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US stocks mostly flat after Fed leaves rates unchanged but affirms future higher rate policy while falling energy prices create negative sentiment and weakness in FANG stocks pressures the tech sector

Nov 08, 2018

 

 

US Markets End of Day Snapshot

  • US stocks finished the day mostly flat after the Federal Reserve leaves interest rates unchanged as expected while indicating December hike likely
  • Energy prices creates negative sentiment and weakness in FANG stock pressures tech sector
  • The S&P 500 finished down 0.06%, Nasdaq Composite is down 0.29%, and Russell 2000 is down 0.08%
  • Financials (+0.68%), Consumer Discretionary (+0.5%), and Healthcare (+0.27%) stocks were the top performers in the S&P 500 today
  • Telecom (-0.68%), Utilities (-0.78%), and Energy (-0.89%) stocks were the worst performers in the S&P 500 today
  • Investor sentiment for US stocks finished neutral with the advance/decline ratio for the S&P 500 closing at 1.07x
  • 158 stocks in the S&P 500 hit 4-week highs while 5 stocks reached 4-week lows
  • 21 stocks in the S&P 500 closed overbought while 4 stocks closed oversold according to the 16-day RSI Measure
  • 88 stocks in the Nasdaq Composite hit 4-week highs while 100 stocks reached 4-week lows
  • 459 stocks in the Nasdaq Composite closed overbought while 175 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed  down -4.58 points today  to 11.78 after closing at 16.36 last week

