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Tech shares lead US stocks higher, building on Friday's gains

Feb 04, 2019

 

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Market data as of 12:30pm EST

US Market Snapshot

  • US stocks are higher midday with tech share leading the gains despite weak durable goods and factory orders data 
  • The S&P 500 is currently up 0.25%, Nasdaq Composite is up 0.89%, and Russell 2000 is up 0.7%
  • US November factory orders fell 0.6%, much below the 0.3% growth expected
  • US November durable goods orders grew at only 0.7%, well below 1.5% expected
  • President Trump said in an interview Sunday that talks with China are, "doing very well" after the 2 countries met for 2 days last week
  • 4Q Earnings season for the S&P 500, to date, has been better than feared with 60% of reports beating top-line estimates and 75% beating earnings expectations.  However, market strategists point out that the magnitude of earnings beats is the lowest it has been in 7 years.
  • JP Morgan argues investor shouldn’t wait for analysts to upgrade estimates for stocks as history shows that positive earnings revisions can sometimes lag the stock market by over a year!  JP Morgan uses 2016 as a recent example where the market bottomed out in February, but analyst earnings revisions only turned positive near the end of the year.  The bank argues that the current positive earnings cycle should continue into CY2019, fueled by continued robust economic expansion.
  • Low Volatility may be a crowded factor with 12-month Forward P/E for the S&P 500 Low Volatility Index is nearing an all-time high.  Institutional investors continue to worry that the rich valuations for the factor group may cause it to structurally underperform the next time we see a sell-off in S&P 500 stocks.
  • Tech (+1.41%), Consumer Discretionary (+0.53%), and Industrials (+0.48%) stocks are the top performers in the S&P 500 today
  • Energy (-0.5%), Materials (-0.72%), and Healthcare (-0.83%) 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 1.23x
  • 209 stocks in the S&P500 are at 4-week highs while 5 stocks are at 4-week lows
  • 59 stocks in the S&P 500 are overbought while 1 stock are oversold according to the 16-day RSI Measure
  • 213 stocks in the Nasdaq Composite are at 4-week highs while 19 stocks are at 4-week lows
  • 571 stocks in the Nasdaq Composite are overbought while 119 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently little changed at 15.87 from yesterday's close of 16.14

