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US stocks close higher after more soothing words from Fed, reiterating dovish tone

Jan 10, 2019

 

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US Markets End of Day Snapshot

  • US stocks close higher after trading in negative territory midday, with a soothing tone reiterated by Fed President boosting market sentiment
  • Federal Reserve Chairman Jerome Powell said today at the Economic Club of Washington the Fed can be patient with its rate hikes, saying "We're in a safe place where we can patient and fexible and wait and see what does evolve
  • Powell also said the Fed will continue with its process of shrinking its balance sheet
  • The S&P 500 finished up 0.45%, Nasdaq Composite up 0.42%, and Russell 2000 up 0.46%
  • WTI crude trades lower, though remains firmly agove $52 in midday trading
  • US Initial Jobless Claims for January 5th came slightly better at 216,000 versus 226,000 expected
  • The US goverment is no closer to reopening after President Trump and Congressional leaders met and came to no agreement, the shutdown is well into its third week
  • Disappointing holiday retail sales results from major department stores is dampening enthusiasm for US retail stocks 
  • French industrial prodction fell 2.1% y/y in December, coming much worse than 0.2% drop that was expected
  • Real Estate (+1.55%), Industrials (+1.44%), and Utilities (+1.41%) stocks were the top performers in the S&P 500 today
  • Telecom (+0.2%), Financials (+0.12%), and Consumer Discretionary (-0.23%) 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 3.17x
  • 128 stocks in the S&P 500 hit 4-week highs while 3 stocks reached 4-week lows
  • 4 stocks in the S&P 500 closed overbought while 3 stocks closed oversold according to the 16-day RSI Measure
  • 61 stocks in the Nasdaq Composite hit 4-week highs while 20 stocks reached 4-week lows
  • 638 stocks in the Nasdaq Composite closed overbought while 19 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed down 0.48 points today to 19.50 after closing at 19.98 yesterday
     

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Amarin (AMRN) shares surged after it was suggested by Street Insider that Pfizer (PFE) could be interested in the company.  Amarin recently gave a presentation at the JP Morgan healthcare conference that was very well received by investors.  Amarin and Pfizer both refused comment when asked about the news.  Pfizer is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  Amarin is not rated in our Global Top Stock Ideas.
  • American Airlines (AAL) lowered guidance for revenue per mile growth to 1.5%.  Previous guidance from American Airlines had 1.5% as the low end of the range.  American’s warning follows a similar announcement from Delta Airlines (DAL) in the last week.   American Airlines is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.  Delta Airlines is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • Big Lots (BIG) was downgraded to neutral from buy at Goldman Sachs.  Big Lots’ price target was cut to USD$34 from USD$48.  The downgrade follow 2 disappointing quarters of results and concerns over margin compression.  Big Lots is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • BlackRock (BLK) announced it is laying off 500 employees, or 3% of its workforce, according to Bloomberg.  The cuts will be worldwide and the first since 2016.  BlackRock said in a note to employees “market uncertainty is growing…and the ecosystem we operate in is becoming increasingly complex” without detailing where the cuts would be.  BlackRock is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Columbia Sportswear (COLM) was downgraded to hold from buy at Needham & Co.  Needham believes Columbia is fully valued at this price level.  Columbia Sportswear should hit its growth targets in 2019 but Needham thinks its multiple of 20.5 times earnings is not a good entry point.  Columbia Sportswear is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Danske Bank (CPSE:DANSKE) employees were “openly lying” to French authorities when responding to questions about money laundering, this according to the co-founder of Hermitage Capital.  Co-founder Bill Browder says he had proof to back up his allegations, he had been one of the driving forces behind the investigation into money laundering at Danske.  He made a presentation to the Danish parliament today.  Danske Bank is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Ericsson (OM:ERIC B) announced it will take a USD$687 million charge for its digital services unit.  This digital services unit has resisted efforts at turnaround, threatening Ericsson’s overall strategy to boost profitability.  The rest of Ericsson has seen improvements in the wake of its turnaround plan be implemented.  Ericsson is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.
  • Fast Retailing (TSE:9983) reported fiscal 1Q operating income that missed consensus.  Fast Retailing fiscal 1Q operating income was 104.67 billion yen while 117.52 was consensus estimate.  Fiscal 1Q net sales of 644.47 trillion yen came below 656.76 billion yen expected.   Full year sales guidance of 2.3 trillion yen was maintained.  Fast Retailing is rated “Neutral” in our Japan Large-Cap Global Top Stock Ideas.
  • Ford (F) announced a major restructuring of its European operations as it looks to raise its stock price.  Ford is in talk with its unions about jobs cuts that are likely to run into the thousands.  Ford is likely close multiple production plants in Europe as part of the plan, specifics have yet to be announced.  Ford is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Kering (ENXTPA:KER) had its rating cut by USB to neutral from buy.  UBS lowered Kering’s price target to 450 euros from 575 euros.  UBS says the Gucci momentum that Kering has seen is topping out and led UBS to cut some of its 2019 assumptions, causing the rating cut.  UBS sees 11% organic growth in 2019.  Kering is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Kohl’s Corp (KSS) reports November/December SSSs of +1.2% vs. +6.9% for the period in CY2017.  The market is interpreting this result as negative even though management tightened its FY EPS guidance to USD$5.50 to USD$5.55 from USD$5.35 to USD$5.55.  Target is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Macy’s (M) reports holiday season (November and December) SSSs of +0.7% and cuts its full-year guidance for sales and EPS.  Macy’s now sees FY EPS in a range of USD$3.95 to USD$4.30 from previous guidance of USD$4.10 to USD$4.30.  Macy’s is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • MGM Resorts International (MGM) now has Starwood Value as a shareholder, according to a Bloomberg report.  Starwood Value, known for its activist fund, has a position it plans to build on with plans to seek changes at MGM Resorts International, as it has with past investments.  MGM Resorts International shares rose on the news.  MGM Resorts International is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary.
  • Nike (NKE) is the focus of a EU tax investigation of companies that use Dutch law to lower their tax payments.  The EU alleges Nike and others have used the Netherlands to set up structure that “unduly reduce their tax burden”, and that is unfair.  The EU probe will focus on the structure of royalty payments and how they are taxed.  Nike is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Samsung (KOSE:A005930) is set to unveil its new flagship S10 cell phone lineup on February 20th, the Wall Street Journal is reporting.  Samsung will introduce a version of the phone that is foldable and fully functional.  There will be 4 versions of the S10 unveiled on the 10th anniversary of the phone.  Samsung is not rated in our Global Top Stock Ideas.  
  • Target (TGT) reports November/December SSSs of +5.7%.  Target management reaffirms its full-year guidance for revenues and EPS.  In unrelated news, Target also announces that CFO Cathy Smith will be retiring and that the company is conducting an extensive search for its next CFO.  Target is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Tesco (LSE:TSCO) reported strong Christmas sales, beating consensus estimates.  Tesco Christmas UK same store sales grew 2.2%, double the 1.1% consensus.  Christmas group sales grew 1.5%.  Tesco said it “remains ang on track to deliver plans for year”.  Tesco is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 

 

Actionable and Transparent Quantitative ResearchActionable and Transparent Quantitative Research

US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 1.23 basis points to 2.56%
  • US 5-Year Treasury Bonds are lower with yields up 0.84 basis points to 2.55%
  • US 10-Year Treasury Bonds are lower with yields up 1.96 basis points to 2.72%
  • The US Treasury 2s-5s Spread has narrowed 0.39 basis points to -0.01%
  • The US Treasury 2s-10s Spread has widened 0.73 basis points to 0.16%
  • US Treasury 5s-10s Spread has widened 1.12 basis points to 0.17%
     

Currencies

  • EUR€ is down 0.39% against the USD$ in after hours to 1.1498
  • GBP£ is down 0.336% against the USD$ in after hours to 1.2746
  • CHF is down 1.052% against the USD$ in after hours to 1.0154
  • JPY¥ is up 0.268% against the USD$ in after hours to 108.46
     

Commodities

  • WTI Crude is up 0.44% to USD$52.59/bbl with the Brent-WTI spread little changed USD$-0.18 to USD$8.11/bbl
  • Gold is down -0.54% to USD$1286.62/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

 

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S&P 500 Movers

On Mobile/Tablet scroll to the right.

Outperformers Sector Price 1D % Chg Volume
Constellation Brands Inc Real Estate 164 5.96%            1,325,021
General Electric Co Health Care 7.27 5.18%          22,344,211
International Paper Co Materials 40.4 4.92%            1,243,185
Packaging Corp of America Communication Services 84.3 4.18%                277,282
Newell Brands Inc Materials 18.4 4.16%            1,489,286
 
Underformers Sector Price 1D % Chg Volume
Macy's Inc Health Care 30 -17.69%            5,934,652
Kohl's Corp Information Technology 64.8 -4.81%            1,519,461
L Brands Inc Financials 26.1 -4.39%            2,103,492
American Airlines Group Inc Information Technology 32 -4.13%            4,762,139
Nordstrom Inc Information Technology 46.7 -4.04%                684,846

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