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US stocks lower but well off earlier lows as Fed considers rate hike

Dec 17, 2018

 

Market data as of 12:15pm EST

US Market Snapshot

  • US stocks are lower midday but have come up from lower levels at the open; the Fed decision due Wednesday plus simmering trade concerns remain front and center for investors  
  • The Federal Reserve's FOMC will meet this week and announced its rate hike decision Wednesday afternoon as President Trump complains in a tweet that it's "incredible" that the Fed is considering raising interest rates
  • WTI crude traded below USD$50 today and is presently down 1.9% at USD$50.25
  • The S&P 500 is currently down 0.09%, Nasdaq Composite is up 0.11%, and Russell 2000 is up 0.43%
  • According to Bloomberg, the NTM P/E for the S&P500 dropped nearly 4 pts so far this year -- the S&P500 NTM P/E has only contracted a greater amount 6 times since this data has been recorded with a bear market in 5 of those 6 years 
  • SPDR S&P500 ETF (SPY) saw positive fund flows of USD$1.46 billion last week, an increase of +0.6% in total fund assets 
  • Emerging markets stocks ETFs experienced net fund flows of +USD$948.1 million – the 9th straight week of positive fund flows
  • Telecom (+0.36%), Financials (+0.36%), and Materials (+0.17%) stocks are the top performers in the S&P 500 today
  • Consumer Staples (-0.69%), Real Estate (-1.54%), and Utilities (-1.59%) stocks are the worst performers in the S&P 500 today
  • Investor sentiment for US stocks is neutral with the advance/decline ratio for the S&P 500 currently at 1.03x
  • 12 stocks in the S&P500 are at 4-week highs while 186 stocks are at 4-week lows
  • 4 stocks in the S&P 500 are overbought while 71 stocks are oversold according to the 16-day RSI Measure
  • 20 stocks in the Nasdaq Composite are at 4-week highs while 405 stocks are at 4-week lows
  • 62 stocks in the Nasdaq Composite are overbought while 914 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently little changed at 21.16 from last week's close of 21.63

