blog

Latest from the Quantamize Blog

US stocks surge the most in 8 months on Fed Chair's dovish tone

Nov 28, 2018

 

US Markets End of Day Snapshot

  • US stocks surged today as a dovish tone from Fed Chairman Powell in his remarks left most investors believing the Fed is closer to pausing rate hikes than originally believed.  Chairman Powell stated that the economy is "solid" and that he does not see asset classes "where valuations appear far in excess of standard benchmarks".
  • Fed Chairman Powell's comment on rates contrasted with his more hawkish comments last month when he said rates were a long way from neutral
  • The S&P 500 finished up 2.3%, Nasdaq Composite up 2.95%, and Russell 2000 up 2.51%
  • Tech (+3.44%), Consumer Discretionary (+3.23%), and Healthcare (+2.46%) stocks were the top performers in the S&P 500 today
  • Consumer Staples (+0.99%), Real Estate (+0.87%), and Utilities (-0.12%) 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 9.42x
  • 18 stocks in the S&P 500 hit 4-week highs while 29 stocks reached 4-week lows
  • 8 stocks in the S&P 500 closed overbought while 15 stocks closed oversold according to the 16-day RSI Measure
  • 41 stocks in the Nasdaq Composite hit 4-week highs while 175 stocks reached 4-week lows
  • 117 stocks in the Nasdaq Composite closed overbought while 322 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed down 0.51 points today to 18.51 after closing at 19.02 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Alphabet’s (GOOGL) Google has a plan to eradicate mosquitoes around the world that carry disease.  Google is releasing mosquitoes with a bacteria implanted that renders the hatched offspring unviable.  The vermin could be released around the world potentially eradicating vermin-borne diseases.  Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • AXA SA (ENXTPA: CS) shares are trading slightly higher after the company’s CEO Thomas Buberl promised a more generous dividend policy in the future. Buberl’s comments come after AXA announced the USD$15.3bn acquisition of XL Group in March. AXA also raised its guidance for 2019 and 2020, citing additional synergies that will stem from the purchase of XL Group. AXA is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Burlington Stores (BURL) shares are soaring after beating analyst estimates for FY3Q2018 and raising their full-year guidance. Burlington generated an adjusted EPS of USD$1.21/share in FY3Q2018 while analysts’ consensus called for USD$1.06/share. Additionally, Burlington saw FY3Q2018 comparable y/y same store sales growth of 4.4% while analysts expected just 3.1%. Burlington management upped its full-year guidance for adjusted EPS to between USD$6.33/share and USD$6.37/share from between USD$6.13/share and USD$6.20/share. Burlington is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Campbell Soup Company (CPB) is considering Mark Clouse, the CEO of Pinnacle Foods (PF) to take over as CEO, according to a report in the Wall Street Journal today.    The article state that Campbell Soup will make its choice by the end of the year.  Campbell Soup said it is “considering a number of highly qualified candidates”.  Campbell Soup Company is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.  Pinnacle Foods is rated “Top Short” in our US Large-Cap Global Top Stock Ideas
  • Shares of Chico’s FAS Inc. (CHS) are plunging the most in its 25 years as a publicly traded company after reporting abysmal financials for FY3Q2018. Chico’s saw net sales of USD$499.9mm in FY3Q2018 while analyst estimates ranged between USD$511.0mm and USD$522.0mm. Chico’s consolidated comparable same store sales growth of –6.8% significantly missed analysts’ consensus, which called for –2.1%. Chico’s is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Continental AG (DB: CON) shares are trading lower on comments made by the company’s CFO regarding the first half of 2019. Continental CFO Wolfgang Schaefer said that tough business conditions, which have persisted in the second half of 2018, will continue through at least the first half of 2019, citing a weak Chinese market and Europe’s switch to a new system for emissions testing. Schaefer detailed further that Continental’s margins will suffer as a result of these issues. Continental is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • CVS (CVS) officially closed the USD$70 billion deal to buy Aetna (AET).  CVS proposed the Aetna deal a year ago.  The idea is to use CVS locations as hubs for medical services while better managing care, ambitious goals according to most analysts.  CVS has promised to quickly roll out products to that end now that the deal is complete.  CVS is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Aetna is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
    Danone SA (ENXTPA: BN) shares are trading slightly lower after Goldman Sachs cut its recommendation for the French food and beverage giant from “Neutral” to “Sell”.  Goldman Sachs also lowered its price target for Danone to 61 euros/share from 67 euros/share, implying an 8.1% downside from yesterday’s closing price. In a note, Goldman Sachs analyst John Ennis cited that current company organic sales growth guidance and consensus expectations are “optimistic” given the deteriorating demographic trends in China. Danone is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Deutsche Bank (DBK GR) may remove the senior executives that deal with regulators.  A Bloomberg article reports that regulators are frustrated with the bank’s inability to stop financial crimes.  Deutsche Bank has been trying to convince regulators it has improved compliance systems and processes, but they are not buying it.  Deutsche Bank officially has no comment on the matter, yet.  Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Discovery Inc (DISCA) has said in the event no Brexit deal is reached it is planning to move its European operation to the Netherlands.  Discovery fears remaining in the UK and not having the correct licenses to be able to broadcast into the EU.  Discovery is considering a move to Amsterdam.  Discovery is not rated on our Global Top Stock Ideas.
