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US stocks fall with government shutdown woes adding to rate hike concerns

Dec 20, 2018

 

Market data as of 12:15pm EST

US Market Snapshot

  • US stocks are retreating with losses accelerating after President Trump hardened his stance on his demand for border wall funding as part of appropriation bill to fund the government and avert a shutdown
  • With yesterday’s sell-off plus losses today, the S&P 500 is barreling towards its first formal “bear market” in a decade with the benchmark US index down nearly 15% since reaching its high in September 2018
  • Small-cap stocks are well into bear market territory with the Russell 2000 down over 23% from its high in early September
  • The S&P 500 is currently down 1.39%, Nasdaq Composite is down 2.01%, and Russell 2000 is down 1.77%
  • The US Justice Department has indicted 2 Chinese nationals and alleges they waged a decades-long economic espionage campaign, coordinating with Chinese state security agencies, infiltrating 45 US companies and government agencies
  • WTI crude fell sharply in morning trading and is 3.9% lower at $46.26
  • Utilities (+0.95%), Real Estate (-0.18%), and Financials (-0.65%) stocks are the top performers in the S&P 500 today
  • Energy (-2.02%), Consumer Discretionary (-2.35%), and Tech (-2.5%) 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 0.23x
  • 1 stock in the S&P500 are at 4-week highs while 341 stocks are at 4-week lows
  • 0 stocks in the S&P 500 are overbought while 146 stocks are oversold according to the 16-day RSI Measure
  • 14 stocks in the Nasdaq Composite are at 4-week highs while 740 stocks are at 4-week lows
  • 62 stocks in the Nasdaq Composite are overbought while 1304 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently moving up at 28.18 from yesterday's close of 25.58

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Accenture (ACN) reports an earnings beat and a revenue forecast with a midpoint that misses the average analyst estimate. Accenture generated an EPS of USD$1.96 in FY1Q2019 while analysts expected USD$1.85. Accenture sees FY2Q2019 revenue between USD$10.1bn and USD$10.4bn while analysts’ consensus calls for USD$10.31bn. Accenture is not rated in our Global Top Stock Ideas. 
  • Airbus (ENXTPA:AIR) is being investigated by the US Justice Department, according to a report in the French press.  The investigation would parallel investigations in France and England.  The press report said the company could face billions in fines as a result of the investigations.  Airbus is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Altria (MO) is in talks to acquire a stake in e-cigarette maker Juul, according to a report in Bloomberg.  Altria is going to buy a stake valued at USD$12.8 billion, the article reports.  If the investment is competed, it will value Juul at USD$38 billion making it the second most valuable private company behind Uber.  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.
  • Amazon (AMZN) has seen the number of Prime members who buy groceries with Amazon decline in 2018 compared with 2017 in the wake of its acquisition of Whole Foods.  This comes from a UBS survey of consumers.  UBS commented that this was surprising given the USD$13.7 billion it spent to acquire Whole Foods.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Apple (AAPL) is tweaking the software in its iPhones in Germany in an effort to head of a legal challenge from Qualcomm (QCOM), according to a report in the Financial Times.  Apple is making the move ahead of a ruling expected today in Munich.  Apple and Qualcomm are locked in a global legal battle over the royalties Apple pays Qualcomm for the use of its chips.  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.  Qualcomm is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Bank of America Corp. (BAC) Chairman and CEO Brian Monynihan appeared on Bloomberg Television on Wednesday and admitted, “We got a little too careful,” in reference to the company’s capital markets business, adding, “We lost some share in mid-size client M&A deals in the United States.” In response, Bank of America is giving its capital markets dealmakers to set out in search of opportunities to regain market share. Bank of America is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Carnival Corp. (CCL) shares are falling after the world’s largest cruise line provided disappointed guidance for its upcoming fiscal year. Carnival sees adjusted EPS for FY2019 of between USD$4.50 and USD$4.80, the midpoint of which misses analysts’ consensus estimates of USD$4.69. Carnival also estimated that it sees adjusted EPS of between USD$0.40 and USD$0.44 while analysts expect USD$0.44. Carnival is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Congara Brands Inc. (CAG) shares are plummeting the most in intraday trading in 15 years after reporting financials that largely missed slightly expectations. Congara reported revenue of USD$2.38bn in FY2Q2019 while analysts expected USD$2.41bn. Despite the sales miss, Congara reported adjusted EPS in FY2Q2019 of USD$0.67 while analysts expected just USD$0.56. Congara is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Large-Cap Global Top Stock Ideas. 
    Embraer (ERJ) finalized an order with Republic Airways (RJETQ) for 100 E175s.  The order has previously been announced and now the details have been completed.  As part of the deal Republic Airways can convert any number of the planes to Embraer’s E2 platform.  Embraer is rated “Neutral” in our Brazil All-Cap Global Top Picks.  Republic Airways is not rated in our Global Top Stock Ideas.
  • Facebook (FB) is being sued by Washington, DC over its privacy policies.  Facebook violated DC’s Consumer Protection regulations the suit alleges.  Facebook was lax in the oversight of third-party applications, according to the allegations.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Nike (NKE) is set to report earnings after the close today as the company’s stock nears bear market territory. Nike shares are down 19.8% since their YTD high of USD$86.04 on September 21st. Analysts expect Nike to report earnings between USD$0.45/share and USD$0.50/share. Nike is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Pier 1 (PIR) shares are tanking more than 30% after reporting comparable sales growth and financials that largely missed analyst expectations. Comparable sales in FY3Q2018 fell 10.5% while analysts expected comparable sales to fall just 2.9%. Lagging comparable sales growth drove Pier 1’s loss per share of USD$0.62 to substantially miss expectations of a USD$0.06 loss per share. Pier 1 is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas and “Top Short” in our US Consumer Discretionary Global Top Stock Ideas.
  • Walgreens Boots Alliance, Inc. (WBA) reports stronger-than-expected FY1Q2019 earnings, posting adjusted EPS of USD$1.46/share while Street consensus called for USD$1.43/share. Walgreens total group revenues rose slightly under 10% y/y to USD$33.8bn in FY1Q2019 while management guided fiscal year earnings growth of between 7% and 12%. Additionally, management discussed a plan to, “aggressively cut costs,” that will save the company USD$1bn/year within three years. Walgreens is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.

