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Risk-off rules US stocks today with renewed trade fears and weak jobs data

Dec 07, 2018

 

Market data as of 12:15pm EST

US Market Snapshot

  • Trade fears returned front and center for US stocks this morning after White House adviser Peter Navarro said tariffs on Chinese goods would rise at the end of the present 90-day pause if no agreement is reached, his comments turned market lower
  • The S&P 500 is currently down 1.45%, Nasdaq Composite is down 1.99%, and Russell 2000 is down 0.69%
  • US Non-farm payrolls came at 155k for November, well below consensus of 198k
  • Average hourly earnings rose less than expected, growing 0.2% while 0.3% was expected
  • OPEC+ agreed to a production cut of 1.2 million bpd, above the 1 million expected 
  • Energy (+0.82%), Utilities (+0.63%), and Materials (-0.77%) stocks are the top performers in the S&P 500 today
  • Consumer Discretionary (-2.1%), Healthcare (-2.25%), and Tech (-2.52%) 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 0.24x
  • 22 stocks in the S&P500 are at 4-week highs while 215 stocks are at 4-week lows
  • 14 stocks in the S&P 500 are overbought while 11 stocks are oversold according to the 16-day RSI Measure
  • 39 stocks in the Nasdaq Composite are at 4-week highs while 207 stocks are at 4-week lows
  • 85 stocks in the Nasdaq Composite are overbought while 949 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently up 1.14 at 22.33 from yesterday's close of 21.19

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Akorn Inc. (AKRX) shares are falling after the Delaware Supreme Court ruled that a cancelled merger with Fresenius SE (DB: FRE) will not have to be consummated. The Delaware Supreme Court found that, prior to the deal’s closing, Akorn suffered a rapid downturn in its business, which triggered Fresenius to cancel the deal. Akorn is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.  Fresenius is rated “Neutral” in our European Large-Cap Global Top Stock Ideas
  • Altria Group (MO) has announced the purchase of a 45% equity stake in Canadian cannabis company Cronos (TSX: CRON) for USD$1.8bn. The USD$1.8bn price tag for a 45% equity stake in Cronos represents a per share price of CAD$19.00. Altria will be allowed to nominate four directors to Cronos’ board while Altria maintains an option to increase its stake in Cronos to 55%. As part of the deal, Altria will make Cronos its exclusive partner for pursuing cannabis ventures across the globe. Shares of other cannabis companies like Aurora Cannabis (TSX: ACB) and Tilray (TLRY) are trading higher on the news. Altria is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas. Cronos, Aurora Cannabis, and Tilray are not rated in our Global Top Stock Ideas.
  • Big Lots (BIG) provided guidance well below consensus and below the lowest estimate.  Big Lots see 4Q EPS USD$2.20-3.40 while present consensus is in a range of USD$2.87-2.96.  Big Lots sees comparable sales growth of 0-2%.  Full year EPS is expected to come USD$3.55-3.75.  Big Lots is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Boeing (BA) and Brazil’s Embraer (ERJ) had their deal halted by a federal judge in Sao Paulo.  The injunction was a surprise to both parties.  The judge said no deal can be finalized during the judicial recess in Brazil around the year-end holidays.  The ruling does not kill the deal between Boeing and Embraer, it just does not allow it to be concluded until the courts reopen in Brazil after the year-end recess.  Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.  Embraer is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas.
  • Chevron (CVX) announced it is increasing its spending budget by 9.3%, its first hike since 2014.  Chevron is hiking spending even in the face of falling oil prices.  Chevron will spend USD$20 billion this coming year as it doubles down on shale.  Chevron will increase its footprint in the Permian Basin in the coming year.  Chevron is the first of the supermajor oil producers to provide spending guidance.  Chevron is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Lululemon (LULU) posted strong same store sales growth but indicated it expects growth to slow.  Lululemon saw 3Q same store sales growth of 18%, well above 13.6 % consensus.  Lululemon said it expects growth to slow to high to middle single-digit growth.  Lululemon saw e=commerce sales rise 46%.  Lululemon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Momo Inc. (MOMO) is being downgraded at Morgan Stanley from overweight to equal-weight. In a note to clients, Morgan Stanley cited that Momo faces slowed economic growth from its top customers and intense competition as reasons for the downgrade. Additionally, Morgan Stanley slashed its price target for Momo by more than half, from USD$61/share to USD$30/share. Momo is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Ulta Beauty (ULTA) shares are sliding after reporting FY3Q2018 financial results that contained unexpected margin pressures. In what was otherwise an in-line earnings call (according to analysts), Ulta’s weaker than expected margins overshadowed, causing its stock to drop. Ulta cited salon investments, drag from a new distribution center, and channel/category poduct mix as reasons for the margin shortfall. Ulta is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Vail Resorts (MTN) shares are spiraling lower after reporting a deeper-than-expected loss in FY1Q2019. Vail Resorts observed a loss per share of USD$2.66 in FY1Q2019 while analysts expected a loss of USD$2.46/share. Driving Vail Resorts’ negative net income was its top-line sales of USD$220mm, which missed analysts’ consensus of USD$235mm. Vail Resorts is rated “Attractive” 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 -2.05 basis points to 2.73%
  • US 5-Year Treasury Bonds are higher with yields down -2.38 basis points to 2.72%
  • US 10-Year Treasury Bonds are higher with yields down -1.46 basis points to 2.88%
  • The US Treasury 2s-5s Spread has narrowed 0.33 basis points to -0.01%
  • The US Treasury 2s-10s Spread has widened 0.59 basis points to 0.14%
  • US Treasury 5s-10s Spread has widened 0.92 basis points to 0.15%

Currencies

  • EUR€ is currently little changed against the USD$ at 1.1388
  • GBP£ is currently down 0.313% against the USD$ to 1.2741
  • CHF is currently little changed against the USD$ at 1.0085
  • JPY¥ is currently little changed against the USD$ at 112.62
     

Commodities

  • WTI Crude is currently up 4.04% to USD$53.57/bbl with the Brent-WTI spread little changed USD$-0.11 to USD$7.98/bbl
  • Gold is currently up 0.58% to USD$1245.01/oz
     

 

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

S&P 500 Sector ETFs - Intraday

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

Russell 1000 Factor ETFs - Intraday

*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
Helmerich & Payne Inc Energy 61.2 3.92%                  99,985
Concho Resources Inc Energy 132 3.65%                142,664
Cimarex Energy Co Energy 83.6 3.58%                127,405
EOG Resources Inc Energy 105 3.57%                259,381
Twitter Inc Communication Services 31.3 3.43%            2,062,311
 
Underperformers Sector Price 1D % Chg Volume
Ulta Beauty Inc Consumer Discretionary 300 -10.34%                503,497
Cooper Cos Inc/The Health Care 277 -8.97%                  80,796
Hewlett Packard Enterprise Co Information Technology 15.1 -7.30%            1,486,574
American Airlines Group Inc Industrials 38.4 -7.15%            1,265,429
NVIDIA Corp Information Technology 157 -6.24%            1,983,485