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US stocks mixed midday on weak retail sales data and scant progress in trade talks

Feb 14, 2019

 

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Market data as of 12 noon EST

US Market Snapshot

  • US stocks are mixed midday, with little movement in the wake of weak retail sales data and news of scant progress in Beijing trade talks
  • US retails sales fell 1.2% in December, coming well below the 0.1% growth expected and down from 0.2% the prior month
  • News from Beijing is that talks among senior trade officials have yielded little progress as the 2 countries remain at odds over key points of trade negotiations
  • The S&P 500 is currently down 0.27%, Nasdaq Composite is up 0.08%, and Russell 2000 is up 0.17%
  • US initial jobless claims for the week of February 9th came at 239,000, above 225,000 expected and in line with 234,000 of the prior week
  • US producer price index (PPI) fell 0.1% in January compared to a 0.1% rise expected
  • US companies have announced USD$140 billion in stock repurchases YTD, a 28% increase vs the first 6 weeks of the year in CY2018.  While the rate of increase is down from 58% Y/Y increase in CY2018, the rate of growth is still double average per annum growth rate for the past 5 years. 
  • Yesterday, we discussed challenges facing S&P 500 companies as they struggle to manage current levels of profitability.  A further dive into the subject underscores the fact that rapid “operating” spending growth has driven the recent stall in operating margin improvement (and in some cases, has led to a slight contraction). Going forward, managing operating expenses, not navigating an environment with higher tariffs or raw materials, will be key to maintaining peak operating margins.
  • Energy (+0.4%), Telecom (+0.27%), and Healthcare (+0.17%) stocks are the top performers in the S&P 500 today
  • Industrials (-0.57%), Consumer Staples (-1.03%), and Financials (-1.01%) 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 0.68x
  • 192 stocks in the S&P500 are at 4-week highs while 5 stocks are at 4-week lows
  • 102 stocks in the S&P 500 are overbought while 0 stocks are oversold according to the 16-day RSI Measure
  • 331 stocks in the Nasdaq Composite are at 4-week highs while 24 stocks are at 4-week lows
  • 633 stocks in the Nasdaq Composite are overbought while 99 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently little changed at 15.56 from yesterday's close of 15.65

