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US stocks turn negative after White House advisers says zero growth possible if shutdown drags into March

Jan 23, 2019

 

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Market data as of 13:30pm EST

US Market Snapshot

  • US stocks opened positive, but turned negative, after White House Council of Economic Advisers Chairman Kevin Hassett said there is a possibility of zero economic growth in the first quarter is the partial government shutdown drags on into March
  • He added, however, that "humungous growth" would occur in the following quarter if that were to happen
  • The S&P 500 is currently down 0.68%, Nasdaq Composite is down 0.59%, and Russell 2000 is down 0.83%
  • The Richmond Fed Manufacturing Index for January came at -2, matching consensus
  • JP Morgan raises its outlook for US stocks and now believes there are some opportunities to add value with the health of US EPS more dependable than other regions 
  • In spite of yesterday’s negative close in the S&P 500, the SPDR S&P ETF Trust (SPY)  saw positive inflows of USD$1.42 billion, an increase in total assets of 0.6%. 
  • Goldman Sachs is arguing this morning that US stocks are set to benefit from a BREXIT deal given the exposure of US stocks to the UK as they (Goldman Sachs) expect UK stocks to outperform European peers in CY2019
  • Utilities (+0.85%), Consumer Staples (+0.7%), and Telecom (-0.23%) stocks are the top performers in the S&P 500 today
  • Gasoline crack spreads futures on the Nymex, a measure of the profitability of refiners and midstream profitability, is currently sitting at a 5 year low
  • Financials (-0.63%), Materials (-1.22%), and Energy (-1.31%) stocks are the worst performers in the S&P 500 today
  • Investor sentiment for US stocks is negative with the advance/decline ratio for the S&P 500 currently at 0.24x
  • 107 stocks in the S&P500 are at 4-week highs while 2 stocks are at 4-week lows
  • 8 stocks in the S&P 500 are overbought while 2 stocks are oversold according to the 16-day RSI Measure
  • 95 stocks in the Nasdaq Composite are at 4-week highs while 29 stocks are at 4-week lows
  • 384 stocks in the Nasdaq Composite are overbought while 105 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently moving up at 21.68 from yesterday's close of 20.80
     