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Alphabet’s (GOOGL) Google announced a USD$1 billion expansion in New York City.  Google will establish a new NYC campus called Google Hudson Square which will be in addition to its Google Chelsea campus.  Google will double the number of employees in NYC post-expansion.  Alphabet is rated “Neutral” in both our US Large-Cap and US Information Technology Global Top Stock Ideas.   
  • Amazon.com Inc. (AMZN) is stressing to investors that strikes at two of its German logistics sites will not impact holiday deliveries in Germany. Roughly 350 Amazon employees are striking for better pay and working conditions. Germany is Amazon’s second-largest market outside of the US. Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • BHP Group (ASX: BHP) declared a special dividend of USD$1.02 per shares to be pain January 30th for holders January 11th.  BHP’ special dividend represents the USD$5.2 billion residual balance after selling onshore US assets and buying back shares.  After the dividend payout BHP will have returned USD$21 billion over the last 2 years.  BHP Group is rated “Attractive” in our Australia Large-Cap Global Top Stock Ideas.
  • Bristol-Myers Squibb Co. (BMY) is reportedly nearing a deal to sell its over-the-counter unit to Taisho Pharmaceutical Holdings Co. (TSE: 4581), according to people familiar with the matter. The deal is reportedly valued at about USD$1.6bn. Bristol-Myers is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. Taisho Pharmaceutical Holdings is not rated in our Global Top Stock Ideas.
  • Embraer’s (ERJ) approved its Commercial Aviation JV with Boeing (BA), it announced.  Embraer said the value attributed by the parties to the JV is USD$5.2 billion.  The new JV will hold 100% of the commercial aviation business.  The deal still needs to be approved by the Brazilian government.  Embraer is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas.  Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Globalstar (GSAT) shares are soaring after announcing that it settled its outstanding litigation. Additionally, Globalstar received approval for its 2.4GHz terrestrial spectrum by Third Generation Partnership Project (3GPP). “3GPP standardization represents an important milestone in the company’s spectrum efforts,” said Globalstar executive chairman Jay Monroe. Globalstar is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas. 
  • Goldman Sachs (GS) is facing its first charges in Malaysia in the 1MDB scandal.  Authorities are alleging that Goldman Sachs misled investors when it sold 1MDB bonds since it knew the proceeds would be misappropriated.  Authorities are seeking fines well above the USD$2.7 billion of misused funds and USD$600mn is fees generated on the transaction.  Goldman Sachs blames the scandal on “rogue employees”.  Goldman Sachs is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Hennes & Mauritz (OM: HM B) reported sales figures that as it reduces its large inventory.  H&M said sales rose 12% to 56.4 billion kroner (USD$6.2 billion) while consensus was for 56.1 billion kronor.  H&M did not report profitability and analysts are questioning how much discounting H&M had to do in order to move the inventory.  H&M will report full results on January 31st.   Hennes & Mauritz is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Johnson & Johnson (JNJ) shares gave up roughly USD$40bn in market value last week after Reuters reported that the consumer brands group knew its baby powder could contain traces of asbestos for at least 40 years. Reuters cites documents from a Missouri court case that awarded USD$4.7bn to 22 women who developed ovarian cancer from Johnson & Johnson products. Johnson & Johnson has since called the story, “an absurd conspiracy theory.” Johnson & Johnson is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Lululemon Athletica (LULU) was upgraded today at Stifel to buy from hold.  Lululemon Athletica’s price target of USD$151 was maintained.  Stifel expects Lululemon Athletica double-digit sales growth to continue and sees upside to consensus estimates for 2019.  Lululemon Athletica’s revenue targets are “low hurdles”, according to the report.  Lululemon Athletica is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Molina Health Inc. (MOH) and Centene Corp (CNC) shares are seeing sharp losses after a December 14th court ruling may result in Obamacare being overturned. Ana Gupte, a health-care analyst with Leerink, said that these two companies would be the hardest hit if the court ruling stands. Molina Health is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas. Centene Corp is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas. 
  • Netflix Inc. (NFLX) shares still have strong upside potential, according to MKM Partners. In a note to clients, MKM Partners said that Netflix’s fundamentals and earnings are, “as strong as ever,” while reaffirming its buy rating and USD$415/share price target. As of Friday’s close, Netflix shares are down more than 30% since October. Netflix is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Packaging Corporation (PKG), Westrock Company (WRK), and International Paper Company (IP) shares are all falling today after November data signaled headwinds for the packaging industry, even with the upcoming busy holiday season. Box shipments in November were nearly flat y/y while data also signaled a larger-than-normal inventory increase. Packaging Corporation is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. Westrock is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. International Paper is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • WellCare Health Plans (WCG) reports guidance for FY2019 and the remainder of FY2018 that slightly misses analysts’ consensus. WellCare forecasts adjusted EPS of between USD$13.15/share and USD$13.40/share, the midpoint of which misses analysts’ consensus of USD$13.36/share. WellCare also reaffirmed adjusted EPS guidance of between USD$10.90/share and USD$11.00/share for FY2018 while analysts’ consensus is USD$11.00/share. WellCare is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

 

US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -1.86 basis points to 2.71%
  • US 5-Year Treasury Bonds are higher with yields down -2.21 basis points to 2.70%
  • US 10-Year Treasury Bonds are higher with yields down -2.17 basis points to 2.86%
  • The US Treasury 2s-5s Spread has narrowed 0.35 basis points to -0.01%
  • The US Treasury 2s-10s Spread has narrowed 0.31 basis points to 0.15%
  • US Treasury 5s-10s Spread has widened 0.04 basis points to 0.16%

Currencies

  • EUR€ is currently up 0.31% against the USD$ to 1.1341
  • GBP£ is currently up 0.167% against the USD$ to 1.2604
  • CHF is currently up 0.519% against the USD$ to 1.007
  • JPY¥ is currently down 0.423% against the USD$ to 112.91

Commodities

  • WTI Crude is currently little changed 0.21% to USD$51.31/bbl with the Brent-WTI spread down USD$-0.82 to USD$7.65/bbl
  • Gold is currently up 0.33% to USD$1243.09/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

On Mobile/Tablet scroll to the right.

Outperformers Sector Price 1D % Chg Volume
Alexion Pharmaceuticals Inc Health Care 123 3.83%                182,640
Applied Materials Inc Information Technology 36.5 3.31%            1,154,259
Stanley Black & Decker Inc Industrials 127 3.17%                108,310
Leggett & Platt Inc Consumer Discretionary 38.8 3.13%                  94,556
Western Digital Corp Information Technology 45.5 2.91%                782,127
 
Underperformers Sector Price 1D % Chg Volume
Centene Corp Health Care 142 -5.38%                412,962
Xerox Corp Information Technology 26.9 -5.36%                508,881
PG&E Corp Utilities 26.8 -5.34%            1,098,649
Westrock Co Materials 46.4 -5.18%                260,775
Packaging Corp of America Materials 96.5 -4.68%                  79,788