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US stocks catch a bid late session led by tech, paring losses; Nasdaq closes higher

Dec 06, 2018

 

US Markets End of Day Snapshot

  • US stocks catch a bid late session led by tech, paring earlier losses, with the tech-heavy Nasdaq index closing higher 
  • The S&P 500 finished down 0.15%, Nasdaq Composite up 0.42%, and Russell 2000 is down 0.22%
  • The Presidents of both the Atlanta and Dallas regional Fed Banks advised policy caution on monetary policy in remarks today, with one commenting the Fed is within "shouting distance of neutral policy"
  • Amid the recent flattening of the yield curve, a record number of futures contracts traded today in both the eurodollar and fed funds futures contracts, as bets on 3 rate hikes in 2019 fade
  • President Trump was not aware of the arrest of the CFO of the Chinese technology company Huawei, Meng Wazhou, before it happened, according to the White House
  • In contrast, President Trump's national security adviser John Bolton said today in an interview with NPR that he was aware of the arrest before President Trump's meeting with Chinese President Xi
  • Today's session saw heavy stock volume that was on average 30% above the last 30 days
  • Real Estate (+2.66%), Telecom (+1.04%), and Consumer Discretionary (+0.61%) stocks were the top performers in the S&P 500 today
  • Materials (-1.36%), Financials (-1.44%), and Energy (-1.77%) stocks were the worst performers in the S&P 500 today
  • Investor sentiment for US stocks finished negative with the advance/decline ratio for the S&P 500 closing at 0.75x
  • 82 stocks in the S&P 500 hit 4-week highs while 73 stocks reached 4-week lows
  • 7 stocks in the S&P 500 closed overbought while 6 stocks closed oversold according to the 16-day RSI Measure
  • 48 stocks in the Nasdaq Composite hit 4-week highs while 164 stocks reached 4-week lows
  • 173 stocks in the Nasdaq Composite closed overbought while 597 stocks closed oversold according to the 16-day RSI Measure
  • The VIX finished higher at 20.98 after closing at 20.58 yesterday
     

