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US stocks rally sharply after Fed shifts to "patient" stance, says it's "flexible" on balance sheet

Jan 30, 2019

 

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US Markets End of Day Snapshot

  • US stocks rally broadly today in the wake of the Fed changing its stance to "patient" and saying it's flexible on winding down its balance sheet
  • The Fed said of interest rates,  it "will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate"
  • The Fed said of its balance sheet, it is "prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments"
  • Both Fed statements are a significant change from previous statements and have been cheered by investors today
  • The S&P 500 finished up 1.55%, Nasdaq Composite up 2.2%, and Russell 2000 up 1.05%
  • US and Chinese negotiators have begun 2 days of trade talks today in Washington, DC
  • ADP private non-farm jobs report for January came at 213,000, well above 188,000 consensus; down from 271,000 in December
  • Pending home sales in December fell 2.2% m/m, coming worse than the 0.5% growth expected
  • Tech (+3.03%), Consumer Discretionary (+2.16%), and Industrials (+1.55%) stocks were the top performers in the S&P 500 today
  • Consumer Staples (+0.74%), Utilities (+0.65%), and Financials (+0.43%) 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 4.26x
  • 129 stocks in the S&P 500 hit 4-week highs while 9 stocks reached 4-week lows
  • 35 stocks in the S&P 500 closed overbought while 3 stocks closed oversold according to the 16-day RSI Measure
  • 139 stocks in the Nasdaq Composite hit 4-week highs while 31 stocks reached 4-week lows
  • 352 stocks in the Nasdaq Composite closed overbought while 144 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed  down 1.47 points today to 17.66 after closing at 19.13 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Advanced Micro Devices (AMD) reported fiscal first quarter 2019 adjusted EPS of 8 cents matching consensus of 8 cents.  AMD fiscal first quarter revenue came at USD$1.42 billion, in line with consensus of USD$1.44 billion.  AMD gave first quarter 2019 revenue guidance of USD$1.2-1.3 billion, well below consensus of USD$1.47 billion.  AMD is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Alibaba (BABA) announced strong FY3Q2019 financials with growth in cloud computing and entertainment offsetting a slowing online retail business. Bernstein observed an adjusted EPS of 12.19 yuan in FY3Q2019 while analysts expected 11.21 yuan/share. Alibaba generated revenue growth of 41% y/y to USD$117.3bn yuan (USD$17.5bn). Bernstein analyst David Dai wrote in his report that, “Alibaba is the dominant and most profitable leader in China e-commerce.” Alibaba is rated “Unattractive” in our China All-Cap Global Top Stock Ideas.
  • Ally Financial (ALLY) announced fourth quarter 2018 adjusted EPS of USD$0.92, beating the highest analyst estimates that ranged between USD$0.79 and USD$0.88.  Ally Financials fourth quarter 2018 revenue came at USD$1.44bn, falling short of consensus of USD$1.53bn. Ally Financial is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Anthem Inc. (ANTM) reported fourth quarter 2018 adjusted EPS of USD$2.15 in line with consensus of USD$2.20.  Anthem fourth quarter 2018 revenue came at USD$23.73 billion, in line with consensus of USD$23.34 billion.   Anthem gave 2019 EPS guidance of USD$19. Anthem is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
    Apple (AAPL) reported fiscal first quarter 2019 adjusted EPS of USD$4.18 in line with consensus of USD$4.17.  Apple fiscal first quarter 2019 revenue came at USD$84.3 billion, in line with consensus of USD$83.97 billion.  Apple’s gross margin of 38% matched consensus.  Apple reported its first holiday sales decline since 2001 with iPhone sales falling 15%.  CEO Tim Cook outlined life beyond iPhones with growing sales in services and other Apple products.  Apple gave second quarter 2019 revenue guidance of USD$55-59 billion.  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.
  • AT&T Inc. (T) reported fourth quarter 2018 adjusted EPS of USD$0.87 in line with consensus of USD$0.86.  AT&T fourth quarter 2018 revenue came at USD$47.99 billion, in line with consensus of USD$48.49 billion.   AT&T added only 134,000 wireless subscribers, below 208,000 consensus. AT&T is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. 
  • Automatic Data Processing (ADP) reported second quarter 2019 adjusted EPS of USD$1.34  beating the highest analyst estimates that ranged between USD$1.16 and USD$1.23.  ADP second quarter 2019 revenue came at USD$3.51bn, beating consensus of USD$3.44bn.   ADP sees FY2019 EPS growth of 17%, falling short of consensus of 19%. ADP is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Boeing (BA) announced CY4Q2018 earnings and CY2019 guidance that sent the stock price soaring. Boeing reported a CY4Q2018 core EPS of USD$5.48, blowing out consensus of USD$4.59. Boeing sees CY2019 between USD$19.90 and USD$20.10, surpassing analyst expectations of USD$18.44. Boeing is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Check Point Software Technologies (CHKP) announced that it sees revenue for FY2019 between USD$1.94bn and USD$2.04bn while consensus calls for USD$1.99bn. Additionally, Check Point expects adjusted EPS between USD$5.85 and USD$6.25 in FY2019 while analysts expect USD$6.09. Check Point is not rated in our Global Top Stock Ideas.  
  • E-Bay (EBAY) reported fourth quarter EPS of 71 cents above consensus of 68 cents.  E-Bay fourth quarter revenue came at USD$2.88 billion, in line consensus of USD$2.86 billion.  E-Bay gave guidance for first quarter 2019 EPS of 62-64 cents, in line with consensus that is presently 61 cents.  E-Bay is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Facebook (FB) reported fourth quarter 2018 adjusted EPS of USD$2.38 beating consensus of USD$2.18.  Facebook fourth quarter revenue came at USD$16.91 billion, above consensus of USD$16.39 billion.  Facebook reported 2.32 billion monthly daily active users, matching consensus and 1.52 billion daily active users, also matching consensus.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • General Dynamics Corp. (GD) reported fourth quarter 2018 EPS from continuing operations of USD$3.07, beating the consensus of USD$2.98.  General Dynamics fourth quarter 2018 revenue came at USD$10.38bn, edging past the consensus of USD$10.36bn. General Dynamics is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Hess Corp. (HES) reported fourth quarter 2018 adjusted loss per share of USD$0.31, narrower than consensus for a USD$0.37 loss per share.  Hess observed a realized crude price/barrel of USD$58.11 in CY4Q2018 compared to USD$55.44 a year prior. Hess is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Ingersoll-Rand (IR) reported fourth quarter 2018 adjusted EPS of USD$1.31  in line with consensus of USD$1.29.  Ingersoll-Rand fiscal first quarter 2019 revenue came at USD$3.895 billion, in line with consensus of USD$3.85 billion.  Ingersoll-Rand is not rated in our US Large-Cap Global Top Stock Idea
