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Semiconductors lead US stocks higher, trade concerns remain; Intel (INTC) disappoints after close

Jan 24, 2019

 

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US Markets End of Day Snapshot

  • Semiconductors led US stocks higher today, with the broader market posting more most gains; trade concerns remain with conficting messages from adminstration officials
  • Intel (INTC) reported weak fourth quarter results as well as weak guidance for the first quarter of 2019 after the market closed today (See stocks in the News below)
  • The S&P 500 finished up 0.14%, Nasdaq Composite up 0.68%, and Russell 2000 up 0.7%
  • Trade concerns were fueled by Commerce Secretary Wilbur Ross saying the US and China are "miles apart" on trade
  • White House Economic adviser Larry Kudlow later said he sees "a fair chance" of the US and China coming to a deal
  • The Philadelphia Semiconductor Index closed 5.7% higher in the wake of strong earnings results in the sector, 29 of 30 members were higher today
  • US Initial Jobless Claims for the week of January 19th came at 199,000, below the 218,000 consensus and the first time it fell below the 200k level in decades
  • US Manufacturing PMI for January came at 54.9, above 53.5 consensus
  • US Services PMI for January came at 54.2, above 54.0 consensus
  • US Composite PMI for January came at 54.5
  • Research by Bank of America suggests institutional investors are showing a preference for individual stock picking at the expense of buying ETFs.  Will CY2019 be the year that Active Investing finally bounces back?
  • Bloomberg publishes a fascinating analysis of “passive” funds to find that many are really “passive-aggressive” with a focus on the creation of unique indices to help these supposed funds help beat the market.  At the moment, there are over 3.7 million unique indices.  This isn’t what Jack Bogle envisioned when he launched his first index fund!
  • Tech (+0.93%), Energy (+0.6%), and Industrials (+0.56%) stocks were the top performers in the S&P 500 today
  • Materials (-0.56%), Healthcare (-0.86%), and Consumer Staples (-1.3%) 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 1.86x
  • 108 stocks in the S&P 500 hit 4-week highs while 3 stocks reached 4-week lows
  • 14 stocks in the S&P 500 closed overbought while 1 stocks closed oversold according to the 16-day RSI Measure
  • 94 stocks in the Nasdaq Composite hit 4-week highs while 36 stocks reached 4-week lows
  • 330 stocks in the Nasdaq Composite closed overbought while 110 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed down 0.63 points today to 18.89 after closing at 19.52 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • American Airlines (AAL) announced CY4Q2018 financials that mostly surpassed analyst expectations. American Airlines reported adjusted EPS of USD$1.04/share in CY4Q2018 while analysts expected USD$1.02/share. American Airlines generated operating revenue of USD$10.94bn in the quarter, slightly missing analysts’ consensus of USD$10.95bn. American Airlines is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • American Electric Power (AEP) reported fourth quarter EPS from continuing operations of 72 cents while consensus was for 70 cents.  American Electric Power fourth quarter revenue came at USD$3.8 billion while USD$ 3.6 billion was consensus.  American Electric Power is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Bristol-Myers Squibb (BMY) reported fourth quarter adjusted EPS of 94 cents while consensus was for 85 cents.  Bristol-Myers Squibb fourth quarter revenue came at USD$5.97 billion, USD$ 5.99 billion was consensus.  Bristol-Myers Squibb affirmed 2019 EPS guidance of USD$4.10-4.20.   Bristol-Myers Squibb is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Discover Financial Services (DFS) reported fourth quarter EPS of USD$2.03 while consensus was for USD$2.05.  Discover Financial Services fourth quarter revenue came in line at USD$2.8 billion while consensus was for USD$2.8 billion.  Discover Financial Services is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • E-Trade Financial Services (ETFC) reported fourth quarter EPS of USD$1.07 while consensus was for USD$1.03.  E-Trade Financial Services fourth quarter revenue came at USD$735 million while consensus was for USD$744 million.  E-Trade Financial Services is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Freeport-McMoRan Inc. (FCX) reported fourth quarter EPS of USD$0.11/share while consensus was for USD$0.18/share.  Freeport fourth quarter revenue came at USD$3.68bn while analysts expected USD$3.77bn.   Freeport is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Huntington Bancshares Inc. (HBAN) reported CY4Q2018 financials that disappointed analysts and investors. Huntington generated USD$0.29 of EPS in CY4Q2018 while analyst expectations called for USD$0.32/share. Huntington’s earnings were dragged down by a higher-than-expected provision for loan losses. Huntington is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Intel (INTC) reported fiscal second quarter EPS of USD$1.28 while consensus was for USD$1.22.  Intel fiscal second quarter revenue came at USD$18.66 billion, missing consensus of USD$19.01 billion.  Intel gave guidance for 1Q19 revenue of ~USD$16 billion, well below consensus of USD$17.34 billion and EPS guidance of 87 cents, well below USD$1.22 consensus.  Intel is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Jet Blue (JBLU) reported fourth quarter adjusted EPS of 50 cents while consensus was for 42 cents.  Jet Blue fourth quarter operating revenue came at USD$1.97 billion versus USD$1.96 billion consensus.  Jet Blue is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • McCormick (MKC) reported fourth quarter EPS of USD$1.67 while consensus was for USD$1.70.  McCormick fourth quarter revenue came at USD$1.5 billion versus USD$1.55 billion expeceted.  McCormick is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • Microsoft Corporation’s (MSFT) Bing search engine has officially been banned in China. While other search engines like Alphabet’s (GOOGL) Google were previously banned in China, Bing was allowed to operate because it sensors search results. Microsoft is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas. Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Norfolk Southern (NSC) reported fourth quarter EPS of USD$2.57 while consensus was for USD$2.28.  Norfolk Southern fourth quarter revenue came at USD$2.896 billion while consensus was for USD$2.84 billion.  Norfolk is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Southwest Airlines (LUV) reported fourth quarter EPS of USD$1.17, above the highest estimate, while consensus was for USD$1.07.  Southwest Airline's fourth quarter operating revenue came at USD$5.7 billion.  Revenue per seat mile grew 1.8% in the quarter.  Southwest Airlines is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • Starbucks (SBUX) reported fourth quarter EPS of 69 cents while consensus was for 65 cents.  Starbucks fourth quarter revenue came at USD$6.63 billion while consensus was for USD$6.48 billion.  Starbucks is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • STMicroelectronics (ENXTPA: STM) reported strong CY4Q2018 financials while providing CY1Q2019 guidance that indicates a q/q revenue decrease of about 20.7%, or a y/y decrease of about 5.7%. STMicroelectronics generated USD$418mm of net income in CY4Q2018 while analysts expected just USD$376mm. STM Microelectronics is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Tencent Holdings Ltd. (SEHK: 700), along with private equity firms Hillhouse Capital and KKR & Co., are reportedly considering bids to acquire a major stake in gaming company Nexon Co. (TSE: 3659). Other buyout firms are also reportedly considering the acquisition. As per people familiar with the matter, NXC is currently working with Deutsche Bank and Morgan Stanley to weigh its sale options. Tencent is rated “Attractive” in our China All-Cap Global Top Stock Ideas. Nexon is not rated in our Global Top Stock Ideas.
  • Textron (TXT) reported fourth quarter EPS from continuing operations of USD$1.02 while consensus was for 98 cents.  Textron fourth quarter revenue came at below expectations at USD$3.75 billion while USD$4 billion was consensus.  Textron is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Union Pacific Corporation (UNP) reported CY4Q2018 earnings that beat analysts’ consensus. Union Pacific recorded USD$2.12 EPS in CY4Q2018 while analysts expected USD$2.06/share. Union Pacific’s operating revenue of USD$5.76bn in CY4Q2018 also beat analyst expectations of SUD$5.73bn. Union Pacific is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • UroGen Pharmaceutical (URGN) shares slid after the company an offering of USD$150mm worth of shares at USD$41/share. The USD$41/share target offering price represented a 10.73% discount to Wednesday’s closing price. UroGen is not rated in our Global Top Stock Ideas.
  • Western Digital (WDC) reported fiscal second quarter loss of USD$1.23 per share while consensus was for USD$1.49 earnings.  Western Digital fiscal second quarter revenue came at USD$4.23 billion while consensus was for USD$4.25 billion. Western Digital is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • W.W. Grainger (GWW) announced CY4Q2018 adjusted EPS that beat analyst estimates while reporting CY2019 EPS guidance, the midpoint of which misses analyst estimates. Grainger observed CY4Q2018 adjusted EPS of USD$3.96/share, beating analysts’ consensus of USD$3.59/share. Grainger sees CY2019 EPS of between USD$17.10/share and USD$18.70/share while the analyst consensus was for USD$18.04/share. Grainger is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas. 
  • Xilinx Inc. (XLNX) reported FY3Q2019 financials that largely surprised analyst expectations. Xilinx generated an EPS of USD$0.92 in FY3Q2019 while analysts expected just USD$0.86/share. The earnings surprise, fueled by growth in the company's 5G business, prompted Raymond James analyst Chris Caso to comment in a note to clients, “Boy do we feel dumb for missing this stock.” Xilinx is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas. 

