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US stocks rise after approaching bear market territory intraday, WTI below $46

Dec 27, 2018

 

US Markets End of Day Snapshot

  • US stocks fell early in the day, staring at bear market territory, then bounced off the lows to rally into the close
  • The S&P 500 finished up 0.86%, Nasdaq Composite up 0.38%, and Russell 2000 up 0.15%
  • WTI is trading at $45.65, down 1.25% today
  • US initial jobs claims for last week came at 216k, meeting consensus
  • The Euro Stoxx 50, the main stock index for EU marketsm has fallen 20.7%, into bear market territory, since its peak in November 2017; the market is at a level last seen in late 2016; European stocks are on pace for their worst year since 2008 with outflows of approximately USD$70 billion from European mutual funds
  • According to investment research firm AJ Bell, there have been 17 5%+ trading days for the S&P 500 since 1970.  Of those 17, 8 happened during the period of 2007 to 2009 while another 3 happened during the period of 2000-2003 -- AJ Bell suggests yesterday’s Boxing Day doesn’t remove the risk that we may be entering a bear market for the S&P 500
  • Materials (+1.85%), Industrials (+1.24%), and Financials (+1.11%) stocks were the top performers in the S&P 500 today
  • Telecom (+0.53%), Consumer Discretionary (+0.24%), and Real Estate (+0.24%) stocks were the worst performers in the S&P 500 today
  • Investor sentiment for US stocks finished positive with the advance/decline ratio for the S&P 500 closing at 4.81x
  • 1 stock in the S&P 500 hit 4-week highs while 334 stocks reached 4-week lows
  • 0 stocks in the S&P 500 closed overbought while 48 stocks closed oversold according to the 16-day RSI Measure
  • 12 stocks in the Nasdaq Composite hit 4-week highs while 493 stocks reached 4-week lows
  • 45 stocks in the Nasdaq Composite closed overbought while 882 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed down 0.45 points today to 29.96 after closing at 30.41 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Amazon.com Inc. (AMZN) and Walmart Inc. (WMT) may face headwinds in India after the country tightened its rules for foreign investment in e-commerce companies. India’s Trade Ministry passed measures on Wednesday that will require all e-commerce companies to treat vendors equally to prevent predatory pricing and deep discounts that reportedly threatened the country’s domestic retail industry. Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas. Walmart is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas.
  • RBC is warning its clients that gaming chips manufactured by Advanced Micro Drives Inc. (AMD) and NVIDIA Corporation (NVDA) are facing falling prices on secondary platforms like Newegg, Amazon, and eBay. RBC detailed in a note to clients that falling chip prices could be indicative of a downturn in the gaming business or a result of a cooling cryptocurrency mining industry. AMD is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. NVIDIA is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Apple Inc. (AAPL) will be the best performing FAANG stock in 2019, according to notable analyst Gene Munster. Munster believes that Apple will focus on revenue and earnings growth rather than iPhone sales in 2019 to deliver value to shareholders. With just a few days left in 2018, Apple is the second-worst performing company in the FAANG group. 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.
  • Ashland Global Holdings (ASH) reaffirmed its outlook going into 2019, seeing full year 2019 adjusted EPS of USD$3.10-3.40.  Ashland Global Holdings sees 1Q 2019 EPS coming 5-15 cents.  Ashland Global Holdings expects the divesture of its Composites division to be completed by June 2019, with proceeds of ~USD$1 billion to be used for debt reduction.  Ashland Global Holdings is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Banca Carige SpA (BIT: CRM) shares are plunging after its largest shareholder blocked a planned share sale to boost bank equity.  Malacalza Investimenti owns 27.5% of the bank and blocked the 400-million-euro sale of share at a December 22nd shareholders meeting.  It is not clear how Banca Carige will proceed.  Banca Carige is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Brunswick Corp. (BC) said it has been granted exclusion for its 40, 50 and 60 hp Mercury engines manufactured in China from section 301 tariffs.  These exclusions will help Brunswick’s 2019 net pretax profit.  The negative impact on pretax profits in 2019 will be USD$17-22mn, down from USD$30-35mn.  Brunswick is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • DBV Technologies S.A. (ENXTPA: DBV) shares are trading higher by double-digits after plunging 70% on December 20th following its withdrawal of a US regulatory application for its peanut allergy patch for children.  Today, Gilbert Dupont analyst Jamila El Bougrini said that, “This price decline represents an opportunity and entry point for investors.” Gilbert Dupont maintains a buy recommendation for DBV. DBV is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas. 
  • Deutsche Bank AG (DB: DBK) will issue a loan of 349mm euro for the country of Ukraine to inject into its budget. The loan is being issued to Ukraine in two tranches; tranche A is worth 52.2mm euro with a 4-year maturity while tranche B is worth 296.1mm euro with a 10-year maturity and a 4.5-year grace period. Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Dominion Energy (D) had reviewed the final mergers documents from the South Carolina Public Service Commission regarding its SCANA (SCG) takeover and believes the economics of the deal are intact, according to a note from Guggenheim Research today.  The deal should be +3% accretive for Dominion under moderate synergy assumptions, Guggenheim highlights.  Dominion Energy is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  SCANA is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Earthstone Energy (ESTE) saw its price target cut yesterday at Imperial Capital.  Earthstone Energy’s price target was cut to USD$8 from USD$12.  The cut came in the wake of Earthstone’s decision to cancel its purchase of Sabalo Holdings.  Earthstone Energy is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas
  • Facebook’s (FB) Instagram accidentally released an update to its application that introduced a redesigned horizontal news feed that replaced vertical scrolling. The small number of users to receive and implement the update reportedly took to social media to complain about the redesign. Instagram has since rolled back the update and said that it was only intended as, “a very small test.” Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas. 
  • JD.com (JD) will restructure its JD Mall business unit into three different units going forward. The restructuring of JD.com’s most profitable business unit comes as management attempts to assure investors that the firm is not heavily reliant on Founder Liu Qiangdong, who was recently arrested in August on suspicion of rape. JD.com is rated “Top Short” in our China All-Cap Global Top Stock Ideas.  
  • NEC (TSE: 6701) has agreed to pay 8 billion Danish kroner (USD$1.2 billion) for KMD Holdings (NZSE: KMD).  NEC is making the acquisition to expand its services offerings in Europe.  KMD gives NEC entry into lucrative government services contracts.  NEC is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas.  KMD Holdings is not rated in our Global Top Stock Ideas.
  • Royal Caribbean Cruises (RCL) is searching for a crew member feared to have fallen overboard during one of its cruises.  A British entertainer working on a Royal Caribbean ship did not report to work and is seen on camera footage on the ship’s dock area and then not again, leading to conclude he fell overboard.  A search is underway.  Royal Caribbean Cruises is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Sinopec (SEHK: 386) trading unit has suspended 2 executives after the unit incurred losses.  The Sinopec unit Unipec handles the trading of crude for the giant refining company and is very active in world markets.  The executives were said to be suspended for “work reasons” without any further information.  Many trading firms were poorly positioned during the recent crude weakness.  Sinopec is rated “Attractive” in our China All-Cap Global Top Stock Ideas. 
  • Sound Energy (AIM: SOU) shares are surging after reporting that wireline logs at eastern Morocco's TE-10 permit indicate that there is a presence of gas-bearing sands. Sound Energy is trading higher intraday by the most in 2 weeks on the news. Sound Energy is not rated in our Global Top Stock Ideas.
  • Tesla Inc. (TSLA) is, “poised to generate improved profitability and cash flow,” which, “puts the risk of a capital raise in the background for now,” wrote Wedbush analyst Daniel Ives in a note to clients. Wedbush forecasts a price target of USD$440/share for the electric car maker while maintaining an outperform rating. Ives added in his note to clients that Tesla, “has turned the corner on Model 3 production,” and, “demand looks very strong into 2019 and beyond based on underlying drivers for the electric vehicle market.” Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Vinci SA (ENXTPA: DG) has announced it will acquire London’s Gatwick Airport.  Vinci will pay USD$3.7 billion for 50.1%  of the airport as it was anxious to add to its portfolio.  Sovereign wealth funds from Abu Dhabi and Australia are selling.  Vinci is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas
  • Visa (V) has agreed to pay 61 pence per share for all of Earthport (LSE: EPO).  The deal values Earthport at 198 million pounds on a fully diluted basis.  Visa is paying a 250% premium for Earthport.  Visa is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  Earthport is not rated on our Global Top Stock Ideas.