  • Invesco Ltd (IVZ) reported fourth quarter 2018 adjusted EPS of 44 cents well below consensus of 53 cents.  Invesco fourth quarter 2019 revenue came at USD$1.26 billion, in line with consensus of USD$1.3 billion.   Invesco’s assets under management (AUM) came at USD$888.2 billion, below USD$902 billion consensus. Invesco is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas. 
  • Juniper Networks (JNPR) reported fourth quarter adjusted EPS of 59 cents beating by a touch consensus of 57 cents.  Juniper Networks fourth quarter revenue came at USD$1.18 billion, in line with consensus of USD$1.22 billion.  Juniper Networks gave first quarter 2019 EPS guidance of 17-23 cents, well below consensus of 37 cents.  Juniper is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Lonza Group AG (SWX: LONN) surprised investors when it announced that CEO Richard Ridinger is set to step down from his position amid an overhaul to the drug maker’s product portfolio. Marc Funk, who currently heads Lonza’s pharmaceuticals and biotechnology division, will be promoted and take over as CEO. Lonza is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  
  • LVMH SE (ENXTPA: MC) announced CY4Q2018 financials that sent its stock price and other luxury goods peers higher. LVMH generated organic sales growth of 9% in CY4Q2018, meeting analyst estimates, while its fashion and leather goods business surprised analyst expectations and signaled accelerating market share gains. LVMH is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Microsoft (MSFT) reported fiscal second quarter 2019 adjusted EPS of USD$1.10 in line with consensus of USD$1.09.  Microsoft fiscal.  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.
  • McDonald’s Corp. (MCD) announced CY4Q2018 financial results that largely disappointed investors. McDonald’s US comparable sales rose 2.3% in CY4Q2018, missing consensus for 2.4% growth.  McDonald’s generated adjusted EPS of USD$1.97 in CY4Q2018, edging past analyst expectations for USD$1.89. McDonald's is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our Consumer Discretionary Global Top Stock Ideas.
  • Nasdaq (NDAQ) reported fourth quarter 2018 adjusted EPS of USD$1.26 in line with consensus of USD$1.27.  Nasdaq first quarter 2019 revenue came at USD$645 million, in line with consensus of USD$642.3 million.   Nasdaq offered to buy the Oslo Bors for NK152 per share, countering Euronext’s offer.  Nasdaq is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • PE&G (PCG) has formally declared bankruptcy as expected. PE&G will be reorganized and regulators have not indicated yet what time or reorganization they prefer.  Analysts expect major changes, though there is no consensus, on what may end up as the final form of PE&G.  PE&G is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Qualcomm (QCOM) reported fiscal first quarter 2019 EPS of USD$1.20  above consensus of USD$1.09.  Qualcomm fiscal first quarter revenue came at USD$4.82 billion, in line consensus of USD$4.9 billion.  Qualcomm gave guidance for second quarter 2019 revenue of USD$4.4-5.2 billion, in line with consensus that is presently USD$4.83 billion.  Qualcomm is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Royal Caribbean Cruises (RCL) reported fourth quarter 2018 adjusted EPS of USD$1.53, slightly beating consensus of USD$1.51.  Royal Caribbean fourth quarter 2018 revenue came at USD$2.33bn, beating consensus for USD$2.31bn.   Royal Caribbean gave first quarter 2019 adjusted EPS guidance of USD$1.10, higher than analyst expectations for USD$ 1.07. Royal Caribbean is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Silicon Labs (SLAB) announced CY4Q2018 financials and CY1Q2019 guidance that missed the lowest analyst estimates. Silicon Labs generated an adjusted EPS of USD$0.91 while analyst estimates ranged between USD$0.93 and USD$0.95. Silicon Labs sees adjusted EPS of between USD$0.42 and USD$0.52 in CY1Q2018 while analyst estimates ranged between USD$0.72 and USD$0.90. Silicon Labs is rated “Top Buy” in our US SMID-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Stryker Corporation (SYK) reported fourth quarter earnings announced FY2019 guidance that tops analyst expectations. Stryker increased its FY2019 revenue estimate by USD$160mm to USD$14.79bn. JPMorgan analyst Robbie Marcus called the company’s 4Q results a, “picture perfect finish to 2018.” Stryker Corporation is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  
  • Thermo Fisher Scientific (TMO) reported adjusted EPS for CY4Q2018 that beat the highest analyst estimate. Thermo Fisher generated an adjusted EPS of USD$3.25 in CY4Q2018, beating the highest analyst estimates that ranged between USD$3.16 and USD$3.24. Thermo Fisher also generated revenue of USD$6.51bn while analyst estimates ranged between USD$6.19bn and USD$6.28bn. Thermo Fisher is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • T. Rowe Price Group (TROW) reported fourth quarter 2018 adjusted EPS of USD$1.54, falling short of consensus of USD$1.66.  T. Rowe fourth quarter 2018 revenue came at USD$1.31bn, falling just short of consensus of USD$1.33bn.   T. Rowe’s assets under management came in at USD$962bn, down 2.9% from the previous quarter. T. Rowe is rated “ Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Vale (VALE) said it will close some of its mining productions involved the recent dam disaster.  The death toll has risen to 84 people and is expected to rise further.  The price of iron ore has surged in the wake of the disaster and Vale is a significant supplier of iron ore to the world.  Vale is rated “Top Short” in our Brazil All-Cap Global Top Stock Ideas.
  • Visa (V) reported fiscal first quarter EPS of USD$1.30 beating consensus of USD$1.25.  Visa fiscal first quarter revenue came at USD$5.51 billion, above consensus of USD$5.41 billion.  Visa is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology.
  • Wirecard AG (XTRA: WDI) shares fell as much as 25% after a report from the Financial Times suggests that one of the company’s senior executives is suspected of using forged contracts for multiple suspicious transactions. The company has since responded via a public statement that reads, “Today the Financial Times has published a false, inaccurate, misleading and defamatory article. This article lacks any substance and is completely meaningless.” Wirecard is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Wynn Resorts (WYNN) reported fourth quarter adjusted EPS of USD$1.09 missing consensus of USD$1.31.  Wynn Resorts fourth quarter revenue came at USD$1.69 billion, above consensus of USD$1.61 billion.  Wynn Resorts works gave first quarter 2019 EPS guidance of 17-23 cents, well below consensus of 37 cents.  Wynn Resorts 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 -5.65 basis points to 2.51%
  • US 5-Year Treasury Bonds are higher with yields down -5.36 basis points to 2.49%
  • US 10-Year Treasury Bonds are higher with yields down -2.52 basis points to 2.68%
  • The US Treasury 2s-5s Spread has widened 0.29 basis points to -0.02%
  • The US Treasury 2s-10s Spread has widened 3.13 basis points to 0.17%
  • US Treasury 5s-10s Spread has widened 2.84 basis points to 0.19%