  • Janus Henderson (JHG) forecasts choppy trading for global technology stocks in the first half of 2019, citing prospects of increased US tariffs on Chinese exports and slowing Chinese growth. Janus Henderson warned investors to be wary of “demand destruction” caused by the US-Sino trade war, which is currently in “uncharted” territory. Janus Henderson highlighted that, among FAANG stocks, Alphabet (GOOGL) and Facebook (FB) offer strong risk-reward potential. Janus Henderson is not rated in our Global Top Stock Ideas.
  • J.M. Smucker (SJM) shares are trading lower after reporting FY2Q2018 financials that missed consensus analyst expectations. J.M. Smucker’s adjusted EPS of USD$2.17/share in FY2Q2018 missed analysts’ consensus of USD$2.29/share.  J.M. Smucker reported full-year adjusted EPS guidance of between USD$8.00/share and USD$8.20/share, which misses the midpoint analyst estimate of USD$8.36/share. J.M. Smucker is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas. 
  • LafargeHolcim Ltd (LHN SW) said it plans to sell assets and streamline operations as it looks to boost profit.  LafargeHolcim Ltd is leaving its headquarters in Zurich and Paris and settling at a new location in Zug, Switzerland.  LafargeHolcim Ltd now expects ebitda to grow at least 5% annually with these moves, up from previous 3-5% growth guidance.  LafargeHolcim Ltd is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Microsoft (MSFT) closed yesterday with a market cap above that of Apple (AAPL).  Microsoft’s USD$828.1 billion market cap was about USD$1 billion more than Apple’s at the close.  This is after Apple has seen USD$300 billion in market cap evaporate recently as tech shares have suffered on trade concerns.  Microsoft is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Apple is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • PG&E (PCG) decided to not cut power to the area where the Camp Fire started believing that the winds at the time did not warrant it, according to the final report from regulators.  PG&E kept its eyes on the weather and advised customers it may cut the power but ultimately it did not.  Even if PG&E had cut the power, it would have been only to the local distribution network and not to the high tension lines that were believed to have started the fire.  PG&E is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Royal Bank of Canada (TSX: RY) reports FY4Q2018 financials that widely beat analysts’ consensus expectations. Notably, Royal Bank of Canada generated adjusted cash EPS of CAD$2.24 in FY4Q2018, beating the highest analyst estimates, which ranged between CAD$2.08 and CAD$2.15. Additionally, Royal Bank of Canada reported its highest domestic net interest margin in five years. Royal Bank of Canada is not rated in our Global Top Stock Ideas.
  • Salesforce.com (CRM) reported results that topped analysts’ estimates.   Salesforce.com fiscal 3Q billings came at USD$2.89 billion while consensus was for USD$2.68 billion, a 27% jump.  Revenue guidance for fiscal 2020 is USD$16 billion while the company’s outlook of USD$23 billion in 2022 appears to be on track.  Salesforce.com is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Tesla (TSLA) owners have driven one billion miles on the company’s Autopilot feature.  Tesla said the large volume of data these miles provide allow it to continually update its algorithms with real world experience.  Autopilot has been installed on every Tesla produced since October 2016.  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
  • Tiffany and Co. (TIF) shares are falling after reporting CY3Q2018 earnings growth ahead of the holiday season that largely disappointed investors. Tiffany’s generated y/y same store sales growth of just 3% in 3Q while analysts expected growth of 5.6%. Despite lagging sales growth, Tiffany’s reported 3Q EPS in-line with analysts’ consensus of USD$0.77/share driven by a gross margin of 62.2% while analysts expected just 62.0%. Tiffany’s is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Unilever (UNA NA) is in exclusive talks with GlaxoSmithKline (GSK LN) to acquire its nutrition business, according to the Financial Times.  The report does not mention a price as it has not been made public yet.   GlaxoSmithKline received offers from multiple players with Unilever’s coming in on top.  GlaxoSmithKline is rated "Neutral" in our United Kingdom All-Cap Global Top Stock Ideas.  Unilever is rated "Neutral" in our European Large-Cap Global Top Stock Ideas   
  • United Technologies (UTX) officially announced that it will split into three independent entities yesterday, sending its bond prices higher. United Technology will spin off its Collins Aerospace Systems and Pratt & Whitney businesses, its Otis and Climate business, and its Controls & Security business to operate as three separate entities. Upon its separation, the three entities combined will pay a quarterly dividend of
  • Wayfair (W) reported a 58% y/y jump in sales during the Thanksgiving to Cyber Monday period.  This led Baird to comment in a note that Wayfair’s sales gain has “considerable upside potential” with strong start to the holiday season.  These results make it more likely for Wayfair to beat present 4Q sale consensus of USD$1.97 billion, the note goes on to highlight.  Wayfair is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
     

