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US stocks flat midday with optimism from strong economic data offset by concern over trade tension

Jan 17, 2019

 

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Market data as of 12:15pm EST

US Market Snapshot

  • US stocks are flat midday with optimism from strong jobless data offset by concerns over a potential increase in US-China trade tensions
  • The US government formally alleges that Huawei Technologies has stolen “trade secrets” and has begun a formal federal investigation -- the news of the investigation has rekindled investor fears about a breakdown in US-China trade talks
  • The S&P 500 is currently up 0.22%, Nasdaq Composite is up 0.19%, and Russell 2000 is up 0.38%
  • Initial Jobs Claims for the week of January 5th came at 213,000, a touch below the 220,000 consensus
  • The Philadelphia Fed Business Survey for January came at 17, well above consensus of 9 
  • Weeden & Co Chief Global Strategist Michael Purves highlights that the gap between VIX and realized 20-day volatility for the S&P 500 is at the widest levels since September 2011 -- typically a wide spread is a leading indicator of a positive move in US stocks
  • Bloomberg analysts suggest large-cap tech stocks should see a contraction in their EPS growth rates as revenue growth is expected to decelerate over the next 4 quarters -- the former “strongman” of the S&P 500 has now become its weakest link!
  • Materials (+0.93%), Industrials (+0.83%), and Healthcare (+0.48%) stocks are the top performers in the S&P 500 today
  • Financials (-0.03%), Real Estate (-0.03%), and Telecom (-0.07%) 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 2.25x
  • 211 stocks in the S&P500 are at 4-week highs while 3 stocks are at 4-week lows
  • 5 stocks in the S&P 500 are overbought while 3 stocks are oversold according to the 16-day RSI Measure
  • 90 stocks in the Nasdaq Composite are at 4-week highs while 23 stocks are at 4-week lows
  • 794 stocks in the Nasdaq Composite are overbought while 40 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently moving down at 18.64 from yesterday's close of 19.04
     