Currencies

  • EUR€ is up 0.411% against the USD$ in after hours to 1.148
  • GBP£ is up 0.367% against the USD$ in after hours to 1.3114
  • CHF is little changed 0.04% against the USD$ in after hours to 1.0058
  • JPY¥ is down 0.347% against the USD$ in after hours to 109.02

Commodities

  • WTI Crude is up 1.73% to USD$54.23/bbl with the Brent-WTI spread down USD$-0.84 to USD$7.15/bbl
  • Gold is up 0.59% to USD$1319.5/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
Advanced Micro Devices Inc Information Technology 20.4 19.95%    39,645,479.00
Stryker Corp Health Care 162 11.37%                942,071
Anthem Inc Health Care 260 9.11%                598,139
Royal Caribbean Cruises Ltd Consumer Discretionary 106 7.97%                674,411
Freeport-McMoRan Inc Materials 11.6 7.85%            9,365,613
 
Underformers Sector Price 1D % Chg Volume
Juniper Networks Inc Information Technology 28.1 -7.58%            2,200,746
Franklin Resources Inc Financials 30.6 -6.73%            1,214,890
Illumina Inc Health Care 305 -4.45%                861,546
AT&T Inc Communication Services 30.6 -4.33%          19,530,141
T Rowe Price Group Inc Financials 92.7 -3.78%            1,821,117
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY