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US stocks close mixed, ending shortened week marked by increased volatility

Dec 28, 2018

 

 

 

US Markets End of Day Snapshot

  • US stocks closed mixed with volume 25% below average levels, ending a holiday-shortened week marked by increased volatility
  • The S&P 500 finished down 0.12%, Nasdaq Composite up 0.08%, and Russell 2000 up 0.46%
  • Oil is trading 1.2% higher at $45.14 after it was reported that US crude inventories fell by only 46,000 barrels last week, the lowest weekly drop since 2011
  • According to an analysis of the S&P 500 cyclically adjusted P/E ratio (CAPE), S&P 500 stocks valuations are in-line with their long-run average : the spread between the CAPE Yield (inverse of the CAPE) minus the “real” yield for the US 10-year is at 2.64%, in-line with its average over the last 4 decades, which suggests the implied risk premium for the S&P 500 is  not low and that stocks are not “expensive” (please see our blog post CAPE ratio suggesting the S&P 500 may be a Buy)
  • The US government shutdown marches on, now in its seventh day with no indication of any deal to resolve the impasse in sight
  • January 1st will mark the Euro's 20th anniversary, the currency was launched January 1, 1999 by 10 countries; today 19 of 28 EU countries use the Euro
  • Consumer Discretionary (+0.3%), Real Estate (+0.22%), and Healthcare (+0.04%) stocks were the top performers in the S&P 500 today
  • Industrials (-0.32%), Materials (-0.61%), and Energy (-0.89%) 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 0.55x
  • 0 stocks in the S&P 500 hit 4-week highs while 13 stocks reached 4-week lows
  • 0 stocks in the S&P 500 closed overbought while 33 stocks closed oversold according to the 16-day RSI Measure
  • 10 stocks in the Nasdaq Composite hit 4-week highs while 469 stocks reached 4-week lows
  • 42 stocks in the Nasdaq Composite closed overbought while 440 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed  down -29.96 points today  to 0 after closing at 29.96 yesterday
     