Stocks Trending in the News

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  • Abbott Laboratories (ABT) reported CY1Q2019 adjusted EPS from continuing operations guidance that missed analyst expectations. Abbott sees adjusted EPS from continuing operations between USD$0.60/share and USD$0.62/share in FY1Q2019 while analysts expected USD$0.64/share. Abbott’s CY4Q2018 adjusted EPS from continuing operations came in-line with analyst expectations of USD$0.81/share. Abbott is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Amphenol (APH) reported adjusted EPS guidance for FY2019 that missed the average analyst estimate. Amphenol forecasts adjusted EPS between USD$3.88/share and USD$3.96/share while analysts’ consensus called for USD$3.97/share. Amphenol also reported adjusted EPS of USD$1.05/share in FY4Q2018 while analysts expected just USD$0.97/share. Amphenol 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.  
  • ASML Holding N.V. (ENXTAM: ASML) reported CY4Q2018 financials that surpassed analyst estimates and CY1Q2019 guidance that missed analyst estimates. ASML generated 788mm euros of net income in CY4Q2018 while analysts expected 758.7mm euros. ASML sees net sales of about 2.1bn euros in CY1Q2019, missing the lowest analyst estimates that range between 2.58bn euros and 2.92bn euros. ASML is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Burberry Group Plc (LSE: BRBY) reported FY3Q2018 financials that missed analyst estimates. Burberry saw net sales of GBP719mm in FY3Q2018, missing analysts’ consensus of GBP719mm by more than 10%. Burberry’s same store sales growth of just 2% in FY3Q2018 missed analyst expectations of 3.25%. Burberry is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Carrefour S/A (ENXTPA: CA) reported CY4Q2018 EBIT that may signal a turnaround for the company’s financials, according to Bernstein. Bernstein analyst Bruno Monteyne said in a note to clients that, “The slight beat in French like-for-like and the confirmation of EU1.93bn EBIT will reassure markets that Carrefour is stable and could be at the start of a turn around.” Carrefour is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Comcast (CMCSA) reported fourth quarter EPS of 64 cents while consensus was for 62 cents.  Comcast fourth operating cash flow came at USD$5.8 billion.  NBCUniversal has 4Q revenue of USD$9.4 billion.  Comcast is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Deutsche Bank AG (DB: DBK) is reportedly the subject of a probe by the US Federal Reserve that will examine how the German bank handled billions of dollars in suspicious transactions from Danske Bank A/S (CPSE: DANSKE). The fed probe is in its early stages but is reportedly critical of how Deutsche Bank’s US operations monitored funds from an Estonian branch of Danske. Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Danske Bank is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • International Business Machines Corporation (IBM) reported CY4Q2018 earnings that was the, “cleanest quarter in years,” according to Morgan Stanley. IBM reported revenue of USD$21.8bn for CY4Q2018, beating analyst consensus of USD$21.7bn. IBM’s EPS of USD$4.87/share in CY4Q2018 also surpassed analyst expectations, which called for USD$4.82/share. IBM 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.
  • Kimberly-Clark (KMB) announced a full-year adjusted EPS forecast that missed analysts’ consensus while reporting CY4Q2018 adjusted EPS that also missed analyst estimates. Kimberly-Clark expects full-year adjusted EPS between USD$6.50/share and USD$6.70/share while analysts’ consensus called for USD$6.79/share. Kimberly-Clark's CY4Q2018 adjusted EPS of USD$1.60/share also missed analyst expectations of USD$1.65/share. Kimberly-Clark is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Northern Trust (NTRS) reported disappointing CY4Q2018 financials. Northern Trust reported assets under management of USD$1.07tn, missing the lowest analyst estimates that ranged between USD$1.08tn and USD$2.80tn. Northern Trust is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Proctor & Gamble (PG) reported fiscal second quarter 2019 EPS of USD$1.25 while consensus was for USD$1.21.  Proctor & Gamble fiscal second quarter revenue came at USD$17.44 versus USD$17.16 billion expected.  Proctor & Gamble guidance for all of fiscal 2019 is EPS growth of 3-8%.  Proctor & Gamble is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Restaurant Brands International Inc. (QSR) reported accelerating same-store sales growth in its Burger King and Tim Hortons chains while announcing that it named a new Chief Executive Officer. Jose Cil, an individual with 18 years of experience at Burger King, will assume the CEO position from Daniel Schwartz, who will become the company’s executive chairman and co-chairman of the board of directors. Restaurant Brands is rated “Attractive” in our Canada All-Cap Global Top Stock Ideas.  
  • RPC Inc. (RES) became the latest US oilfield services provider to say that it is feeling the impact of a slowdown in fracking. In a statement on Wednesday, Chief Executive Officer Richard Hubbell said that several of the company’s customers are reconsidering their 2019 budgets and current operations. RPC is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas. 
  • Synchrony Financial (SYF) reported fourth quarter EPS of USD$1.09 while consensus was for 91 cents.  Synchrony Financial fourth quarter net earnings came at USD$783 million.  Loan-loss provisions were USD$1.45billion, just below USD$1.49 billion expected.  Synchrony Financial is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • The Progressive Corporation (PGR) reported fourth quarter EPS of USD$0.44/share, widely missing the lowest analyst estimates that ranged between USD$0.90/share and USD$1.12/share.  Progressive also reported net premiums earned of USD$8.19bn and net premiums written of USD$7.94bn.  Progressive is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • United Technologies (UTX) reported fourth quarter EPS of USD$1.95, well above consensus of USD$1.53.  United Technologies fourth quarter revenue came at USD$18.04 billion, well above USD$16.87 billion.  United Technologies is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “top buy” in our US Industrials Global Top Stock Ideas.
  • Walgreens Boot Alliance (WBA) has agreed to pay USD$269.2mm in order to settle claims that the drugstore chain defrauded federally-funded health care programs and a consumer-discount initiative. The USD$269.2mm payment spans across two settlements; one for USD$209.2mm that relates to billed Medicare, Medicaid, and other programs, and one for USD$60mm that concerns not disclosing lower drug prices offered in a discount program. Walgreens is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Waters Corporation (WAT) reported adjusted EPS guidance for its full-year that surpassed the average analyst estimate. Waters sees adjusted EPS of between USD$9.20/share and USD$9.45/share for FY2019 while analysts’ consensus called for USD$9.19/share. Further, Waters offered adjusted EPS guidance of between USD$1.65/share and USD$1.75/share for FY1Q2019 while analysts expected USD$1.74/share. Waters is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
     

 

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US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -0.61 basis points to 2.58%
  • US 5-Year Treasury Bonds are lower with yields up 0.34 basis points to 2.58%
  • US 10-Year Treasury Bonds are lower with yields up 0.52 basis points to 2.74%
  • The US Treasury 2s-5s Spread has widened 0.95 basis points to 0%
  • The US Treasury 2s-10s Spread has widened 1.13 basis points to 0.16%
  • US Treasury 5s-10s Spread has widened 0.18 basis points to 0.16%

Currencies

  • EUR€ is currently up 0.29% against the USD$ to 1.1393
  • GBP£ is currently up 0.903% against the USD$ to 1.3071
  • CHF is currently up 0.269% against the USD$ to 1.0054
  • JPY¥ is currently little changed against the USD$ at 109.47
     

Commodities

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*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

S&P 500 Sector ETFs - Intraday

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Russell 1000 Factor ETFs - Intraday

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S&P 500 Movers

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Outperformers Sector Price 1D % Chg Volume
Waters Corp Health Care 197 9.96%          177,847.00
Synchrony Financial Financials 25.7 9.27%            2,121,294
International Business Machines Corp Information Technology 122 7.02%            1,797,118
Procter & Gamble Co/The Consumer Staples 92 4.02%            2,190,356
Comcast Corp Communication Services 35.8 3.55%            3,688,646
 
Underperformers Sector Price 1D % Chg Volume
Capital One Financial Corp Financials 81.3 -6.38%                550,566
Whirlpool Corp Consumer Discretionary 124 -5.52%                  82,560
Take-Two Interactive Software Inc Communication Services 106 -5.46%                425,791
Rollins Inc Industrials 38.6 -4.95%                374,860
QUALCOMM Inc Information Technology 55.8 -4.51%            4,150,598

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