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US stocks catch a bid and rally broadly while oil plunges over 5%

Dec 18, 2018

 

Market data as of 1230pm EST

US Market Snapshot

  • US stocks are rallying since the open after closing at a 14 month low yesterday, with investors bidding up stocks hoping the Federal Reserve will take a dovish tone tomorrow
  • President Trump warned the Federal Reserve to avoid "yet another mistake" in raising interest rates as the Fed considers what move to make-if any-tomorrow when it releases its decision on the Fed Funds rate
  • Oil has been trading lower all morning and WTI is quoted 5% down at USD$47.42  
  • The S&P 500 is currently up 0.56%, Nasdaq Composite is up 1.04%, and Russell 2000 is up 0.62%
  • Chine President Xi Jinping gave a speech marking 40 years of economic reform in China and mentioned no new reforms or stimulus, disappointing investors
  • Morgan Stanley Wealth Management highlights increased correlations between stocks and bonds, suggesting bonds may not provide a typical cushion against losses in stocks
  • A survey of money managers by Bank of America suggests they are overly defensive with disproportionate portfolio allocations to bonds – the survey suggests there was a 23 pt change in allocations to bonds M/M in December which would be the largest one-month rotation in the history of the Bank of America global fund manager survey
  • The Federal Reserve is scheduled to announce its interest rate decision tomorrow at 2pm EST
  • Real Estate (+1.47%), Materials (+1.47%), and Industrials (+1.42%) stocks are the top performers in the S&P 500 today
  • Utilities (+0.1%), Consumer Staples (-0.09%), and Energy (-1.06%) stocks are the worst performers in the S&P 500 today
  • Investor sentiment for US stocks is positive with the advance/decline ratio for the S&P 500 currently at 2.25x
  • 3 stocks in the S&P500 are at 4-week highs while 308 stocks are at 4-week lows
  • 0 stocks in the S&P 500 are overbought while 98 stocks are oversold according to the 16-day RSI Measure
  • 12 stocks in the Nasdaq Composite are at 4-week highs while 531 stocks are at 4-week lows
  • 62 stocks in the Nasdaq Composite are overbought while 1241 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently  moving down at 21.16 from yesterday's close of 24.52
     