 

US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -2.22 basis points to 2.8107%
  • US 5-Year Treasury Bonds are higher with yields down -2.19 basis points to 2.8682%
  • US 10-Year Treasury Bonds are lower with yields up 0.18 basis points to 3.059%
  • The US Treasury 2s-5s Spread has widened 0.03 basis points to 0.06%
  • The US Treasury 2s-10s Spread has widened 2.4 basis points to 0.25%
  • US Treasury 5s-10s Spread has widened 2.37 basis points to 0.19%

Currencies

  • EUR€ is up 0.709% against the USD$ in after hours to 1.1369
  • GBP£ is up 0.635% against the USD$ in after hours to 1.2828
  • CHF is up 0.539% against the USD$ in after hours to 1.0066
  • JPY¥ is little changed 0.149% against the USD$ in after hours to 113.62

Commodities

  • WTI Crude is down -2.46% to USD$50.29/bbl with the Brent-WTI spread down USD$-1.4 to USD$7.78/bbl
  • Gold is up 0.53% to USD$1221.51/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
salesforce.com Inc Financials 141 10.27%            4,749,781
Adobe Inc Consumer Staples 249 7.30%            2,385,551
ABIOMED Inc Information Technology 335 6.77%                253,855
Align Technology Inc Information Technology 236 6.74%                491,713
Freeport-McMoRan Inc Consumer Staples 12 6.49%            6,313,261
 
Underformers Sector Price 1D % Chg Volume
Tiffany & Co Utilities 92.5 -11.82%            1,446,780
JM Smucker Co/The Information Technology 101 -7.24%                757,897
CME Group Inc Materials 187 -3.63%                975,399
SCANA Corp Health Care 45.5 -3.11%                268,968
Tyson Foods Inc Information Technology 57 -2.31%                731,150