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Apple (AAPL) consensus estimates will continue to drop near term, according to a report issued today by Rosenblatt.  Rosenblatt cut Apple’s target to USD$165, a market low, from USD$200.  Post-holiday, Rosenblatt expects iPhone sales to soften.  Apple is rated “Top Buy” in both our US Large-Cap and US Information Technology Global Top Stock Ideas.
  • Autoliv (ALV) said it has reserved USD$210mn to cover a potential fine from the European Commission, according to a note from Pareto.  The fine relates to an investigation of suppliers of occupant safety systems being conducted by the European Commission.  Autoliv would see a ~24% cut to consensus EPS for 2018, the note highlights.  Autoliv is not rated on our Global Top Stock Ideas.  
  • Avista Corporation (AVA) shares are falling the most in 16 years after Washington state regulators rejected the USD$3.4bn acquisition of the US utility by Canada-based Hydro One Ltd. (TSX: H). The Washington Utilities and Transportation Commission said in a statement today that the deal does not adequately protect Spokane, Washington-based Avista, or customers from political and financial risks. Additionally, the state regulator said that the acquisition does not provide a net benefit to customers. Avista Corporation is rated “Top Buy” in our US SMID-Cap Global Top Stock Ideas. Hydro One is not rated in our Global Top Stock Ideas.  
  • BAE Systems (BA LN) was downgraded today by UBS.  BAE Systems saw its rating cut to neutral from buy, its price target was cut to 505 pence from 720 pence.  UBS said it is “more cautious” on the defense industry in Europe overall.  BAE Systems is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Bombardier (BBD.B CN) said it sees revenue growing 10% in 2019 over 2018’s USD$18 billion guidance.  Bombardier sees 2019 adjusted ebitda of USD$1.65-1.8 billion.  Bombardier is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.
  • Capgemini (ENXTPA: CAP) shares are falling after Barclays downgraded the stock from overweight to equal-weight. Additionally, Barclays lowered its price target for Capgemini shares from 125 euros to 106 euros, representing a 2.7% upside from Wednesday’s close. Capgemini is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Dollarama (TSX: DOL) reports FY3Q2018 financials that generally miss analyst estimates. Dollarama generated an EPS of CAD$0.41/share in FY3Q2018 while analysts’ consensus called for CAD$0.43. Dollarama saw quarterly sales of CAD864.3mm in FY3Q2018 while analysts expected CAD$893.2mm. Despite missing earnings and sales estimates, Dollarama’s comparable sales growth of 3.1% was enough to squeak by the analyst consensus estimate of 3.06%. Dollarama is rated “Top Buy” in our Canada All-Cap Global Top Stock Ideas. 
  • Epic Games Inc., maker of the hugely popular “Fortnite”, said it will open its own online store to sell its apps and those of other developers.  The announcement was aimed at Apple (AAPL) as Epic Games will only charge a commission of 12%, that is less than half of what Apple charges to sell apps in its store.  Macquarie commented in a note that this audacious move could lead other developers to demand the same deal from Apple.  Apple is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Euromoney (ERM LN) will acquire “Boardex” and “The Deal” from The Street (TST).  Euromoney said the acquisition will create “a powerful workflow tool across multiple industries.  Boardex is an executive profile platform and The Deal is a platform focused on M&A news and data.  Euromoney will fund the acquisition with existing funding.  Euromoney is not rated on our Global Top Stock Ideas.  The Street is rated “Neutral” in our US Micro-Cap Global Top Stock Ideas.
  • Facebook (FB) had emails published that were sent among executives showing them trying to maximize the use of customers’ data.  The emails show executives treating customer data like a commodity that could be traded and used to Facebook’s benefit.  These emails from Facebook show customer data being used for the benefit of Facebook and seemingly without a care for the customers themselves.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas. 
  • Huawei Technologies Co.’s Chief Financial Officer Wanzhou Meng was arrested by Canadian officials at the instruction of the United States for allegedly violating Iranian sanctions. The US is now seeking the extradition of Meng while Chinese authorities are up in arms, calling for the release of the daughter of Huawei founder Ren Zhengfei. The arrest threatens to upend US-China trade negations, sending the shares of Qualcomm (QCOM)Advanced Micro Drives (AMD)Texas Instruments, Inc. (TXN), and other US-based chipmakers lower in pre-market trading. Qualcomm is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. Advanced Micro Drives is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. Texas Instruments is rated “Neutral” in our US large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Kroger (KR) reported same stores sales growth of 1.6%, just shy of 1.7% consensus expectation.  Kroger saw its gross margin decline 90 basis point to 21.60% as a result of its heavy investments in store upgrades.  Kroger’s CFO told Bloomberg the company is reaping the benefits of its increased investments.  Kroger is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Lam Research (LRCX) announced it fired CEO Martin Anstice.  Lam Research he was fired after an investigation into workplace misconduct.  Lam Research did not detail the details of the investigation but said it did not involve any financial misconduct.  Lam’s COO took over as CEO for now.  Lam Research is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. 
  • Och-Ziff Capital Management Group LLC (OZM) shares are soaring after announcing plans to conduct a reverse stock split to convert from a partnership to a corporation. Och-Ziff Capital announced these plans after its share price sank below USD$1. Companies who trade on the NYSE risk being de-listed if their stock trades below an average price of USD$1 for a 30-day period. Och-Ziff Capital is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas. 
  • PG&E’s (PCG) high-voltage transmission tower had a steel hook fail that was holding a high tension transmission line, and that was the cause of the recent Camp Fire, according to a report from NBC Bay Area today.  The tower was almost 100 years old, the Camp Fire killed 88 people.  CalFire would not comment, saying the Camp Fire is under investigation.  PG&E is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Signet (SIG), the parent company of Kay Jewlers, shares are spiraling lower today after reporting that, so far in 4Q, the Jewler is seeing a, “more competitive environment as department stores continue to invest in the category and consumers are highly responsive to value.” As a result of this, Signet will not release any additional promotional activity in 4Q to support holiday sales. Signet is not rated in our Global Top Stock Ideas.
  • SimCorp A/S (JSE: SIM) shares are rising after announcing that it has signed, “a very large 8-year subscription license agreement,” with an Asian investment company for the use of its Dimension product. CEO Klaus Holse said that the agreement will strengthen the company’s position in Asia, where they have signed five new clients since 2016. The total realization value of the contract will depend on whether certain milestones are completed. SimCorp is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas. 
  • Steinhoff International Holdings NV (DB: SNH) shares are plummeting after PricewaterhouseCooper (PwC) announced that a forensic audit of the South African retail holding company will be delayed. The announcement by PwC comes exactly a year after Steinhoff disclosed accounting irregularities, leading to the resignation of its CEO and sending the company into crisis. The findings of the forensic audit will not be disclosed until February, as per PwC. Steinhoff is not rated in our Global Top Stock Ideas.
  • Tesla (TSLA) will start production at its new Shanghai facility in the second half of 2019.  The new factory, dubbed “Gigafactory 3”, will be the biggest ever foreign owned manufacturing facility in Shanghai.  Local officials visited the project yesterday, asking Tesla to accelerate construction, according to a message a release from local officials. Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Toro (TTC) announced guidance today for the full year that disappointed the market, coming below the lowest estimate.   Toro sees full year EPS of USD$2.90-2.95 while consensus ranges from USD$3.00-3.03.  Toros sees full year adjusted EPS of 48-50 cents while consensus is 52-53 cents.  Toro is rated “Top Buy” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
     

US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -3.67 basis points to 2.75%
  • US 5-Year Treasury Bonds are higher with yields down -3.72 basis points to 2.74%
  • US 10-Year Treasury Bonds are higher with yields down -2.35 basis points to 2.89%
  • The US Treasury 2s-5s Spread has narrowed 0.04 basis points to -0.01%
  • The US Treasury 2s-10s Spread has widened 1.32 basis points to 0.13%
  • US Treasury 5s-10s Spread has widened 1.37 basis points to 0.14%

Currencies

  • EUR€ is up 0.344% against the USD$ in after hours to 1.1383
  • GBP£ is up 0.401% against the USD$ in after hours to 1.2785
  • CHF is up 0.469% against the USD$ in after hours to 1.007
  • JPY¥ is down 0.477% against the USD$ in after hours to 112.65

Commodities

  • WTI Crude is down -2.65% to USD$51.49/bbl with the Brent-WTI spread up USD$0.31 to USD$7.67/bbl
  • Gold is little changed 0.05% to USD$1237.91/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
Weyerhaeuser Co Real Estate 26.7 6.45%            2,849,040
Hewlett Packard Enterprise Co Information Technology 15.1 6.45%            6,450,601
Kimco Realty Corp Real Estate 15.9 5.31%            1,986,861
Discovery Inc Communication Services 28.7 4.73%            1,493,313
Take-Two Interactive Software Inc Communication Services 112 4.44%                916,920
 
Underformers Sector Price 1D % Chg Volume
SVB Financial Group Financials 244 -8.85%                685,283
TechnipFMC PLC Energy 23.7 -7.72%            1,495,821
Brighthouse Financial Inc Financials 40 -7.70%            1,092,113
Cimarex Energy Co Energy 83.6 -6.82%                559,073
Concho Resources Inc Energy 132 -5.91%                623,540