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Apple (AAPL) will introduce a technical fix to its Apple Pay app to satisfy Swiss regulators.  The technical fix will stop Apple Pay from interrupting payments with the Twint app.  With this action from Apple, Swiss authorities will suspend its investigation into 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.
  • A Brazilian Superior Labor court has revoked the regional labor court ruling allowing the Embraer (ERJ)/Boeing (BA) commercial aviation JV.  The judge said these negotiations are not within the purview of labor courts- the allegations were that the deal could cost Brazil jobs.  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 Industrials Global Top Stock Ideas.
  • CBS Corporation (CBS) released a statement reporting that it completed its investigation of former Chairman and CEO Leslie Moonves. The investigation concluded that there were grounds to terminate Moonves. Additionally, Moonves’, “willful and material misfeasance, violation of Company policies, and breach of his employment contract,” will bar him from receiving severance. CBS is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Darden Restaurants (DRI) reports FY2Q2019 financials that beat analyst estimates while increasing its profit guidance for FY2019. Darden generated EPS of USD$0.92/share in FY2Q2019 while analysts’ consensus called for USD$0.91/share. Darden also raised its FY2019 EPS guidance from between USD$5.52/share and USDA$5.65/share to between USD$5.60/share and USD$5.70/share. Darden 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.
  • FactSet (FDS) shares are trading lower despite reporting FY1Q2019 EPS that beat expectations and maintaining its guidance for FY2019. FactSet delivered an EPS of USD$2.35/share in FY1Q2019 while analysts expected USD$2.29/share. FactSet did not increase its guidance for the full-year, which seemed to disappoint investors. FactSet is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • Flowserve (FLS) is being downgraded at Morgan Stanley from equal-weight to underweight. Morgan Stanley also lowered its price target for Flowserve from USD$51/share to USD$38/share. Flowserve is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.
  • Japan has agreed to spend an additional USD$10bn on Lockheed Martin (LMT) F-35 jet fighters, increasing its pre-existing order for 42 units to 147 units. The move will make Japan Lockheed Martin’s largest customer outside of the US. Lockheed Martin is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Navistar (NAV) shares are trading higher after reporting FY4Q2018 financials and FY2019 guidance that beat analyst expectations. Navistar generated EPS of USD$1.89/share in FY4Q2019 while analysts’ consensus called for USD$1.74/share. Navistar also reported FY2019 revenue guidance of between USD$10.75bn and USD$11.25bn while analysts’ consensus called for just USD$10.57bn. Navistar is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.  
  • Norfolk Southern (NSC) is being upgraded at JP Morgan from neutral to overweight. JP Morgan also raised its price target for Norfolk Southern from USD$198/share to USD$203/share, implying a 38% upside from yesterday’s closing price. Norfolk Southern is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Oracle (ORCL) reported 2Q adjusted revenue of USD$9.57 billion, beating consensus of USD$9.52 billion.  Oracle 2Q adjusted EPS of 80 cents came above 78 cents consensus.  2Q cloud revenue was USD$6.64 billion while service revenue was 817mn.  Oracle 2Q operating margin was 43%.  Oracle sees revenue growing 2-4% in the coming quarter and higher in the second half of 2019.  Oracle is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Phillip Morris Intl (PM) is being downgraded at Credit Suisse, who cut its recommendation for the tobacco manufacturing company from neutral to underperform. Additionally, Credit Suisse slashed its price target for Phillip Morris from USD$92/share to USD$74/share, implying a 9.1% decrease from Monday’s close. Phillip Morris is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Sprint (S) and T-Mobile (TMUS) received national security approval for their merger.  The Committee on Foreign Investment in the US has approved the USD$26 billion merger.  The companies still need approval from the US FCC and Department of Justice anti-trust division.  Sprint is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.  T-Mobile US is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Tilray Inc. (TLRY) shares are soaring after announcing that it has agreed to a partnership with Swiss drug giant Novartis AG (TCK) to develop and distribute medical marijuana in legal jurisdictions around the world. The partnership specifically concerns non-smokable marijuana products. Tilray is not rated in our Global Top Stock Ideas. Novartis is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas. 
  • Twitter (TWTR) said it is investigating unusual traffic that may be from state-sponsored hackers.  Twitter also said a security firm told it hackers may also have tried to use the platform to steal data.  Twitter said it has seen unusual activity from IP addresses in China and Saudi Arabia that could be hackers.  Twitter said it has informed law enforcement.  Twitter is rated “Attractive” in our US Large-cap Global Top stock Ideas and “Top Buy” in our US Information technology Global Top Stock Ideas.

 

US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -2.9 basis points to 2.66%
  • US 5-Year Treasury Bonds are higher with yields down -2.71 basis points to 2.66%
  • US 10-Year Treasury Bonds are higher with yields down -2.52 basis points to 2.83%
  • The US Treasury 2s-5s Spread has widened 0.19 basis points to 0%
  • The US Treasury 2s-10s Spread has widened 0.38 basis points to 0.17%
  • US Treasury 5s-10s Spread has widened 0.19 basis points to 0.17%

Currencies

  • EUR€ is currently little changed against the USD$ at 1.136
  • GBP£ is currently up 0.174% against the USD$ to 1.2646
  • CHF is currently little changed against the USD$ at 1.0069
  • JPY¥ is currently down 0.23% against the USD$ to 112.57

Commodities

  • WTI Crude is currently down -5.35% to USD$47.21/bbl with the Brent-WTI spread up USD$2.62 to USD$9.04/bbl
  • Gold is currently little changed 0.22% to USD$1248.62/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
General Electric Co Industrials 7.94 5.10%            8,883,604
Darden Restaurants Inc Consumer Discretionary 111 4.56%                225,043
CBRE Group Inc Real Estate 43.1 4.11%                230,082
Boeing Co/The Industrials 343 4.10%                366,016
Lennar Corp Consumer Discretionary 43 3.67%                310,333
 
Underperformers Sector Price 1D % Chg Volume
Biogen Inc Health Care 327 -5.41%                313,397
PPL Corp Utilities 30.7 -5.11%            1,181,887
Helmerich & Payne Inc Energy 61.2 -3.73%                  79,968
Philip Morris International Inc Consumer Staples 87 -3.56%                658,606
WellCare Health Plans Inc Health Care 249 -3.23%                  74,115