 

US Treasuries

 

  • US 2-Year Treasury Notes are lower with yields up 1.86 basis points to 2.66%
  • US 5-Year Treasury Bonds are lower with yields up 2.68 basis points to 2.64%
  • US 10-Year Treasury Bonds are lower with yields up 1.42 basis points to 2.76%
  • The US Treasury 2s-5s Spread has widened 0.82 basis points to -0.02%
  • The US Treasury 2s-10s Spread has narrowed 0.44 basis points to 0.1%
  • US Treasury 5s-10s Spread has narrowed 1.26 basis points to 0.12%
     

Currencies

  • EUR€ is currently up 0.694% against the USD$ to 1.1455
  • GBP£ is currently up 0.46% against the USD$ to 1.2668
  • CHF is currently up 0.458% against the USD$ to 1.01
  • JPY¥ is currently down 1.156% against the USD$ to 111.18
     

Commodities

  • WTI Crude is currently down -2.48% to USD$46.03/bbl with the Brent-WTI spread little changed USD$-0.07 to USD$8.29/bbl
  • Gold is currently up 1.44% to USD$1261.04/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
Newmont Mining Corp Materials 32.3 4.92%                632,372
HCP Inc Real Estate 28.8 1.94%                289,470
SCANA Corp Utilities 46.1 1.69%                118,027
Dominion Energy Inc Utilities 73.8 1.65%                549,804
PPL Corp Utilities 30.7 1.63%                390,089
 
Underperformers Sector Price 1D % Chg Volume
Twitter Inc Communication Services 31.3 -12.60%            3,246,013
Conagra Brands Inc Consumer Staples 32.3 -12.27%            1,106,013
Carnival Corp Consumer Discretionary 60.7 -9.60%                556,623
Helmerich & Payne Inc Energy 61.2 -6.18%                202,430
Norwegian Cruise Line Holdings Ltd Consumer Discretionary 51.6 -5.73%                174,165