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US stocks plunge with tech woes leading risk-off sentiment

Nov 12, 2018

 

 

US Markets End of Day Snapshot

  • US stocks plunged today with tech woes weighing on investors, tech shares led the losses in today's session
  • Apple's weak outlook for iPhone sales continues to weigh on the tech sector overall as investors consider potentially weaker demand for tech products
  • The Russell 2000 has given up all its 2018 gains
  • The S&P 500 is currently down 1.96%, Nasdaq Composite is down 2.78%, and Russell 2000 is down 1.98%
  • Real Estate (+0.2%), Utilities (-0.03%), and Consumer Staples (-0.65%) stocks are the top performers in the S&P 500 today
  • Energy (-2.14%), Consumer Discretionary (-2.31%), and Tech (-3.54%) stocks are the worst performers in the S&P 500 today
  • Investor sentiment for US stocks is negative with the advance/decline ratio for the S&P 500 currently at 0.23x
  • 90 stocks in the S&P500 are at 4-week highs while 21 stocks are at 4-week lows
  • 26 stocks in the S&P 500 are overbought while 14 stocks are oversold according to the 16-day RSI Measure
  • 76 stocks in the Nasdaq Composite are at 4-week highs while 141 stocks are at 4-week lows
  • 223 stocks in the Nasdaq Composite are overbought while 265 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently moving up at 20.24 from last week's close of 17.36

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Alibaba (BABA) posted sales of USD$30.8 billion on singles day over this weekend.  Alibaba pulled in those sales in the 24-hour period that ended at 12am Sunday.  This was Alibaba’s 10th singles day and it saw sales grow 27% year on year.  Last year Alibaba saw a 37% hike in sales.  Alibaba’s CEO Jack Ma is set to step down shortly, having previously announced his pending retirement.  Alibaba is rated “Neutral” in our China All-Cap Global Top Stock Ideas
  • Alphabet’s (GOOGL) Google has said the new EU plan to deal with copyright problems, known as Article 13, may be unrealistic.  Google said that while it has agreements for most of the videos on its YouTube service there are some in which multiple parties claim copyright.  In these cases, Google may have to delete these videos.  While a small percentage it would be many, many videos and if passed Google would likely have to remove many users content from YouTube. Something Google is warning will cause tension with its users.  Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Athenahealth Inc. (ATHN) shares are trading higher after private-equity firm Veritas Capital and Elliott Management Corporation announced they will acquire the company.  Athenahealth will be acquired in an all-cash transaction for USD$135/share, representing a 12% premium to the stock’s Friday close price. Athenahealth is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
  • British American Tobacco (LSE: BATS) shares are falling alongside other large tobacco companies after the Wall Street Journal reported that the Food and Drug Administration (FDA) is planning to propose a ban on menthol cigarettes. An analyst from Morgan Stanley wrote in regards to the possible ban that, “British American Tobacco is the most exposed name to the potential risk,” with the company’s US menthol cigarettes business accounting for 25% of its total earnings. British American Tobacco is rated “Top Buy” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Third Point is complaining to Campbell Soup Company (CPB) about its exclusion from the Board of Directors.  Third Point holds 7% of Campbell Soup Company.  Third Point said it is happy the Board agrees it “needs to be refreshed” and that the Board is considering two candidates it nominated but is not happy that someone from Third Point itself is not being considered.  Third Point further informed Campbell Soup Company that it is the norm for activist investors to be welcomed to the Board.  Campbell Soup Company is rated “Neutral” in both our US Large-Cap and US Consumer Staples Global Top Stock Ideas.
  • Cheesecake Factory Inc (CAKE) was downgraded at Barclay’s to underweight from equal weight.  Cheesecake Factory Inc saw its price target lowered to USD$47 from USD$51.  The downgrade of Cheesecake Factory Inc followed its full year EPS guidance cut to USD$2.42-2.46 from USD$2.62-2.74.  Cheesecake Factory Inc is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Flughafen Zurich AG (SWX: FHZN) shares are falling after announcing that new guidelines required by the Swiss national regulator would result in its aviation revenue falling by 150mm Swiss francs (USD$148mm). Flughafen shares are falling the most in intraday trading since 2013 with the loss in aviation revenue representing about 25% of the companies’ total top-line. Flughafen Zurich AG is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas. 
  • General Electric’s (GE) new CEO spoke today in an effort to calm investors.  Instead, he sent General Electric’s stock tumbling, and it was down over 10% at one point today.  He said General Electric’s has a “sense of urgency” to cut debt and that General Electric’s power unit has yet to hit bottom; neither calmed investors.  Amid the rout Credit Suisse cut its price target on General Electric to USD$10 saying there is little visibility at the company presently.  General Electric is rated “Top Short” in our US Large-Cap Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.
  • Infinity Pharmaceuticals (INFI) was downgraded by JP Morgan today to underperform from neutral.  Infinity Pharmaceuticals is a “show me” story at this point.  Infinity Pharmaceuticals was downgraded at Wells Fargo to neutral from outperform.  Infinity Pharmaceuticals lost over 40% in trading today.  Infinity Pharmaceuticals is rated “Unattractive” on our US SMID-Cap Global Top Picks Stock Ideas.
  • Intelsat (I) was upgraded by Morgan Stanley to equal weight from underweight.  Intelsat has its price target hiked to USD$28 from USD$8.  Intelsat recently affirmed full year sales guidance of USD$2.06-2.11 billion, below consensus of USD$2.15 billion.  Intelsat is not rated in our Global Top Stock Ideas. 
  • IQE PLC (AIM: IQE) shares fell substantially today after the company said that it expects a material reduction in its financial performance for the full-year. In a company announcement, IQE detailed that a, “major chip company,” who is, “one of its largest,” customers will be, “materially,” reducing shipments in the current quarter. IQE did not supply financial guidance, however, the company does expect a reduction in financial performance. IQE is rated “Top Short” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • L Brands (LB) was upgraded today at Wells Fargo to outperform from market perform.  L Brands is “one of the most interesting names heading into the next year” the report notes.  L Brands’ price target was raised to USD$55 from USD$30 and at this time is the highest target in the market.  Wells Fargo goes on to describe L Brands as “the next retail turnaround story”.  L Brands is rated “Unattractive” in both our US Large-Cap and US Consumer Discretionary Global Top Stock Ideas.
  • Lumentum Holdings Inc. (LITE) shares are plummeting along with other Apple Inc. (AAPL) suppliers as investors are fearing weak iPhone demand. Longbow Research reported today that Apple is facing weak iPhone demand in China while Nikkei reported last week that Apple cancelled a production boost for its iPhone XR line. Today, Lumentum Holdings cut its FY2Q2019 outlook after being asked to, “meaningfully reduce shipments,” for previously placed orders. Lumentum is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas. Apple is rated “Attractive’ in both our US Large-Cap & US Information Technology Global Top Stock Ideas.  
  • Microsoft (MSFT) has pledged to support the “Paris call for trust and security in cyberspace” together with many other tech companies.  The idea of the pledge is to unite tech companies to battle election tampering, compromised electronic components and software hacks.  Microsoft has pledged its help to avoid some of the problems seen over the last few years and this effort has been spearheaded by France’s President Macron.  Microsoft is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Netflix (NFLX) said it will test lower-priced offerings of its streaming service to boost its sales.  Netflix CEO said it does not have a firm plan yet but intends to try lower prices in some markets.  Netflix plans to inform about its plans soon once completed and its CEO said there will definitely be tests soon.  Netflix is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Nyrstar (ENXTBR: NYR) shares have lost nearly half their value in intraday trading after ABN’s Phillip Ngotho warned that Nyrstar’s share value could be wiped out as a result of inevitable debt restructuring. Nyrstar, Europe’s largest zinc smelting company, has faced falling returns from zinc smelting due to lower processing fees and metal prices. As a result of lower zinc mining returns, Nyrstar has been hamstrung by interest payments that will force the company to refinance bonds due next year. Nyrstar is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas.  
  • PG&E Corporation (PCG) and Edison International (EIX) shares are falling the most in 16 years today as wildfires have spread across northern and southern California. Authorities are reportedly investigating electrical equipment as one of the possible causes of the wildfires. Reportedly, a PG&E transmission line went offline 15 minutes before one of the wildfires was first reported. Susquehanna Financial Group estimates that PG&E could be facing up to USD$5bn in liabilities as a result of the wildfires. PG&E is rated “Attractive” in our US Large-Cap Global Top Stock Ideas. Edison International is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • SAP SE (DB: SAP) will acquire Qualtrics International Incorporated (XM) for USD$8bn in the software company’s largest acquisition to date. The acquisition comes just before Qualtrics’ planned IPO, which the company initially filed for on October 19th, 2018. Qualtrics uses their software to gather and analyze data on customers, brands, employees, and products collected from emails, social media posts, and in-application data -- SAP hopes to leverage the acquisition in order to better understand its customers. SAP is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Qualtrics is not rated in our Global Top Stock Ideas.
  • Softbank (9984 JP) is seeking to raise USD$21.1 billion in the IPO of its mobile phone unit.   Softbank is looking to sell 1.6 billion shares at 1,500 yen per share.  Softbank said in its filing that is intends to pay out 85% of net income which would work out to about a 5% yield at present levels.  Many analysts question whether there is appetite for so much stock at this time.  Softbank is rated “Attractive” in our Japan All-Cap Global Top Stock Ideas.

