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US stocks soar on election results led by tech sector, closing with strong gains across the board; renewed confidence brought appetite for riskier assets

Nov 07, 2018

 

 

US Markets End of Day Snapshot

  • US stocks soar on election results led by tech sector, closing with strong gains across the board; renewed confidence in the markets with a coming divided Congress brought appetite for riskier assets, fueling Nasdaq's 2.64% gain
  • The S&P 500 finished up 1.95%, Nasdaq Composite up 2.64%, and Russell 2000 up 1.43%
  • Consumer Discretionary (+3.12%), Healthcare (+2.94%), and Tech (+2.88%) stocks were the top performers in the S&P 500 today
  • Real Estate (+1.14%), Utilities (+1.08%), and Consumer Staples (+0.56%) 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 7.2x
  • 66 stocks in the S&P 500 hit 4-week highs while 7 stocks reached 4-week lows
  • 14 stocks in the S&P 500 closed overbought while 8 stocks closed oversold according to the 16-day RSI Measure
  • 69 stocks in the Nasdaq Composite hit 4-week highs while 108 stocks reached 4-week lows
  • 266 stocks in the Nasdaq Composite closed overbought while 174 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed down 3.55 points today to 16.36 after closing at 19.91 yesterday
     

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Adidas (ADS GR) lowered its sales guidance for full year to 8-9% growth, down from ~10% previously.  While lowering growth guidance, margin guidance was raised by Adidas.  Adidas expects net income will rise up to 20%, 3 percentage points more than previously indicated.  Adidas saw weakness in sales in Western Europe, falling 1%, and had strong inventory control in North America.  Adidas’ online sales grew 52% but are only 7% of sales.  Adidas is rated “Attractive” in our European Large-Cap Global Top Stock Ideas. 
  • Amadeus IT (BME: AMS) shares are trading lower after the company reported its 9-month financials this morning. Amadeus announced 9-month EBITDA of 1.59bn euros, up 8.16% y/y from 1.47bn euros. Amadeus’ 9-month EBITDA margin comes in as 43.1% compared to 39.8% a year ago. Amadeus is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.  
  • Apple (AAPL) is not in settlement talks with Qualcomm (QCOM) according to a report from Reuters today.  The report discussing Apple and Qualcomm cites an unidentified source in its reporting.  Apple is preparing to go to trial against Qualcomm, the supplier of chips for its phones for years, alleging that its practice of taking a cut of the selling price of a phone as its patent fee is illegal.  Qualcomm is countersuing alleging Apple owes it USD$7 billion in unpaid royalties.  Apple is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Qualcomm is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Bayerische Motoren Werke Aktiengesellschaft (DB: BMW) shares are down after reporting CY3Q2018 earnings that miss average analyst expectations. BMW reports CY3Q2018 EBIT of 1.75bn euros while consensus estimates called for 1.91bn euros. BMW’s top-line sales managed to surpass expectations, reporting CY3Q2018 revenue of 24.74bn euros while consensus revenue estimates called for 23.59bn euros. BMW is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Boeing (BA) has issued a warning to pilots in the wake of the recent 737 Max jet crash.  Boeing is advising pilots how to deal with potential malfunction of a sensor while flying.  Boeing’s advisory reminds pilots how to deal with faulty information from its angle of attack sensor, which is being implicated in the recent crash.   Boeing is basing this advisory on preliminary data from the crash and has not yet reached a final conclusion.  Boeing is rated “Attractive” in both our US Large-Cap and US Industrials Global Top Stock Ideas. 
  • CME Group (CME) announced it is moving Europe’s largest market for short term financing out of London ahead of Brexit.  CME Group wants to guarantee that continental firms will have access to the market in the event there is no Brexit deal.  CME Group will move the BrokerTec business, as it is known, to Amsterdam.   CME Group is rated “Attractive” in our US Large-Cap Global Top Stock Ideas. 
  • Coty (COTY) reported weak 1Q results as it continues to be plagued with production problems.  Coty’s production woes caused revenue to come below the lowest estimate.  Coty said it is facing “temporary supply chain headwinds” as it sees strong demand that is cannot presently meet.  Coty sees some negative effects from these problems in the coming quarter’s results though Coty states all problems will be resolved shortly.  Coty is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • DaVita (DVA) shares are trading higher after a referendum to cap dialysis profits in California was voted down yesterday. Morgan Stanley said that, had the referendum been voted through, DaVita would have lost about 6% of its annual income. DaVita spent roughly USD$67mm to fight the referendum. DaVita is rated “Unattractive” in our US Large Cap Global Top Stock Ideas. 
  • Dean Foods Co. (DF) shares are spiraling after the top US dairy producer reported a larger-than-expected loss in CY3Q2018. Dean Foods reports a CY3Q2018 loss of USD$0.29/share while analysts expected a loss of USD$0.07/share. Dean Foods also pulled-back its guidance, citing higher-than-expected costs associated with closing seven of its plants. Dean Foods is rated “Neutral” in both our US SMID-Cap and US Consumer Staples Global Top Stock Ideas.
  • Dish Networks (DISH) reported 3Q subscriber losses that were above consensus, with a loss of 341,000 subscribers in the quarter.   Dish Networks expects even worse losses next quarter after suffering a blackout of some of its pay TV offerings as the results of contract disputes.  Dish Networks reported 3Q revenue of USD$3.4 billion, in line with consensus.  Dish Networks 3Q EPS was 82 cents while consensus was for 67 cents.  Dish Networks is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Frontier Communications (FTR) reported 3Q results that were in line with expectations.   Frontier Communications reported 3Q revenue of USD$2.13 billion while consensus was USD$2.12 billion.  Frontier Communications 3Q adjusted EPS came at a loss of 7 cents per share.  Frontier Communications saw negative free cash flow of USD$43mn, consensus was for a negative USD$3.05mn.  Frontier Communications is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas. 