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Airbus (ENXTPA: AIR) is reportedly doing everything possible to hit its 800-plane delivery target by year’s end. To hit its target, Airbus will need to deliver at least 127 aircrafts to customers In December. Airbus Marketing chief Christian Scherer and his team are reportedly still on the road, meeting with customers and chasing new orders. Airbus is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Amazon (AMZN) is in talks with the New York Yankees about buying the regional sports network YES from Disney (DIS), according to the Wall Street Journal.  The Yankees already own 20% of YES and have first rights on buying the rest.  Disney is said to be seeking USD$5-6 billion for the network.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  Disney is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • American Airlines (AAL) suffered flight cancellations and delays in New York after an electrical outage.  Its operations at LaGuardia airport were interrupted after the airport briefly lost power last night.  American Airlines canceled flights and delayed others as the airport switched to backup generators.  American flights were expected to return to normal today.  American Airlines is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.
  • Canadian marijuana producer Aphria Inc. (TSX: APHA) said that a proposed CAD$2.8bn (USD$2.1bn) hostile offer by Green Growth Brands Ltd. is significantly undervalued. The proposed bid is roughly 23% below Aphria’s 20-day average share price. “The board has determined that the GGB proposal, as it currently stands, significantly undervalues the company,” said Aphria Chairman Irwin Simon. Aphria is not rated in our Global Top Stock Ideas.
  • Boeing (BA) has won an order for 11 737-Max jets from BOC Aviation Ltd. (SEHK: 2588), according to press reports out of Asia.  BOC Aviation Ltd. has signed a lease with unidentified airlines for the jets.  BOC Aviation Ltd. will have the option for an undisclosed number of additional jets from Boeing, according to the report.  BOC Aviation Ltd. is rated “Attractive” in our China 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.
  • CenturyLink (CTL) suffered an outage in its data and voice management service that interrupted 911 service to millions of people.  The FCC said it is going to investigate the incident that was reported yesterday (see Verizon below).  The FCC action was reported in an email from the Chairman of the FCC, Ajit Pai.  CenturyLink is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Consolidated Edison (ED), the electricity provider for New York City, suffered an explosion at a substation in Queens.  The explosion illuminated the night sky with a blue light that could be seen for miles.  Residents called police reporting a plane crash with some believing that aliens had landed.  The explosion cut electricity to LaGuardia airport temporarily.  Consolidated Edison is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Dell Technologies (DELL) returned to the public equity markets today with its stock relisted on the Nasdaq stock market.  JP Morgan rated Dell an overweight rating, describing it as “one of the largest, most comprehensive, most integrated product and service companies in the IT space”.  JP Morgan set Dell’s price target at USD$60, implying 33% upside.  Dell is not yet rated in our Global Top Stock Ideas.
  • Distribuidora Internacional de Alimentacion SA (BME: DIA) shares are trading higher after reporting that it closed an agreement to refinance its bank dept, which will allow the grocer to continue its turnaround plan. The deal includes a new liquidity line of 200mm euros (USD$228mm) and the sale of two units. DIA is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas. 
  • HMV Group (LSE: HMV) has filed for insolvency for the second time in 6 years after observing disappointing sales over the holiday period. The 97-year old music and entertainment retailer’s potential liquidation threatens 2,025 jobs. In January 2013, HMV entered insolvency procedures after the trend towards online streaming services dragged down sales. HMV is not rated in our Global Top Stock Ideas.
  • JPMorgan Chase & Co. (JPM) has been fined HK$12.5mm (USD$1.6mm) by the Hong Kong Monetary Authority for failing to meet anti-money laundering and counter-terrorist financing law requirements. JPMorgan Hong Kong reportedly violated 6 different provisions of the laws between April 2012 and February 2014 relating to lack of customer due diligence and improper handling of wire transfers. JPMorgan is rated "Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Nissan (TSE: 7201) said it will cut car production by 20% on less China demand.  Nissan will cut production by 30,000 units in the next quarter, according to press reports.  Nissan produced 400,000 cars in China in the last quarter.  Nissan in rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas.
  • Phillip Morris International (PM) was reiterated as an overweight rating by Piper Jaffray today.  Phillip Morris International price target of USD$110 implies a 65% upside.  Piper Jaffray says “Phillip Morris International’s cigarette business is strong with pricing power intact.”  Phillip Morris International is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and is rated “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Royal Dutch Shell (ENXTAM: RDSA) has officially completed the sale of its operations in New Zealand. The sale includes Royal Dutch Shell's Maui, Pohokura, and Tank Farm assets in addition to its interest in the Great South Basin venture. Royal Dutch Shell is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas and “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Sony (SNY, TSE: 6758) said it will boost production of chips for next-generation 3D cameras for mobile phones after interest from phone manufactures.  Sony said it will ramp up mass production of the chips this summer when they will already be powering a number of mobile phones.  Sony did not give production estimates but said the unit is already profitable.  Sony is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas.
  • Today Tesla (TSLA) will institute the changes it agreed to with the US Securities and Exchange Commission.  The SEC wants 2 new independent board members and they will start on Friday.  Additionally, it wants CEO Elon Musk’s tweets monitored much more closely for inappropriate content.  Telsa is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • The European Union (EU) has published draft guidelines for ethical artificial intelligence (AI) development that will impact tech giants like Alphabet Inc. (GOOGL) and Microsoft Inc. (MSFT). The EU plans to invest 1.5bn euro in AI by 2020 while working to ensure privacy and ethics in the process. Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. Microsoft is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Transocean (RIG) has signed a five-year drilling contract and rig design and construction management contract with Chevron USA (CVX). The deal will see the completion of two ultra-deepwater drillships that are already under construction. The drilling contract alone is worth an estimated USD$830mm. Transocean is not rated in our Global Top Stock Ideas. Chevron is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Verizon (VZ) customers suffered nationwide telecom service disruption after CenturyLink, a contractor that handles data network traffic management for Verizon, suffered a failure in its network.  Verizon did not say how many people were affected but data and mobile service was affected in various parts of the United States.  Verizon is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Wells Fargo (WFC) reached a settlement with 50 state and the District of Columbia over its past sales practices.  Wells Fargo will pay USD$575mn to settle issues with sales practices from 2002-2017 including opening fake accounts and charging unnecessary fees.  This settlement covers charges previously disclosed.  Wells Fargo is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
     

 

US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -4.44 basis points to 2.51%
  • US 5-Year Treasury Bonds are higher with yields down -6.19 basis points to 2.55%
  • US 10-Year Treasury Bonds are higher with yields down -5.2 basis points to 2.71%
  • The US Treasury 2s-5s Spread has narrowed 1.75 basis points to 0.04%
  • The US Treasury 2s-10s Spread has narrowed 0.76 basis points to 0.2%
  • US Treasury 5s-10s Spread has widened 0.99 basis points to 0.16%

Currencies

  • EUR€ is up 0.166% against the USD$ in after hours to 1.1449
  • GBP£ is up 0.411% against the USD$ in after hours to 1.2696
  • CHF is up 0.435% against the USD$ in after hours to 1.0167
  • JPY¥ is down 0.73% against the USD$ in after hours to 110.2

Commodities

  • WTI Crude is up 1.61% to USD$45.33/bbl with the Brent-WTI spread down USD$-2.62 to USD$6.78/bbl
  • Gold is up 0.4% to USD$1280.86/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
General Electric Co Health Care 7.27 3.30%          21,582,580
Applied Materials Inc Financials 31.6 2.63%            3,998,389
DISH Network Corp Health Care 24.4 2.38%            1,555,011
Coty Inc Real Estate 6.34 2.37%            1,665,133
Chipotle Mexican Grill Inc Real Estate 415 2.33%                151,531
 
Underformers Sector Price 1D % Chg Volume
Cabot Oil & Gas Corp Financials 23.8 -3.45%            1,907,489
United Rentals Inc Consumer Discretionary 105 -3.14%                297,550
Hess Corp Health Care 41.5 -2.79%            1,217,674
Mosaic Co/The Financials 29.6 -2.50%                678,540
Noble Energy Inc Information Technology 18.9 -2.49%            1,603,426