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Risk-on grips US stocks, led by small-caps, as face-to-face trade negotiations with China resume

Jan 07, 2019

 

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Market data as of 12:15pm EST

US Market Snapshot

  • Risk-on is strong among US stocks today, with a broad based rally, as US and China resume face-to-face trade negotiations in Beijing
  • Small-cap stocks (Russell 2000) are rising twice as much as large-cap names (S&P 500) today 
  • The S&P 500 is currently up 1.04%, Nasdaq Composite is up 1.32%, and Russell 2000 is up 1.94%
  • Oil is surging today with WTI crude +2.7% trading at $49.26
  • According to Fundstrat’s Tom Lee, the number of stocks in the S&P 500 with P/Es south of 15.0x outnumbers those that are valued more than 25.0x with the spreading have increased nearly 15 points since the end of CY2017 – Lee suggests that US stocks are offering “real value” for investors for the first time in years 
  • Strategists at French investment bank SocGen believe earnings growth in the US and Europe will be flat in CY2019 with risks coming from semiconductors and capital goods stocks.  SocGen favors pharmaceutical and HPC stocks within the “defensive” healthcare and consumer staples sectors. 
  • JP Morgan stock strategists disagree with strategists at SocGen and suggest record levels for stocks buybacks, best in world earnings growth, and an acceleration in top-line growth point to continued support for US stocks valuation  
  • Consumer Discretionary (+2.42%), Energy (+1.72%), and Healthcare (+1.15%) stocks are the top performers in the S&P 500 today
  • Financials (+0.5%), Consumer Staples (+0.14%), and Utilities (-0.74%) stocks are the worst performers in the S&P 500 today
  • Investor sentiment for US stocks is positive with the advance/decline ratio for the S&P 500 currently at 7.77x
  • 24 stocks in the S&P500 are at 4-week highs while 3 stocks are at 4-week lows
  • 1 stock in the S&P 500 are overbought while 3 stocks are oversold according to the 16-day RSI Measure
  • 28 stocks in the Nasdaq Composite are at 4-week highs while 31 stocks are at 4-week lows
  • 285 stocks in the Nasdaq Composite are overbought while 46 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently 21.19 moving down at 0.19 from yesterday's close of 21.38