  • Hermes International (ENXTPA: RMS) shares are trading slightly higher after the company reported CY3Q2018 y/y sales growth of 10% (excluding currency conversions) to 1.46bn euros. Analysts see this as a strong sign in what has been a gloomy European luxury retail industry. Hermes International’s sales growth was driven by higher clothing sales and stronger leather bag sales than analysts expected. Hermes International is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Humana (HUM) shares are higher in midday trading after the company reported CY3Q2018 financials and raised CY2018 guidance. Humana delivered diluted EPS of USD$4.65/share in CY3Q2018 while analyst consensus called for USD$4.18.  Humana raised its full-year 2018 adjusted EPS guidance by USD$0.25/share to USD$14.40/share. Humana is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.  
  • Ironwood Pharmaceuticals (IRWD) was downgraded by Credit Suisse and JP Morgan in the wake of weak 3Q results.   JP Morgan cut Ironwood Pharmaceuticals’ price target to USD$11 from USD$20 while cutting its rating to underweight from neutral.  Credit Suisse cut its price target to USD$14 from USD$20 and its rating to neutral from outperform.  Ironwood Pharmaceuticals is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.
  • Koninklijke Ahold Delhaize (ENXTAM: AD) shares are higher today after reporting CY3Q2018 financials that beat consensus analyst expectations. Ahold Delhaize grew its net sales 4.22% y/y in CY3Q2018 from 15.14bn euros to 15.78bn euros – analysts' consensus forecast called for sales of 15.5bn euros. Ahold Delhaize also beat consensus operating income expectations of 620mm euros by reporting CY3Q2018 operating income of 647mm euros. Ahold Delhaize is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas. 
  • Match Group (MTCH) shares suffered after reporting guidance below consensus.  Match Group said sales will be USD$440-4540mn, below consensus of USD$454.5mn while 3Q revenue came in line at USD$444mn.  Match Group sees little revenue growth for the rest of the year and it seeks to become a one-stop shop for dating apps.  Match Group is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Michael Kors Holdings Ltd. (KORS) shares are falling the most in intraday trading since May 2015 after the company missed consensus analyst forecasts for same-store sales and pulled-back its full-year comparable sales forecast. Michael Kors management discussed in its conference call that they expect comparable same-store sales growth in FY3Q2019 to fall into the single digits, primarily due to negative currency conversion impacts. Despite pulling back its guidance, Michael Kors reported FY2Q2019 EPS of USD$1.27/share while analyst consensus called for USD$1.10. Michael Kors is not rated in our Global Top Stock Ideas.  
  • Mylan N.V. (MYL) shares traded higher yesterday after the company reported better-than-expected CY3Q2018 earnings. Mylan announced CY3Q2018 adjusted EPS y/y growth of 13.6% to USD$1.25/share while consensus estimates called for USD$1.19. Mylan is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.   
  • Persimmon (PSN LN) CEO Jeff Fairburn will be leaving the company by “mutual agreement” according to a release from Persimmon.  The CEO has faced criticism for his USD$99mn bonus package and an overall compensation that grew 22 times larger between 2016 and 2017.  Despite leaving, Persimmon will still pay him the full bonus package he received.  Persimmon is rated “Top Buy” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Vestas Wind Systems (CPSE: VWS) shares are up after the company maintained its full-year guidance for revenue and profit margin but missed on quarterly financials. Vestas’ management reiterated its full-year revenue target of between 10bn euros and 10.5bn euros while maintaining its full-year EBIT margin forecast of between 9.5% and 10.5%. Vestas reported CY3Q2018 revenue of 2.81bn euros while consensus analyst estimates called for 2.83bn euros. Vestas is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Sophos Group PLC (LSE: SOPH) shares are tumbling after the company said it only expects “modest” improvements in its billings growth in the second half of FY2019. An analyst from Liberum said Sophos’ y/y billings growth could be “flat at best” while an analyst from Short Capital believes FY2019 billings growth could be ~5% below consensus. JP Morgan downgraded Sophos to neutral from overweight while lowering its price target from 6 pounds/share to 4.20 pounds/share. Sophos is rated “Top Short” in our United Kingdom All-Cap Global Top Stock Ideas.  
  • Tableau Software, Inc. (DATA) shares are rising after the company announced CY3Q2018 financials that generated split opinions from Wall Street analysts. As a result of its quarterly financials, Bernstein upgraded Tableau from market perform to outperform and raised its price target from USD$124/share to USD$145/share, citing Tableau’s new pricing structure that will drive long-term new business growth. Cowen, on the other hand, downgraded Tableau from outperform to market perform while lowering its price target from USD$113/share to USD$103/share, citing a complex revenue model that will lead to less recurring revenue than expected. Tableau is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas. 
  • Virtu Financial, Inc. (VIRT) is set to acquire Investment Technology Group (ITG) for USD$30.30/share in cash. The USD$30.30/share acquisition price represents more than a 40% premium on ITG’s average closing share price over the last 30 days. ITG also announced CY3Q2018 financial results surpassed analyst expectations today. Virtu Financial is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas. ITG is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.
  • Wizz Air Holdings (LN: WIZZ) shares are rising today after management detailed in its CY3Q2018 conference call that it is sacrificing current profit margins in order to pursue growth. Wizz management believes that rising oil prices will cause weakness in several competitors, creating an opportunity to grow its market share. Wizz also pulled-back its full-year profit guidance, specifying that they will only be able to offset rising fuel costs for about half of its annual oil expenses. Wizz is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Zillow Group (ZG) shares plunged in after-hours trading after cutting its forecast for the second straight quarter.  Zillow Group now sees full year revenue of USD$1.307-1.324 billion, a range below the lowest estimates.  Zillow Group sees full year ebitda of USD$195-207mn, again well below the USD$247mn consensus.  Zillow Group said it will take time for advertisers to adopt to its new business model and cited that as the reason for the cut.  Zillow Group is not rated in or Global Top Stock Ideas.