Stocks Trending in the News

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  • Airbus (ENXTPA: AIR) will cease production of its jumbo A380 airliner.  The 555-seat plane never caught on with airlines as Airbus had hoped.  A number of airlines cut their orders for the plane making it unprofitable to keep the production line open.  Airbus is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Amazon.com Inc. (AMZN) said in a statement Thursday that it will not move forward with building its headquarters in New York, citing mounting opposition. Amazon also said in its statement that the company will not reopen the search for a replacement location. The US online retail giant will, however, move forward with its planned headquarters in Virginia and Nashville. Amazon is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Arch Coal Inc. (ARCH) shares rose after the second-largest producer of coal in the US took a step towards opening a new mine. Arch Coal told investors that it expects to invest up to USD$390mm over the next 3 years to develop the Leer South mine in West Virginia. Arch Coal expects to open the new mine in late 2021. Arch Coal is rated “Top Buy” in our US SMID-Cap Global Top Stock Ideas.  
  • Blackstone Group LP (BX) will acquire half of Taubman Centers Inc. (TCO) shares for about USD$315mm after transaction costs and allocating a share of third party debt to Blackstone. The acquisition comes after Blackstone pledged that it would buy more in Asia after receiving USD$9.4bn from two funds dedicated to the Asia region. Blackstone is rated “Top Short” in our US Large-Cap Global Top Stock Ideas. Taubman Centers is rated “Top Buy” in our US SMID-Cap Global Top Stock Ideas.  
  • Canada Goose Holdings (TSX: GOOS) shares sank after the company told investors that its planned expansion into China came at an unfortunate time.  “We can’t control politicians,” said Canada Goose CEO Dani Reiss, adding, “We’re really happy with our Chinese business plan and the way we plan to approach it. It’d been executed really well.” Canada Goose is not rated in our Global Top Stock Ideas.  
  • Cisco Systems (CSCO) reported second quarter 2019 adjusted EPS of USD$0.73 in line with consensus of USD$0.72.  Cisco Systems reported second quarter total sales of USD$12.4 billion matching consensus of USD$12.42 billion.  Cisco Systems gave third quarter 2019 EPS guidance of 76-78 cents, 76 cents is consensus.  Its dividend was raised 6% and a USD$15 billion share buyback plan was announced.  Cisco Systems is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • CME Group Inc (CME) reported CY4Q2018 adjusted EPS of USD$1.77 while analysts expected USD$1.73. CME Group Inc generated net sales of USD$1.24bn in CY4Q2018, beating consensus of USD$1.21bn. CME Group Inc is rated "Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Coca-Cola Co. (KO) shares dropped after the company announced CY4Q2018 comparable EPS of USD$0.43 that was in line with consensus for USD$0.43. Coca Cola told analysts that it sees FY2019 EPS growth between –1% and 1% and organic revenue growth of about 4%. Coca-Cola is rated "Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Duke Energy Corp (DUK) reported CY4Q2018 adjusted EPS of USD$0.84, slightly missing consensus of USD$0.89. Duke Energy Corp operating revenue of USD$6.12bn in CY4Q2018, beating consensus of USD$5.85bn. Duke Energy Corp expects FY2019 adjusted EPS between USD$4.80 and USD$5.20, the midpoint of which is slightly above consensus of USD$4.95. Duke Energy Corp is rated "Neutral” in our US Large-Cap Global Top Stock Ideas.
  • EQT Corp (EQT) reported CY4Q2018 adjusted EPS of USD$0.79 while analysts expected USD$0.81. EQT Corp generated adjusted cash flow from operations of USD$693.0mm in CY4Q2018, largely beating consensus of USD$415.6mm. EQT Corp expects FY2019 adjusted cash flow from operations between USD$2.2bn and USD$2.3bn. EQT Corp is rated "Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Incyte Corp (INCY) announced CY4Q2018 adjusted EPS of USD$0.40 while consensus was for USD$0.49. Incyte Corp reported adjusted revenue of USD$468.4mm in CY4Q2018 while analysts expected USD$485.8mm. Incyte Corp is rated "Neutral” in our US Large-Cap Global Top Stock Ideas.
  • IQVIA Holdings Inc (IQV) announced CY4Q2018 adjusted EPS of USD$1.50 while consensus was for USD$1.47. IQVIA Holdings Inc reported net sales of USD$2.69bn in CY4Q2018 while analysts expected USD$2.62bn. IQVIA Holdings Inc sees FY2019 adjusted EPS between USD$6.20 and USD$6.40, the midpoint of which is slightly above consensus of USD$6.24. IQVIA Holdings Inc is rated "Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Iron Mountain Inc (IRM) reported CY4Q2018 adjusted funds from operations of USD$0.56 while analysts expected USD$0.52. Iron Mountain Inc generated net sales of USD$1.06bn in CY4Q2018, matching consensus of USD$1.06bn. Iron Mountain Inc expects FY2019 adjusted EPS revenue between USD$4.20bn and USD$4.40bn, the midpoint of which is below consensus of USD$4.38bn. Iron Mountain Inc is rated "Neutral” in our US Large-Cap Global Top Stock Ideas.
  • MGM Resorts (MGM) reported fourth quarter adjusted loss of USD$0.06 per share including a 17 cents per share non-recurring income tax expense.  MGM Resorts reported fourth quarter revenue of USD$3.05 billion beating consensus of USD$2.99 billion.   MGM Resorts is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • NetApp (NTAP) reported third quarter 2019 adjusted EPS of USD$1.20 beating consensus of USD$1.15.  NetApp reported fourth quarter revenue of USD$1.56 billion just below consensus of USD$1.6 billion.  NetApp gave fourth quarter 2019 EPS guidance of USD$1.22-1.28, USD$1.25 is consensus.  NetApp is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Six Flags (SIX) reported fourth quarter adjusted EPS of USD$0.93 which may not compare with consensus of USD$0.25.  Six Flags reported fourth quarter revenue of USD$269.5 million missing consensus of USD$284.4 million.  Six Flags is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Tempur Sealy International Inc (TPX) announced CY4Q2018 adjusted EPS of USD$0.90, missing consensus of USD$0.97. Tempur Sealy International Inc reported net sales of USD$646.1mm in CY4Q2018, beating analyst expectations of USD$659.5mm. Tempur Sealy International Inc sees FY2019 adjusted Ebitda between USD$425.0mm and USD$475.0mm, the midpoint of which misses consensus of USD$478.8mm. Tempur Sealy International Inc is rated "Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • TransUnion (TRU) announced CY4Q2018 adjusted EPS of USD$0.66 while consensus was for USD$0.63. TransUnion reported net sales of USD$613.1mm in CY4Q2018 while analysts expected USD$620.0mm. TransUnion sees FY2019 adjusted EPS between USD$2.57 and USD$2.63, the midpoint of which misses consensus of USD$2.81. TransUnion is rated "Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Waste Management Inc (WM) announced CY4Q2018 adjusted EPS of USD$1.13 while consensus was for USD$1.06. Waste Management Inc reported operating revenue of USD$3.84bn in CY4Q2018 while analysts expected USD$3.78bn. Waste Management Inc sees FY2019 adjusted EPS between USD$4.28 and USD$4.38, the midpoint of which is below consensus of USD$4.44. Waste Management Inc is rated "Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Yelp (YELP) reported fourth quarter adjusted EPS of USD$0.37 in line with consensus of USD$0.36. Yelp reported fourth quarter net revenue of USD$243.7 million matching consensus of USD$241 million.  Yelp is targeting mid-teen revenue growth over the next 5 years.  Yelp is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas
  • YETI Holdings Inc (YETI) reported CY4Q2018 adjusted EPS of USD$0.38 while analysts expected USD$0.34. YETI Holdings Inc expects FY2019 adjusted EPS between USD$0.99 and USD$1.04, surpassing consensus of USD$0.93. YETI Holdings Inc is rated "Neutral” in our US SMID-Cap Global Top Stock Ideas.
  • Zoetis Inc (ZTS) reported CY4Q2018 adjusted EPS of USD$0.79 while analysts expected USD$0.77. Zoetis Inc generated net sales of USD$1.56bn in CY4Q2018, beating consensus of USD$1.52bn. Zoetis Inc expects FY2019 adjusted EPS between USD$3.42 and USD$3.52, the midpoint of which surpasses consensus of USD$3.43. Zoetis Inc is rated "Attractive” 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 -2.88 basis points to 2.5017%
  • US 5-Year Treasury Bonds are higher with yields down -4.38 basis points to 2.4797%
  • US 10-Year Treasury Bonds are higher with yields down -3.59 basis points to 2.6662%
  • The US Treasury 2s-5s Spread has narrowed 1.5 basis points to -0.02%
  • The US Treasury 2s-10s Spread has narrowed 0.71 basis points to 0.16%
  • US Treasury 5s-10s Spread has widened 0.79 basis points to 0.1