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Alphabet Inc. (GOOGL) was upgraded to buy from hold at Pivotal Research Group while its price target for the tech giant was raised from USD$1,010/share to USD$1,240/share. Pivotal cited that Google’s parent company, “remains the dominant player in digital advertising,” as reasoning for the upgrade. Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Anheuser-Busch InBev (BUD) was downgraded by Goldman Sachs today to neutral from buy.  Anheuser-Busch InBev, like a number of players in the sector, is likely to have a tough 2019 as demand is expected to be less than originally expected.  Anheuser-Busch InBev is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Apple Inc. (AAPL) and Samsung (KOSE: A005930) have announced a deal that will see the iPhone maker offer iTunes movies and TV shows on its rival’s TV sets. The move by Apple displays a shift towards developing its tech and media services business as product sales continue to wane for the company. 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. Samsung is not rated in our Global Top Stock Ideas. 
  • Six current and former BASF SE (DB: BAS) engineers have been arrested in Taiwan for allegedly accepting bribes and sharing the German company’s technology with China’s Jiangyin Jianghua Microelectronics Materials Co. (SHSE: 603078). The employees were reportedly offered 40mm yuan (USD$5.8mm).  BASF SE is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. Jiangyin Jianghua Microelectronics Materials is not rated in our Global Top Stock Ideas.
  • CBS News  (CBS) has named its first female president of the company.  CBS News named Susan Zirinsky, the producer of “48 Hours”, as its new president.  CBS news has suffered ratings weakness and the loss of key anchors and its new president will be tasked with turning the division around.  CBS Corp. is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Dollar Tree (DLTR) has Starboard Value as a shareholder, with a 1.7% stake, according to the Wall Street Journal.  Dollar Tree is being pushed to sell its Family Dollar division and to make changes to its pricing model.  Starboard Value has also named seven candidates for Dollar Tree’s board.  Dollar Tree is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Eli Lilly (LLY) is acquiring Loxo Oncology (LOXO) for USD$235 per shares, or about USD$8 billion.  Eli Lilly is expanding its cancer treatment business with the acquisition.  The companies will hold a press conference this morning to go over the details of the deal.  Eli Lilly is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  Loxo Oncology Nvidia is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • General Motors Company (GM) was upgraded to outperform from market perform by GMO while its price target for the automobile manufacturer was raised from USD$38/share to USD$41/share. BMO cited a strong outlook and better catalysts from GM in 2019 for the upgrade. GM is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Nvidia (NVDA) introduced a new gaming chip, the GeForce RTX 2060 chip, last night at a CES event.  The RTX 2060 is 60% faster than prior generation chips and according to the company, puts Turing architecture within reach of many more PC gamers worldwide.  Nvidia is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • NuVasive (NUVA) shares are trading lower after reporting financials that missed analyst expectations. NuVasive reported preliminary revenue of USD$1.10bn in FY2018 while analysts expected USD$1.11bn. NuVasive’s FY4Q2018 revenue of USD$288mm missed analysts’ consensus of USD$294.4mm. NuVasive is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
    QEP Resources (QEP) has received an offer from Elliott  Management for the rest of the company it odes not already own.  Elliott  Management offered USD$8.75 per share for oil driller QEP Resources, a 44% premium to Friday’s close.  Elliott said the deal is subject to due diligence.  Elliott has been engaged with QEP Resources since early 2018 on how to improve performance.  QEP Resources is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • PG&E (PCG) is considering whether to file bankruptcy protection, according to a report in Bloomberg.  PG&E is looking to the state of California to help it with legislation as it faces billions and billions of dollars in liabilities over the fire.  PG&E has not made any decision yet as to how it will proceed.  PG&E is rated is “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Sage Therapeutics Inc. (SAGE) shares surged higher after announcing that their experimental antidepressant was successful in treating women’s postpartum depression symptoms. After two weeks of treatment, 45% of women were in remission compared to 23% of women on the placebo. Sage is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.  
  • Tesla (TSLA) today broke ground on its new factory in China.  Tesla calls the newest factory Gigafactory 3 and is located in Shanghai.  Tesla’s factory will be the first production facility of its type that is fully owned by a foreign company.  Tesla expects to build the factory in record time.  Tesla is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.

 

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US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 2.65 basis points to 2.48%
  • US 5-Year Treasury Bonds are lower with yields up 1.66 basis points to 2.48%
  • US 10-Year Treasury Bonds are lower with yields up 1.23 basis points to 2.65%
  • The US Treasury 2s-5s Spread has narrowed 0.99 basis points to 0%
  • The US Treasury 2s-10s Spread has narrowed 1.42 basis points to 0.17%
  • US Treasury 5s-10s Spread has narrowed 0.43 basis points to 0.17%

Currencies

  • EUR€ is currently up 0.641% against the USD$ to 1.1468
  • GBP£ is currently up 0.369% against the USD$ to 1.277
  • CHF is currently up 0.731% against the USD$ to 1.0204
  • JPY¥ is currently little changed against the USD$ at 108.6

Commodities

  • WTI Crude is currently up 2.7% to USD$49.26/bbl with the Brent-WTI spread down USD$-2.06 to USD$7.75/bbl
  • Gold is currently little changed 0.16% to USD$1288.06/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

 

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S&P 500 Movers

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Outperformers Sector Price 1D % Chg Volume
Mattel Inc Health Care 9.98 9.22%            1,107,551
Nektar Therapeutics Real Estate 33.2 7.21%                178,236
Advanced Micro Devices Inc Health Care 17.5 6.63%          12,138,164
Netflix Inc Real Estate 256 5.97%            2,689,204
Dollar Tree Inc Communication Services 87.3 5.96%                873,837
 
Underperformers Sector Price 1D % Chg Volume
PG&E Corp Information Technology 23.6 -21.68%            2,770,813
Lamb Weston Holdings Inc Health Care 73.7 -7.13%                189,692
Nasdaq Inc Real Estate 80.7 -2.71%                135,295
Philip Morris International Inc Real Estate 66.7 -2.56%                518,125
Altria Group Inc Financials 48.7 -2.49%                756,336

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