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Alcoa (AA) reported 4Q18 EPS of 66 cents while 58 cents was consensus.  Alcoa adjusted ebitda of USD$749 million topped USD$717 million consensus.  Alcoa sees a deficit in aluminum continuing in 2019, with a 1.7-2.1 million ton deficit estimated while a surplus of alumina is expected driven by China.  Alcoa is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • BB&T Corporation (BBT) reported FY4Q2019 financials pre-market Thursday that matched analyst estimates. BB&T generated an adjusted EPS of USD$1.05/share in FY4Q2018 while analysts’ consensus called for USD$1.05/share. BB&T’s net interest margin of 3.49% edged slightly past analysts’ consensus net interest margin estimate of 3.48%. BB&T is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • CSX (CSX) reported 4Q18 EPS of USD$1.01 while 99 cents was consensus.  CSX 4Q18 revenue of USD$3.14 billion came in line with USD$3.12 billion consensus.  CSX operating margin this quarter was 60.3% and CSX expects that to improve in 2020.  CSX completed its USD$5 billion share buyback and authorized another USD$5 billion buyback.  CSX is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • Electronic Arts Inc. (EA) have reportedly canceled development of their open-world Star Wars game. The cancellation is raising questions if EA can retain their contract with Disney for the Star Wars intellectual property when the contract is up for renewal in 2024. Additionally, Jefferies downgraded its recommendation for EA from buy to hold. EA is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Fastenal (FAST) reported 4Q18 EPS of 59 cents while 60 cents was consensus.  Fastenal 4Q18 revenue of USD$1.22 billion came in line with USD$1.23 billion consensus.  Fastenal saw sales grow 8.7% in the quarter.  Fastenal is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Fiserv (FISV) has lined up bridge loan financing for its planned acquisition of First Data (FDC).  First Data has a USD$18 billion debt load which includes USD$13 billion of loans and USD$5 billion of bonds.  Fiserv said it intends to keep its BBB rating.  Fiserv is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas. First Data is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Key Bank (KEY) reported 4Q18 EPS of 45 cents while 47 cents was consensus.  Key Bank 4Q18 revenue of USD$1.64 billion came in line with USD$1.64 billion consensus.  4Q18 NIM on a taxable equivalent basis was 3.16%, in-line with 3.19% consensus.  Key Bank is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Kinder Morgan (KMI) reported 4Q18 EPS of 23 cents while 25 cents was consensus.  Kinder Morgan 4Q18 revenue of USD$1.96 billion came in line with USD$1.94 billion consensus.  Backlog fell to USD$5.7 billion.  Kinder Morgan is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Knight-Swift Transportation (KNX) reported preliminary adjusted earnings premarket on Thursday that largely pleased investors and analysts. Knight-Swift reported preliminary adjusted EPS for FY4Q2018 between USD$0.91/share and USD$0.93/share while the prior view called for between USD$0.71/share and USD$0.75/share. Knight-Swift is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.  
  • Morgan Stanley (MS) reported 4Q18 EPS of  73 cents while 89 cents was consensus.  Morgan Stanley 4Q18 revenue of USD$8.5 billion came well below USD$9.35 billion consensus.  FICC sales and trading revenue came at USD$564 million while USD$822 million was consensus.  Morgan Stanley is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • M&T Bank Corporation (MTB) reported mixed FY4Q2018 financials with an EPS beat despite a net interest margin that missed analysts’ consensus estimate. M&T Bank recorded a net interest margin of 3.92% in FY4Q2018 while analysts expected 3.93%.  Despite the net interest margin miss, M&T Bank generated an operating EPS of USD$3.79/share in FY4Q2018 while analysts expected just USD$3.49/share. M&T Bank is rated “Attractive” in our US Large-Cap Global Top Stock Ideas. 
  • Pandora A/S (CPSE: PNDORA) Christmas season sales declined at Signet Jewelers Limited (SIG), the retail company said in a statement. Signet detailed in its statement that the firm’s product category, labeled as Other, “declined driven by a strategic reduction of owned brand beads, as well as declined in Pandora.” Pandora is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Signet is not rated in our Global Top Stock Ideas.
  • PPG Industries (PPG) reported FY4Q2018 financials that slightly beat analysts’ expectations. PPG generated an adjusted EPS from continuing operations in FY4Q2018 of USD$1.15/share while analysts’ consensus called for USD$1.10/share. PPG’s revenue of USD$3.65bn in FY4Q2018 met analyst expectations of USD$3.65bn. PPG is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • PulteGroup (PHM) was downgraded by BTIG to sell from neutral.  PulteGroup’s price target was set at UD$23.  The downgrade comes after a 14% run in the stock that is now trading at a 21% premium to its peers.  PulteGroup is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Sage (LSE: SGE) reported a 10.5% jump in fiscal 2Q19 revenue to 387 million pounds.  Sage saw subscription growth of 27.7% while total organic revenue growth was 7.6%.  Sage reiterated 2019 guidance with Shore Capital reiterating its buy rating in the wake of these results.  Sage Data is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Signature Bank (SBNY) reported FY4Q2018 earnings that broadly surpassed analyst expectations. Signature Bank generated an EPS of USD$2.94/share in FY4Q2018 while analysts’ consensus called for USD$2.81/share. Signature Bank’s net interest income of USD$335mm beat the highest analyst estimates that ranged between USD$322.9mm and USD$330.0mm. Signature Bank is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.  
  • Signet Jewelers Ltd. (SIG) shares fell to their lowest point since 2009 after announcing a sales drop during the critical holiday period. The mall-based retailer that owns jewelry chains like Zales, Jared, and Kay Jewelers said that same-store sales fell 1.3% for the nine-week period ending January 5th, 2019. Signet is not rated in our Global Top Stock Ideas.  
  • Taiwan Semiconductor (TSEC:2330) provided revenue guidance well below consensus.  Taiwan Semiconductor forecasts 2019 revenue of USD$7.3-7.4 billion while present consensus is for USD$8.1 billion.  The maker of chips for Apple (AAPL) continues to feel the slowdown in handset sales.  Taiwan Semiconductor is not rated in our Global Top Stock Ideas.  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.

 

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US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 1.86 basis points to 2.55%
  • US 5-Year Treasury Bonds are lower with yields up 2.19 basis points to 2.55%
  • US 10-Year Treasury Bonds are lower with yields up 1.07 basis points to 2.73%
  • The US Treasury 2s-5s Spread has widened 0.33 basis points to 0%
  • The US Treasury 2s-10s Spread has narrowed 0.79 basis points to 0.17%
  • US Treasury 5s-10s Spread has narrowed 1.12 basis points to 0.17%
     

Currencies

  • EUR€ is currently little changed against the USD$ at 1.1384
  • GBP£ is currently up 0.404% against the USD$ to 1.2937
  • CHF is currently down 0.426% against the USD$ to 1.0055
  • JPY¥ is currently little changed against the USD$ at 109.02
     

Commodities

  • WTI Crude is currently down -1.76% to USD$51.39/bbl with the Brent-WTI spread up USD$1.18 to USD$8.82/bbl
  • Gold is currently little changed -0.16% to USD$1291.54/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
Fastenal Co Industrials 54.5 5.16%          924,073.00
M&T Bank Corp Financials 151 4.40%                106,808
PPG Industries Inc Materials 101 3.97%                152,220
Goodyear Tire & Rubber Co/The Consumer Discretionary 19 3.89%                838,694
Fiserv Inc Information Technology 75.1 3.68%            1,923,525
 
Underperformers Sector Price 1D % Chg Volume
Western Digital Corp Information Technology 37.7 -4.44%            1,419,841
Morgan Stanley Financials 42.8 -4.36%            3,247,568
F5 Networks Inc Information Technology 163 -3.63%                156,419
Seagate Technology PLC Information Technology 39.6 -3.27%                737,191
CenturyLink Inc Communication Services 16.2 -3.13%            1,153,671

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