Currencies

  • EUR€ is currently up 0.222% against the USD$ to 1.1286
  • GBP£ is currently down 0.374% against the USD$ to 1.2798
  • CHF is currently up 0.303% against the USD$ to 0.9938
  • JPY¥ is currently down 0.297% against the USD$ to 110.68

Commodities

  • WTI Crude is currently up 0.37% to USD$54.1/bbl with the Brent-WTI spread up USD$0.69 to USD$9.97/bbl
  • Gold is currently up 0.41% to USD$1311.6/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
Marathon Oil Corp Energy 15.8 8.36%            3,449,492
IQVIA Holdings Inc Health Care 123 7.30%                209,058
Equinix Inc Real Estate 383 6.23%                178,326
Vulcan Materials Co Materials 100 5.68%                217,231
Zoetis Inc Health Care 84.7 4.99%                294,910
 
Underperformers Sector Price 1D % Chg Volume
International Flavors & Fragrances Inc Materials 133 -10.47%                269,739
CenturyLink Inc Communication Services 16.2 -9.66%            5,095,071
Coca-Cola Co/The Consumer Staples 47.6 -7.23%            4,814,049
American International Group Inc Financials 42.5 -6.63%            2,073,014
NetApp Inc Information Technology 62.4 -6.24%            1,192,814
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