 

US Treasuries

  • US 2-Year Treasury Notes are flat with yields little changed 0 basis points to 2.92%
  • US 5-Year Treasury Bonds are flat with yields little changed 0 basis points to 3.03%
  • US 10-Year Treasury Bonds are flat with yields little changed 0 basis points to 3.18%
  • The US Treasury 2s-5s Spread has little changed 0 basis points to 0.11%
  • The US Treasury 2s-10s Spread has little changed 0 basis points to 0.26%
  • US Treasury 5s-10s Spread has little changed 0 basis points to 0.15%
     

Currencies

  • EUR€ is currently down 1.014% against the USD$ to 1.1221
  • GBP£ is currently down 0.956% against the USD$ to 1.2848
  • CHF is currently down 0.523% against the USD$ to 0.9892
  • JPY¥ is currently little changed against the USD$ at 113.81

Commodities

  • WTI Crude is currently down -0.43% to USD$59.93/bbl with the Brent-WTI spread down USD$-0.33 to USD$8.28/bbl
  • Gold is currently down -0.74% to USD$1200.74/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
Nektar Therapeutics Health Care 37 8.70%            1,777,058
Garrett Motion Inc Information Technology 13.6 4.22%                277,947
NRG Energy Inc Utilities 39.8 3.97%            1,371,011
Conagra Brands Inc Consumer Staples 35.3 2.50%            1,290,377
Perrigo Co PLC Health Care 65.6 2.34%                315,270
 
Underperformers Sector Price 1D % Chg Volume
PG&E Corp Utilities 33 -17.36%            5,627,502
ABIOMED Inc Health Care 338 -16.61%                495,596
Edison International Utilities 53.6 -12.20%            2,069,173
Advanced Micro Devices Inc Information Technology 19 -9.51%          18,019,035
Align Technology Inc Health Care 217 -7.91%                584,577