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • AAC Technologies (SEHK: 2018) shares are lower today after the company reported CY3Q2018 earnings that missed the lowest analyst estimate. AAC Technologies announced CY3Q2018 net income of 973mm yuan while analyst estimates ranged between 1.16bn yuan and 1.47bn yuan -- consensus called for 1.33bn yuan. AAC Technologies also saw its gross margin in CY3Q2018 fall short of the 39.2% consensus estimate, reporting a gross margin of 37.1%. AAC Technologies cited a sluggish global smartphone market during CY3Q2018 in explaining its poor financials. AAC Technologies is rated “Neutral” in our China All-Cap Global Top Stock Ideas.  
  • AstraZeneca (LSE: AZN) shares are trading higher after the company announced CY3Q2018 product sales that topped analyst estimates by 3% and EBIT for the quarter 7% above analyst estimates. Management attributed “notably” higher product sales to a mix of better figures in their new and old drugs. AstraZeneca’s bottom-line EPS, meanwhile, fell in-line with analyst expectations. AstraZeneca is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Bombardier (BBD/B CN) announced it is cutting 5,000 jobs and selling assets, as its CEO looks to overhaul the company.  Bombardier will sell its Q400 turboprop business and others assets looking to make a total of USD$900mn in divestures.  Bombardier sees USD$250mnin annual savings from the moves by 2021 and will take a charge for the same amount in 2019.  Bombardier is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.
  • Cheniere Energy (LNG) was up today after boosting guidance on its conference call, this in the wake of strong 3Q results.  Cheniere Energy raised its full year distributable cash-flow guidance by 16% citing improvement to its Texas facility yielding greater production.  On its call, Cheniere Energy CEO said the company “in generating a whole lot of cash” and he is “all for buybacks”.   Cheniere Energy did not give any specifics on share buybacks.  Cheniere Energy is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Commerzbank (CBK GR) reported 3Q results that were in line and received generally encouraging comments from analysts.  Commerzbank saw 3Q revenue of 2.19 billion euros while 2.17 billion was expected.  Commerzbank 3Q net income of 218mn euros was a touch above 211.9mn euros was consensus.  Commerzbank has added 900,000 customers over the last year and management sees the first sign of recurring business from those new clients.  Commerzbank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.    
  • CommScope Holding Co (COMM) agreed to acquire Arris International Plc (ARRS) creating a powerhouse in telecommunications networking equipment, according to a statement from CommScope Holding Co today.  CommScope Holding Co cash purchase price is set at USD$31.75 compared with a USD$27.79 closing price yesterday for Arris International Plc.  CommScope Holding Co’s acquisition of Arris International Plc will be a USD$7.4 billion deal.  CommScope Holding Co is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Arris International Plc is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas “Neurtal” in our US Information Technology Global Top Stock Ideas.  
  • DR Horton (DHI) fell the most in more than three years after executives at the builder said that the housing market is getting “choppy” and that the pace of order growth may slow next quarter”.  DH Horton reported FY4Q2018 financials pre-market as well, matching consensus analyst EPS estimates of USD$1.22/share with their EPS of USD$1.22/share. DR Horton’s revenue fell just short of expectations, however, reporting FY4Q2018 sales of USD$4.51bn while consensus called for USD$4.56bn. DR Horton is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Johnson Controls (JCI) has hit a snag in its plan to sell its automotive battery unit to Brookfield Asset Management (BAM CN) according to a report in the Wall Street Journal today.  Johnson Controls was ready to complete a sale of the unit to Brookfield Asset Management for close to USD$14 billion.   An announcement from Johnson Controls was anticipated this week but none has come yet.  There was no report on what the “snag”, as the Wall Street Journal called it, was related to.  Johnson Controls is not rated in our Global Top Stock Ideas.  Brookfield Asset Management is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.
  • L Brands (LB) shares are trading higher today after the owner of Victoria’s Secret reported better-than-monthly comp sales. In October, L Brands saw its comparable sales growth at Victoria’s Secret remain flat at 0% while analysts expected a -4.2% decline. In its Bath and Body Works stores, L Brands reported October comparable sales growth of 11% while analysts expected 8%. L Brands reported preliminary CY3Q2018 adjusted EPS of ~USD$0.15/share. L Brands is rated “Unattractive” in both our US Large-Cap and US Consumer Discretionary Global Top Stock Ideas. 
  • Lenovo Group Ltd (SEHK: 992) shares are posting gains after the company announced FY2Q2019 earnings that largely beat the highest analyst forecasts. Lenovo’s FY2Q2019 net income of USD$168.4mm blows past consensus net income estimates of USD$115.7mm -- the highest analyst estimate for Lenovo’s FY2Q2019 net income was USD$127.0mm. Lenovo reported top-line revenue of USD$13.38bn in FY2Q2019 wile consensus called for USD$13.01bn. Lenovo is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • News Corp (NWSA) reported 1Q results that came in line with expectations.  News Corp reported revenue of USD$2.52 billion while consensus was for USD$2.53 billion.  News Corp adjusted EPS of 17 cents came above 5 cents consensus.   News Corp is testing a sports streaming service in its Foxtel unit, presently going through a turnaround, as management is confident of the unit’s strong future.  News Corp is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Party City (PRTY) shares are falling today after the company reported full-year guidance that missed the lowest analyst estimate. Party City forecasts FY2018 adjusted EPS of between USD$1.60/share and USD$1.65/share while analyst adjusted EPS estimates range between USD$1.79/share and USD$1.86/share. Party City also announced FY3Q2018 adjusted EPS of USD$0.08/share while consensus estimates called for more than double that, at USD$0.17/share. Party City is rated “Attractive’ in our US SMID-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Poste Italiane SpA (BIT: PST) shares are posting notable intraday gains after reporting CY3Q2018 financials that surpassed analyst expectations. Poste Italiane reported CY3Q2018 revenue of 2.52bn euros while consensus called for 2.51bn. Poste Italiane also announced a 5% y/y dividend hike for the quarter to 0.44 euros/share. Poste Italiane is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas. 
  • ProSiebenSat.1 Media (XTRA: PSM) shares are tumbling after the company announced that it expects sales to fall in 2018 and that it will pay out a smaller dividend for the year. ProSiebenSat.1 Media will take a one-time 400mm euro charge related to licensing rights as the company renegotiates US studio contracts. ProSiebenSat.1 media will also begin investing in streaming services to complete with companies like Netflix and Amazon. PrioSiebenSat.1 Media is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas. 
  • Qualcomm (QCOM) gave tepid guidance for the coming year as Apple (AAPL) has stopped placing orders with the two preparing to face off in court.   Qualcomm sees 1Q sales of USD$4.5-5.3 billion while present consensus is USD$5.56 billion.  Qualcomm expects a pickup later in the year as 5G rollout picks up steam.   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.
  • Siemens AG (DB: SIE) shares are slightly higher today after the company increased its dividend and provided positive 2019 guidance. Siemens’ management discussed that favorable market conditions in 2019 should result in a profit margin between 11% and 12%. On top of the dividend hike from 3.70 euros per share to 3.80 euros per share, Siemens announced a plan to buy back 3bn euros worth of shares. Siemens is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Societe Generale (ENXTPA: GLE) shares are rising after reporting CY3Q2018 EPS that significantly beat analyst expectations. Societe Generale’s CY3Q2018 net income of 1.23bn euros surpassed the largest analyst estimates that ranged between 823.0mm euros and 1.19bn euros. Notably, Societe Generale saw its equity trading, which has traditionally been a strength for the company, jump 19% for the quarter, its first gain in more than a year. Societe Generale is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. 
  • Tesla (TSLA) announced one of its independent directors, Robyn Denholm, will take over as chairman of the board effective immediately.  She will take over from CEO Elon Musk as he vacates the chairman position as part of his settlement with the SEC.  Robyn Denholm has been an independent director since 2014.  Tesla is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Short” in our US Consumer Discretionary Global Top Stock Ideas.
  • Toshiba (TSE: 6502) shares are spiking after the company announced that it will sell its Toshiba American LNG Corp. unit to China’s ENN Ecological Holdings Co. (SHSE: 600803) for USD$15mm. Toshiba also agreed to pay ENN USD$821mm in order to receive all LNG (liquified natural gas) produced by Toshiba American LNG Corp.  Toshiba is not rated in our Global Top Stock Ideas.  
  • TripAdvisor (TRIP) has seen estimates increased by analysts after delivering strong 3Q results yesterday.   TripAdvisor 3Q adjusted EPS came well above 48 cents expected.  TripAdvisor saw mobile customers grow 12% y/y while the margin of its hotels unit doubled to 32.25%.  SunTrust calls TripAdvisor’s ebitda outlook “comfortably above consensus”.  TripAdvisor is rated “Neutral” in both our US Large-Cap and US Consumer Discretionary Global Top Stock Ideas. 
  • UniCredit (IBIT: UCG) shares are trading lower after the company announced a surprise one-time charge of 850mm euros (USD$972mm) related to its Turkish bank. According to management, the charge was caused by a revaluation of its Istanbul-based Yapi Kredi Bankasi AS which required an increase in funds to cover a potential settlement related to US sanctions on Iran. UniCredit was forced to pull-back its full-year revenue guidance due to the charge, however, the company maintained its 2019 profit target. UniCredit is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. 
  • Wynn Resorts Ltd (WYNN) said gaming revenue in Macau since the passage of Golden Week has been “sporadic”.   Wynn Resorts Ltd has seen weak revenue over the last week in Macau, adding fuel to the belief that the trade war and weaker economy in China are holding back gamblers.   Wynn Resorts Ltd believes the current pullback is temporary and sees underlying demand still strong.  Wynn Resorts Ltd is rated “Neutral” in our US Large-Cap and US Consumer Discretionary Global Top Stock Ideas.
  • Zayo Group Holdings (ZAYO) shares are spiraling in the stock’s largest intraday drop since October 2014 after the company reported FY1Q2019 EPS of USD$0.09/share while analyst consensus forecasts called for USD$0.11/share.  As a result of its earnings, Zayo was downgraded from buy to neutral at both BTIG and UBS. Zayo is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  