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Alexion Pharmaceuticals, Inc. (ALXN) announced CY4Q2018 financials and CY2019 earnings guidance that beat consensus. Alexion generated an adjusted EPS of USD$2.14 in CY4Q2018, beating the highest analyst estimates that ranged between USD$1.69 and USD$1.96. Alexion sees an adjusted EPS of between USD$9.10 and USD$9.30, the midpoint of which surpasses analyst estimates for USD$8.79. Alexion is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Bristol Myers Squibb Co. (BMY) shares gained after activist investor hedge fund Starboard Value said it took a position in the drug maker. Shares of Bristol Myers sank last month after the company acquired Celgene Corp. (CELG) for a record USD$74bn. Bristol Myers is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Clorox (CLX) reported second quarter 2019 adjusted EPS of USD$1.40 beating consensus of USD$1.30.  Clorox second quarter 2019 revenue came at USD$1.47 billion, in line with consensus of USD$1.47 billion.  Clorox works gave fourth quarter 2019 EPS guidance of USD$6.20-6.40, in line with consensus.  Clorox is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Colliers International (TSX: CIGI) was upgraded to outperform from market perform at JMP Securities.  An improved outlook for the next year was cited in the upgrade.  Colliers International is not rated in our Global Top Stock Ideas.
  • Diodes (DIOD) is buying a wafer fabrication facility in Scotland from Texas Instruments (TXN).  Diode said it expects the deal to be accretive but did not disclose terms of the deal.  Diodes will continue to manufacture Texas Instruments’ Analog products.  Diodes is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Texas Instruments 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.
  • Ellie Mae (ELLI) shares rose after a DealReporter story broke late Friday that the company hired Morgan Stanley to explore a sale of the company. Many analysts across the industry are questioning if Ellie Mae would fetch much of a premium if acquired. Compass Point, for example, sees Elli Mae’s best-case scenario as being acquired at a 7%-27% premium on Friday’s closing share price. Ellie Mae is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Impala Platinum Ltd. (JSE: IMP) shares rose the most in 3 months after the company announced a rebound in its FY1H2019 profit. The world's second-largest producer of platinum said on Monday that a rally in palladium prices that offset near decade-low prices in platinum drove the company’s larger-than-expected profit in FY1H2019. Impala Platinum is not rated in our Global Top Stock Ideas.
  • Nasdaq (NDAQ) formally confirmed its plans to bid for the Oslo Bors for 152 kronor per share.  Nasdaq is besting Euronext’s (ENXTPA: ENX) offer by 5%.  With the formal publication of Nasdaq’s offer, Euronext said it is assessing its original offer.  Nasdaq is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Euronext is rated “Top Buy” in our European SMID-Cap Global Top Stock Ideas.
  • Nyrstar (ENXTBR: NYR) lowered its profit outlook on Friday and said it faces tough liquidity conditions this year.  Nyrstar is trying to restructure debt coming due later in the year.  Nyrstar said it continues to explore ways to improve liquidity.  Nyrstar is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.  
  • Papa John’s International (PZZA) has received a USD$200mm investment from Starboard Value LP. As part of the investment, Starboard Value LP EO Jeffrey Smith will become the new Chairman of the Board of Directors for Papa Johns. Papa Johns is rated “Top Short” in our US Large-Cap Global Top Stock ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Sony (TSE: 6758) reported a 14% drop in operating income to 73 billion yen (USD^666 million).  Sony’s weak results came from weak PlayStation sales, Sony sold only 8.1 PS4 consoles this holiday season, down from 9 million a year ago.  Analysts comments have generally been negative with Macquarie downgrading the stock to hold from buy.  Sony is rated is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.
  • Sysco (SYY) announced FY2Q2019 earnings that edge past analyst estimates. Sysco generated an adjusted EPS of USD$0.75 in FY2Q2019 while consensus called for USD$0.73. Sysco’s revenue in FY2Q2019 of USD$14.77bn slightly missed analyst expectations for USD$14.78bn. Sysco is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Tesla Inc. (TSLA) announced the acquisition of battery-technology company Maxwell Technologies (MXWL) for USD$218mm in stock. The acquisition for USD$4.75/share represents a ~55% premium on Friday’s closing price of Maxwell Technologies shares. Maxwell Technologies will provide Tesla with a short-term energy storage technology solution that Elon Musk has called a key to the future of electric cars in the past. Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas. Maxwell Technologies is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.
  • Ultimate Software Group (ULTI) will be acquired by an investor group led by Helman & Friedman Capital for USD$11bn. Ultimate Software Group shareholders will receive USD$331.50 of cash per share, representing a ~32% premium on the company’s average stock price over the last 30 days. Ultimate Software Group is rated “Neutral” in our US Large-Cap Global Top Stock ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Wirecard (XTRA: WDI) is denying reports of fraud, saying “we fundamentally contradict” press reports fraud in Singapore.  Last week the Financial Times reported that an external law firm found evidence indicating, “serious offenses of forgery and/or of falsification of accounts.”  Authorities in Singapore have launched an investigation.  Wirecard is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.

 

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US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 2.84 basis points to 2.51%
  • US 5-Year Treasury Bonds are lower with yields up 3.19 basis points to 2.51%
  • US 10-Year Treasury Bonds are lower with yields up 4.11 basis points to 2.69%
  • The US Treasury 2s-5s Spread has widened 0.35 basis points to 0%
  • The US Treasury 2s-10s Spread has widened 1.27 basis points to 0.18%
  • US Treasury 5s-10s Spread has widened 0.92 basis points to 0.18%

Currencies

  • EUR€ is currently down 0.209% against the USD$ to 1.1432
  • GBP£ is currently down 0.222% against the USD$ to 1.305
  • CHF is currently down 0.229% against the USD$ to 1.0023
  • JPY¥ is currently up 0.411% against the USD$ to 109.95

Commodities

  • WTI Crude is currently down -1.99% to USD$54.16/bbl with the Brent-WTI spread up USD$1.35 to USD$7.98/bbl
  • Gold is currently down -0.33% to USD$1313.69/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
Clorox Co/The Consumer Staples 152 6.84%          281,330.00
Sysco Corp Consumer Staples 62.8 4.31%                646,415
Raytheon Co Industrials 160 3.85%                162,048
NVIDIA Corp Information Technology 150 3.85%            1,769,404
Affiliated Managers Group Inc Financials 104 3.57%                  45,528
 
Underperformers Sector Price 1D % Chg Volume
Intuit Inc Information Technology 210 2.91%          193,374.00
Netflix Inc Communication Services 354 2.84%                967,010
Freeport-McMoRan Inc Materials 11.6 2.78%            1,658,115
Apple Inc Information Technology 153 2.74%            3,213,280
Microsoft Corp Information Technology 105 2.68%            3,718,918
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