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US stocks plunge to 17-month low as the VIX tops 30 for first time since February

Dec 21, 2018

 

US Markets End of Day Snapshot

  • US stocks plunged today as a littany of concerns weigh on investors-an impending US government shutdown, higher interest rates, slowing global growth, US-China trade-as the trading week comes to a close
  • 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
  • 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
  • The S&P 500 finished down 2.06%, Nasdaq Composite is down 2.99%, and Russell 2000 is down 2.56%
  • Utilities (-0.71%), Materials (-0.95%), and Energy (-1.05%) stocks were the top performers in the S&P 500 today
  • Consumer Discretionary (-2.58%), Tech (-2.99%), and Telecom (-3.07%) 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 0.11x
  • 0 stocks in the S&P 500 hit 4-week highs while 413 stocks reached 4-week lows
  • 0 stocks in the S&P 500 closed overbought while 209 stocks closed oversold according to the 16-day RSI Measure
  • 13 stocks in the Nasdaq Composite hit 4-week highs while 893 stocks reached 4-week lows
  • 41 stocks in the Nasdaq Composite closed overbought while 1640 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed up 1.73 points today to 30.11 after closing at 28.38 yesterday

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.
  • Air Transport Services (ATSG) share rose sharply after Amazon (AMZN) said it will lease 10 aircraft from the company.  These planes will be in addition to 20 planes Amazon has previously leased from Air Transport Services.  Amazon will lease 100 767-300 cargo jets and they will be operated by Air Services Group.  Air Transport Services is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials 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.
  • Danske Bank (CPSE: DANSKE) cut its 2018 earnings forecast, blaming the cut on the recent market slump.  Danske sees 2018 profit coming at 15 billion kroner (USD$2.3 billion), down from 16-17 billion kroner.  Danske said its revised guidance “remains subject to uncertainty).  Danske Bank is rated “Top Short” in our Global Top Stock Ideas.
  • Ford (F) has issued a safety recall for some F-150 and Super Duty pickup trucks.  The recall is for ~874,000 vehicles and relates to a engine block heater cable that, under certain conditions, can catch fire.  There have been 3 fires to date related to this recall.  Ford 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.
  • Hydrogenics (HYGS) shares surged today after Air Liquide SA (ENXTPA:AI) of France said it would pay a 50% premium for a minority stake.  Air Liquide will acquire an 18.6% stake in Hydrogenics, paying $5.80 per share.  Hydrogenics is a maker of fuel cells and Air Liquide is the largest supplier of hydrogen for fuel cells.  Hydrogenics is not rated on our Global Top Stock Ideas.  Air Liquide is rated “Neutral” in our European Large-Cap 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.
  • 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.
  • Tencent Holdings (TCEHY, SEHK: 700) shares rose on the news that China has restarted the new video game approval process.  Sina reports that China is working to issue licenses for those games that have already been approved, without saying which games those are.  Tencent is rated “Attractive” in our China All-Cap 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 -3.58 basis points to 2.63%
  • US 5-Year Treasury Bonds are higher with yields down -3.92 basis points to 2.62%
  • US 10-Year Treasury Bonds are higher with yields down -2.7 basis points to 2.77%
  • The US Treasury 2s-5s Spread has narrowed 0.34 basis points to -0.01%
  • The US Treasury 2s-10s Spread has widened 0.88 basis points to 0.14%
  • US Treasury 5s-10s Spread has widened 1.22 basis points to 0.15%

Currencies

  • EUR€ is down 0.751% against the USD$ in after hours to 1.136
  • GBP£ is down 0.221% against the USD$ in after hours to 1.2628
  • CHF is down 0.741% against the USD$ in after hours to 1.0046
  • JPY¥ is little changed 0.036% against the USD$ in after hours to 111.32

Commodities

  • WTI Crude is down -0.53% to USD$45.39/bbl with the Brent-WTI spread down USD$-1.93 to USD$7.26/bbl
  • Gold is down -0.34% to USD$1255.53/o

 

*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
NIKE Inc Consumer Discretionary 74.3 7.17%            7,934,126
CarMax Inc Consumer Discretionary 66.1 3.95%            1,711,183
ABIOMED Inc Health Care 332 2.11%                522,399
Foot Locker Inc Consumer Discretionary 55.4 1.75%            2,169,450
Cabot Oil & Gas Corp Energy 24.7 1.69%            5,462,627
 
Underformers Sector Price 1D % Chg Volume
Perrigo Co PLC Health Care 64.1 -29.28%            2,142,941
Conagra Brands Inc Consumer Staples 32.3 -8.77%            8,278,932
Twitter Inc Communication Services 31.3 -6.76%          10,557,842
Alexion Pharmaceuticals Inc Health Care 123 -6.51%            2,376,279
Facebook Inc Communication Services 139 -6.33%          17,831,740