 

US Treasuries

 

  • US 2-Year Treasury Notes are higher with yields down -4.44 basis points to 2.57%
  • US 5-Year Treasury Bonds are higher with yields down -2.33 basis points to 2.62%
  • US 10-Year Treasury Bonds are higher with yields down -2.52 basis points to 2.78%
  • The US Treasury 2s-5s Spread has widened 2.11 basis points to 0.05%
  • The US Treasury 2s-10s Spread has widened 1.92 basis points to 0.21%
  • US Treasury 5s-10s Spread has narrowed 0.19 basis points to 0.16%
     

Currencies

  • EUR€ is up 0.749% against the USD$ in after hours to 1.1438
  • GBP£ is up 0.174% against the USD$ in after hours to 1.2655
  • CHF is up 0.826% against the USD$ in after hours to 1.0126
  • JPY¥ is down 0.269% against the USD$ in after hours to 111.07

Commodities

  • WTI Crude is down -3.48% to USD$44.61/bbl with the Brent-WTI spread up USD$1.19 to USD$8.32/bbl
  • Gold is up 0.62% to USD$1274.95/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
Micron Technology Inc Information Technology 37.9 3.37%          10,347,456
salesforce.com Inc Information Technology 140 3.33%            1,927,235
Lockheed Martin Corp Industrials 302 3.25%                508,118
Cooper Cos Inc/The Health Care 277 3.10%                143,307
Northrop Grumman Corp Industrials 261 2.98%                306,313
 
Underformers Sector Price 1D % Chg Volume
Discovery Inc Communication Services 28.7 -3.46%            1,492,625
Discovery Inc Communication Services 31.6 -3.01%            1,111,074
Newell Brands Inc Consumer Discretionary 23.8 -2.70%                334,707
LKQ Corp Consumer Discretionary 27.8 -2.67%            1,348,542
Perrigo Co PLC Health Care 64.1 -2.65%                708,060