 

US Treasuries

  • US 2-Year Treasury Notes are flat with yields little changed 0.01 basis points to 2.95%
  • US 5-Year Treasury Bonds are lower with yields up 0.18 basis points to 3.08%
  • US 10-Year Treasury Bonds are higher with yields down -0.56 basis points to 3.22%
  • The US Treasury 2s-5s Spread has widened 0.17 basis points to 0.12%
  • The US Treasury 2s-10s Spread has narrowed 0.57 basis points to 0.27%
  • US Treasury 5s-10s Spread has narrowed 0.74 basis points to 0.15%

Currencies

  • EUR€ is little changed 0.131% against the USD$ in after hours to 1.1411
  • GBP£ is little changed 0.122% against the USD$ in after hours to 1.311
  • CHF is little changed 0.13% against the USD$ in after hours to 0.9963
  • JPY¥ is up 0.326% against the USD$ in after hours to 113.89

Commodities

  • WTI Crude is down -0.96% to USD$61.08/bbl with the Brent-WTI spread down USD$-0.46 to USD$9.23/bbl
  • Gold is little changed -0.23% to USD$1223.65/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
TripAdvisor Inc Communication Services 67.13 15.34%            1,927,812
Flowserve Corp Industrials 54.56 10.88%                141,154
Microchip Technology Inc Information Technology 75.39 7.26%            1,171,410
ANSYS Inc Information Technology 168.1 5.39%                143,733
Johnson Controls International plc Industrials 35.11 5.11%                516,313
 
Underperformers Sector Price 1D % Chg Volume
Perrigo Co PLC Health Care 64.07 -14.53%                460,084
Wynn Resorts Ltd Consumer Discretionary 101.1 -11.70%            1,637,639
DaVita Inc Health Care 69.81 -8.65%                224,869
QUALCOMM Inc Information Technology 58.66 -6.85%            4,858,900
DR Horton Inc Consumer Discretionary 35.44 -5.48%                791,638