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Looming government shutdown sending US stocks lower, quadruple-witching Friday boosts volumes

Dec 21, 2018

 

Market data as of

US Market Snapshot

  • US stops posted gains at the open but turned and having been falling since; the looming US government shutdown is fueling the risk-off sentiment today
  • Quadruple-witching Friday is the simultaneous expiration of futres and options contracts on the same day, this is pushing Dow Jones volume 107% above the recent average, S&P500 is 57% above while Nasdaq is 43% above
  • The S&P 500 is currently down 0.88%, Nasdaq Composite is down 1.99%, and Russell 2000 is down 1.8%
  • Chinese monetary authorities confirmed today that more fiscal and monetary stimulus will be coming in 2019; China will use the same limited, targeted stimulus as was done in 2018 
  • Jonathan Krinsky, the chief market technician at Baycrest Partners, suggests the S&P 500 may be reaching a bottom after the number of stocks in the S&P 500 above their 200-day moving average fell below 25% -- this is the first time since February 2016 that this happened and have historically been followed by a rally of +4.3% over the next 3-months (going back to 1990)
  • According, to Lipper data, US-focus mutual funds have seen outflows close to USD$81 billion for the two weeks ending December 19 – if the current trends hold, this would be the largest monthly outflow since 1992
  • President Trump is not budging in the budget showdown, saying he will not sign any funding bill that does not include funding for a border wall; a spending bill must be signed by midnight today to avoid a US government shutdown
  • Utilities (+0.78%), Consumer Staples (+0.09%), and Real Estate (-0.04%) stocks are the top performers in the S&P 500 today
  • Consumer Discretionary (-1.59%), Tech (-1.66%), and Telecom (-2.33%) 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 0.55x
  • 0 stocks in the S&P500 are at 4-week highs while 413 stocks are at 4-week lows
  • 0 stocks in the S&P 500 are overbought while 209 stocks are oversold according to the 16-day RSI Measure
  • 13 stocks in the Nasdaq Composite are at 4-week highs while 893 stocks are at 4-week lows
  • 41 stocks in the Nasdaq Composite are overbought while 1640 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently flat 28.35 from yesterday's close of 28.38