 

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US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -2.08 basis points to 2.56%
  • US 5-Year Treasury Bonds are higher with yields down -2.88 basis points to 2.54%
  • US 10-Year Treasury Bonds are higher with yields down -2.88 basis points to 2.71%
  • The US Treasury 2s-5s Spread has narrowed 0.8 basis points to -0.02%
  • The US Treasury 2s-10s Spread has narrowed 0.8 basis points to 0.15%
  • US Treasury 5s-10s Spread has little changed 0 basis points to 0.1

Currencies

  • EUR€ is down 0.606% against the USD$ in after hours to 1.1312
  • GBP£ is little changed 0.069% against the USD$ in after hours to 1.306
  • CHF is down 0.169% against the USD$ in after hours to 1.0037
  • JPY¥ is little changed 0.027% against the USD$ in after hours to 109.57

Commodities

  • WTI Crude is up 1.07% to USD$52.98/bbl with the Brent-WTI spread down USD$-0.71 to USD$7.81/bbl
  • Gold is little changed -0.13% to USD$1281.02/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

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Outperformers Sector Price 1D % Chg Volume
PG&E Corp Utilities 6.95 74.59%    15,415,288.00
Xilinx Inc Information Technology 91.2 18.44%            4,870,968
Lam Research Corp Information Technology 140 15.70%            4,105,074
Applied Materials Inc Information Technology 33.7 10.23%            6,409,935
KLA-Tencor Corp Information Technology 92.6 7.01%                672,389
 
Underformers Sector Price 1D % Chg Volume
Freeport-McMoRan Inc Materials 11.6 -13.08%          12,981,752
McCormick & Co Inc/MD Consumer Staples 141 -10.54%            1,367,620
Citrix Systems Inc Information Technology 107 -6.26%            1,745,421
Advance Auto Parts Inc Consumer Discretionary 160 -4.88%                246,885
Coty Inc Consumer Staples 7.31 -4.50%            3,030,796

 

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