.44%            1,866,276
Activision Blizzard Inc Communication Services 64.3 -6.74%            4,777,176
Qorvo Inc Information Technology 69.3 -6.32%                802,466
Aptiv PLC Consumer Discretionary 76.1 -4.23%                552,118
Akamai Technologies Inc Information Technology 69 -3.92%            1,055,893