 

US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 2.46 basis points to 2.95%
  • US 5-Year Treasury Bonds are lower with yields up 1.38 basis points to 3.06%
  • US 10-Year Treasury Bonds are higher with yields down -0.51 basis points to 3.22%
  • The US Treasury 2s-5s Spread has narrowed 1.08 basis points to 0.12%
  • The US Treasury 2s-10s Spread has narrowed 2.97 basis points to 0.27%
  • US Treasury 5s-10s Spread has narrowed 1.89 basis points to 0.15%
     

Currencies

  • EUR€ is little changed 0.123% against the USD$ in after hours to 1.1441
  • GBP£ is up 0.305% against the USD$ in after hours to 1.3139
  • CHF is little changed 0.1% against the USD$ in after hours to 0.9985
  • JPY¥ is little changed 0.079% against the USD$ in after hours to 113.52

Commodities

  • WTI Crude is down -0.87% to USD$61.67/bbl with the Brent-WTI spread up USD$1.08 to USD$9.61/bbl
  • Gold is little changed -0.09% to USD$1226.11/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
Cimarex Energy Co Energy 93.19 11.77%                415,912
DaVita Inc Health Care 76.08 10.37%                997,168
Centene Corp Energy 142.90 8.82%                442,649
Pioneer Natural Resources Co Health Care 161.71 8.59%                580,540
WellCare Health Plans Inc Health Care 275.21 7.23%                352,050
 
Underperformers Sector Price 1D % Chg Volume
Coty Inc Consumer Staples 8.66 -24.24%            4,723,393
Michael Kors Holdings Ltd Consumer Discretionary 49.05 -15.37%            2,343,189
DXC Technology Co Information Technology 63.21 -14.24%            2,193,631
Garrett Motion Inc Consumer Discretionary 14 -5.18%                453,377
CarMax Inc Consumer Discretionary 68.15 -3.19%                524,325