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US stocks eke out slight gains as WTI plunges 7.4% today

Dec 18, 2018

 

US Markets End of Day Snapshot

  • US stocks started the day strong, up almost 2% before falling back and eking out slight gains by the close; the Federal Reserve decision tomorrow looms large on investors' list of concerns
  • 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
  • The Federal Reserve is scheduled to announce its interest rate decision tomorrow at 2pm EST
  • The S&P 500 finished up 0.01%, Nasdaq Composite up 0.45%, and Russell 2000 is down 0.07%
  • Oil plunged today, falling 7.4% with WTI quoted at USD$46.27 at 4:30pm EST  
  • Chine President Xi Jinping gave a speech marking 40 years of economic reform in China and mentioned no new reforms or stimulus, disappointing investors
  • Business sentiment in Germany, as measured by the Ifo Institute Business Climate index, declines to its lowest level in 2 years
  • Morgan Stanley Wealth Management highlights increased correlations between stocks and bonds, suggesting bonds may not provide a typical cushion against losses in stocks
  • Energy (-2.35%), Materials (+0.56%), and Telecom (+0.62%) stocks were the top performers in the S&P 500 today
  • Consumer Discretionary (+1.03%), Financials (-0.48%), and Tech (+0.86%) 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 0.91x
  • 3 stocks in the S&P 500 hit 4-week highs while 308 stocks reached 4-week lows
  • 0 stocks in the S&P 500 closed overbought while 98 stocks closed oversold according to the 16-day RSI Measure
  • 12 stocks in the Nasdaq Composite hit 4-week highs while 531 stocks reached 4-week lows
  • 62 stocks in the Nasdaq Composite closed overbought while 1241 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed  down -3.36 points today  to 21.16 after closing at 24.52 yesterday

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.
  • Blue Apron (APRN) shares fell over 8% today and have lost almost 90% since it IPO in June 2017.   Blue Apron, the meal kit delivery service, has seen investors fleeing steadily got months.  Blue Apron is rated “Unattractive” in our US SMID-Cap 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.
  • CNOOC-China National Offshore Oil Corp (SEHK 883) CEO said China’s offshore exploration business will be more open to international players.  He went on to add that authorities may propose new, more favorable policies for international players.  He said new blocks will be added to the international cooperation area.  CNOOC is rated “Attractive” in our China All-Cap 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.
  • Husky Energy (TSX: HSE) said it has received all regulatory approval needed to acquire Meg Energy (TSX: MEG).  Certain parts of the deal have been adjusted and 66 2/3% of Meg shareholders must tender before the acquisition can be completed.  The tender offer is open until January 16, 2019.  Neither Husky Energy nor Meg Energy is rated in our Global Top Stock Ideas. 
  • National Grid (LSE: NG) shares are falling after regulator Ofgem proposed gas and power rates than expected.  Ofgem chose pricing that will save consumers USD$8.2 billion.  Ofgem set the cost of equity return at 3% from 2021 on, a record low and half of previous levels.  Ofgem said in a statement “This will result in lower returns for investors and more savings for consumers” and National Grid shares fell in the wake of the statement.  National Grid is rated “Neutral” in our United Kingdom 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.  
  • Navient (NAVI) must face a state lawsuit alleging deceptive practices, according to a US district judge today.  The judge ruled Navient must face allegations from Pennsylvania’s Attorney General that the company steered borrowers having trouble with their student debt into repayment plans that benefitted Navient, not the borrowers.  Presently there is USD$1.45 trillion in outstanding student debt.  Navient is rated “Neutral” in our US SMID-Cap 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.
  • Take-Two Interactive Software (TTWO) was initiated today at Buckingham Research Group with a buy recommendation.  Buckingham Research set its price target at USD$130, implying a 27% upside from yesterday’s close.   Buckingham Research’s price target for Take-Two Interactive is on the low end of the range, with the average price target being a touch over USD$143 presently.  Take-Two Interactive Software is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology 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 -4.15 basis points to 2.65%
  • US 5-Year Treasury Bonds are higher with yields down -4.06 basis points to 2.65%
  • US 10-Year Treasury Bonds are higher with yields down -3.78 basis points to 2.81%
  • The US Treasury 2s-5s Spread has widened 0.09 basis points to 0%
  • The US Treasury 2s-10s Spread has widened 0.37 basis points to 0.17%
  • US Treasury 5s-10s Spread has widened 0.28 basis points to 0.17%

Currencies

  • EUR€ is little changed 0.15% against the USD$ in after hours to 1.1365
  • GBP£ is little changed 0.143% against the USD$ in after hours to 1.2642
  • CHF is little changed 0.02% against the USD$ in after hours to 1.0073
  • JPY¥ is down 0.275% against the USD$ in after hours to 112.52

Commodities

  • WTI Crude is down -7.3% to USD$46.24/bbl with the Brent-WTI spread up USD$3.2 to USD$9.22/bbl
  • Gold is up 0.3% to USD$1249.55/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
Darden Restaurants Inc Consumer Discretionary 111 5.02%                713,888
American Airlines Group Inc Industrials 38.4 4.68%            2,986,154
Nektar Therapeutics Health Care 39.3 4.63%            1,060,169
CBRE Group Inc Real Estate 43.1 4.28%                904,093
NetApp Inc Information Technology 67.4 4.06%            1,835,903
 
Underformers Sector Price 1D % Chg Volume
Philip Morris International Inc Consumer Staples 87 -7.65%            2,711,778
PPL Corp Utilities 30.7 -6.64%            3,966,135
Biogen Inc Health Care 327 -5.86%            1,106,303
PG&E Corp Utilities 26.8 -5.81%            3,392,778
Anadarko Petroleum Corp Energy 53.7 -4.94%            1,709,522