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Agenus (AGEN) and Gilead (GILD) announced they will form a partnership to work on immune-oncology therapies.  Agenus and Gilead said they will work together on up to 5 novel therapies, focused on the development and commercialization of them.  Agenus will receive USD$150mn when the deal closes and there is the potential for up to USD$1.7 billion in future fees.  Agenus is rated “Top Short” in our US SMID-Cap Global Top Stock Ideas.  Gilead is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Boeing (BA) won an order from Saudi Arabian Airlines’ low-cost carrier Flyadeal.  Flyadeal will acquire 50 narrow-body jets with a value of up to USD$5.9 billion.  Flyadeal will acquire 30 737 MAX with options to acquire 20 more.  Boeing is rated “Attractive” in our US Large-cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Bombardier Transportation (TSX: BBD.B) has entered into a contract for rolling stock with an undisclosed customer in Europe. The global mobility solutions provider announced today that the total order is valued at 437mm euros (USD$500mm). Bombardier is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.  
  • Campbell Soup (CPB) has names Mark Clouse as CEO effective January 22nd.  Mr. Clouse was previously CEO of Pinnacle Foods (PF) until it was acquired recently.  He has decades of experience in packaged foods and the chairman of the board said, “We are confident Mark is the right person…”.  Campbell Soup is rated “Neutral” in our US Large-cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • CarMax (KMX) shares are rising after reporting FY3Q2018 earnings that top analyst expectations despite a sales miss. CarMax reported EPS of USD$1.09/share in FY3Q2018 while analysts expected just USD$0.99/share. CarMax’s revenue of USD$4.30bn in FY3Q2018 missed analyst expectations of USD$4.33bn. CarMax is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Freeport-McMoRan (FCX) completed a deal with Indonesia giving the Indonesian government’s aluminum company majority ownership of the giant Grasberg copper and gold mine.  Indonesia will own 51.2% of the mine will Freeport’s local unit will hold the balance.  Freeport-McMoRan is rated “Attractive” in our US Large-cap Global Top Stock Ideas.
  • General Electric (GE) is being upgraded Vertical Research analyst Jeffrey Sprague, who has been ranked as the top analyst in the Institutional Investor poll on several occasions. Sprague upgraded General Electric to a buy rating while raising his price target from USD$10/share to USD$11/share. This is the first time Sprague has issued a buy rating for General Electric since April 2008. General Electric is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.
  • The US Federal Trading Commission is seeking public comment on applications submitted by Linde AG (DB: LNA) and Praxair Inc. to divest certain facilities to enable their prospective USD$80bn merger. The public comment period will extend through January 21st. If approved, the merger would create the world’s largest industrial gas supplier. Linde AG is rated “Attractive” European SMID-Cap Global Top Stock Ideas.  
  • Nike (NKE) reported fiscal 2Q earnings that handily beat expectations.  Nike 2Q EPS came at 52 cents while average consensus was for 46 cents.  Nike 2Q revenue came at USD$9.37 billion while consensus was USD$9.17 billion.  Revenue is China came at USD$1.54 billion, while consensus was for USD$1.43 billion.    Nike is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Perrigo Co. (PRGO) shares are falling the most intraday in more than 9 years after the generic drug maker announced an unexpected USD$1.8bn tax assessment. As a result of the tax assessment, Wells Fargo slashed its price target for Perrigo from USD$64/share to USD$46/share. Perrigo is not rated in our Global Top Stock Ideas. 
  • Qualcomm (QCOM) has won an injunction against Apple’s (AAPL) sales of older iPhones in Germany, very similar to that it was awarded in China.  Qualcomm’s press release says the German court granted the injunction because Apple is infringing on its intellectual property for power savings in smartphones.  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.
  • Stars Group (TSX: TSGI) shares are trading notably higher after winning the reversal of a USD$870mm judgment in a long-standing lawsuit with the State of Kentucky. The case will now be sent back to trial court to dismiss the case. Stars Group is not rated in our Global Top Stock Ideas.  Stars Group is not rated in our Global Top Stock Ideas
  • Zynga Inc. (ZNGA) will pay USD$560mm for an 80% stake in mobile games maker Sall Giant Games. Zynga will fund the purchase through USD$300mm of cash and USD$230mm of new common stock. Small Giant Games launched mobile game Empires & Puzzles 18-months ago and it has been the third-highest grossing game in the Google Play Store since. Zynga is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.

 

US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -3.17 basis points to 2.63%
  • US 5-Year Treasury Bonds are higher with yields down -2.74 basis points to 2.64%
  • US 10-Year Treasury Bonds are higher with yields down -1.81 basis points to 2.78%
  • The US Treasury 2s-5s Spread has widened 0.43 basis points to 0%
  • The US Treasury 2s-10s Spread has widened 1.36 basis points to 0.15%
  • US Treasury 5s-10s Spread has widened 0.93 basis points to 0.15%

Currencies

  • EUR€ is currently down 0.655% against the USD$ to 1.1371
  • GBP£ is currently down 0.213% against the USD$ to 1.2629
  • CHF is currently down 0.534% against the USD$ to 1.0067
  • JPY¥ is currently little changed against the USD$ at 111.41

Commodities

  • WTI Crude is currently up 0.42% to USD$45.82/bbl with the Brent-WTI spread down USD$-1.94 to USD$7.34/bbl
  • Gold is currently down -0.39% to USD$1254.91/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
NIKE Inc Consumer Discretionary 74.3 6.81%            4,321,931
CarMax Inc Consumer Discretionary 66.1 4.21%                652,330
Foot Locker Inc Consumer Discretionary 55.4 3.05%                522,839
Cboe Global Markets Inc Financials 107 2.89%                244,751
JM Smucker Co/The Consumer Staples 103 2.25%                292,779
 
Underperformers Sector Price 1D % Chg Volume
Perrigo Co PLC Health Care 64.1 -26.68%                944,567
Conagra Brands Inc Consumer Staples 32.3 -7.87%            1,995,982
Twitter Inc Communication Services 31.3 -5.50%            4,109,124
Fortinet Inc Information Technology 73.9 -5.27%                570,794
Netflix Inc Communication Services 289 -5.14%            2,919,811