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US stocks close mostly higher, though off session highs, with trade progress animating investors

Feb 25, 2019

 

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US Markets End of Day Snapshot

  • Most US stocks post gains, though markets close off session highs, with optimism from US-China trade progress animating investors today
  • The S&P 500 finished up 0.12%, Nasdaq Composite up 0.36%, and Russell 2000 is down 0.08%
  • President Trump said “The US had made substantial progress in our trade talks with China” in a tweet late this weekend 
  • While Chinese officials echoed President Trump’s optimistic tone, China’s official Xinhua News Agency later published a commentary saying talk may face “new uncertainties” and that the challenges between the countries are “long-term, complicated and arduous” 
  • Federal Reserve President Jerome Powell will give his semi-annual update to Congress, addressing both houses over 2 days later this week
  • Dallas Fed Manufacturing Index for February came at 13.1, well above the 4.7 expected and up from 1.0 in January. The beat may bring back talks of a rate hike
  • US Wholesale inventories rose 1.1% in December, above the 0.4% expected and above the 0.3% rise in November
  • Comments from Chinese officials make clear their near-term focus will be on growth and not the deleveraging of heavily leveraged companies
  • Emerging Markets ETFs rose for the 19th straight week and have seen USD$31.7 billion 
  • Opposition Labor leader Jeremy Corbyn has shifted his position and now supports another public vote on Brexit without giving specifics
  • PM Theresa May has pushed back the deadline for a final vote on its revised Brexit deal to March 12th
  • Press reports are that the EU is considering a 21-month extension of Brexit negotiations, believing 3 months is not sufficient time
  • Materials (+0.65%), Tech (+0.49%), and Financials (+0.42%) stocks were the top performers in the S&P 500 today
  • Consumer Staples (-0.51%), Utilities (-0.64%), and Real Estate (-0.81%) stocks were the worst performers in the S&P 500 today
  • Investor sentiment for US stocks finished negative with the advance/decline ratio for the S&P 500 closing at 0.92x
  • 185 stocks in the S&P 500 hit 4-week highs while 14 stocks reached 4-week lows
  • 144 stocks in the S&P 500 closed overbought while 2 stocks closed oversold according to the 16-day RSI Measure
  • 480 stocks in the Nasdaq Composite hit 4-week highs while 30 stocks reached 4-week lows
  • 605 stocks in the Nasdaq Composite closed overbought while 126 stocks closed oversold according to the 16-day RSI Measure
  • The VIX finished flat at 13.74 after closing at 13.51 last week

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Amazon (AMZN) said its thoughts are with the crew after one of its 767 cargo planes crashed in Texas on Saturday.  The plane had a crew of three and upon descent to land it crashed.  Debris from the crash was strewn over a mile-long stretch.  The cargo jet was owned and operated by Atlas Air Worldwide (AAWW).  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.  Atlas Air Worldwide is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.  Danaher is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Barrick Gold (TSX:ABX) has made a hostile bid for Newmont Mining (NEM) in a USD$19.4 billion deal.  The deal offers Newmont at its market price as Barrick attempts its second acquisition in the last 6 months.  Barrick and Newmont have had on and off talks about linking up for the last few years.  The gold sector has sees a number of recent deals as its consolidation ramps up.  Barrick Gold is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.  Newmont Mining is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Covestro (DB:1COV) gave guidance well below market consensus.  Covestro said it sees ebitda of 1.5-2 billion euros, well below the 2.07 billion euros consensus.  Covestro said the glut of advanced polymers and plastics in the market will weigh on its results this year.  Covestro cited Chinese companies undercutting its pricing.  Covestro is rated “Unattractive” in our European Large-Cap Global Top Stick Ideas. 
  • Etsy (ETSY) reported fourth quarter EPS of USD$0.32 well above consensus of USD$0.25.  Etsy reported fourth quarter adjusted revenue of USD$200 million beating consensus of USD$194.9 million.  Etsy reported fourth quarter adjusted ebitda of USD$51.4 million.  Etsy sees 2019 revenue growth of 29-32% while consensus is 30%. Etsy is rated “Top Short” in our Large-Cap Global Top Stock Ideas and “Neutral” in our Information Technology Global Top Stock Ideas.
  • Hammerson Plc (LSE: HMSO) shares edged higher following reports that the company is in discussions to sell 900mm pounds (USD$1.2bn) worth of properties. The discussions come following increased pressure from activist shareholder Elliott Advisors after the value of the company’s portfolio dropped 5.9% in 2018. Hammerson is rated “Top Short” in our United Kingdom All-Cap Global Top Stock Ideas.
  • General Electric (GE) is selling its biopharma unit to Danaher (DHR)  in a USD$21.4 billion deal.  GE will receive USD$21.4 billion in cash from the sale while also transferring certain pension liabilities to Danaher.  GE CEO Larry Culp ran Danaher for 10 years until 2014.  GE will halt the spinoff of its broader healthcare unit to focus on the transaction.  General Electric is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Top Short” in our US Industrials Global Top Stock Ideas.
  • Hertz (HTZ) reported fourth quarter loss of 53 cents per share beating consensus of an 82 cents per share loss.  Hertz reported fourth quarter adjusted revenue of USD$2.3 billion beating consensus of USD$2.1 billion.  Hertz posted 10% revenue growth in the fourth quarter.  Hertz is rated “Unattractive” in our Large-Cap Global Top Stock Ideas and “Unattractive” in our Industrials Global Top Stock Ideas.
  • Ipsen SA (ENXTPA:IPN) has agreed to acquire Clementia Pharmaceuticals (CMTA) in a USD$1.3 billion deal.  Ipsen will pay USD$25 per share up front and an additional right value of USD$6 per share.  This is a 77% premium to the last close for the Canadian company.  The acquisition of Clementia will expand the rare disease portfolio of Ipsen, an area of biotech that has seen a lot of deal focus recently.  Ipsen is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas.  Clementia is not rated in our Global Top Stock Ideas.
  • Warren Buffet said this morning he was “wrong in a couple of ways” about Kraft Heinz Corp. (KHC), which he insists is still a “wonderful” business.  Buffet said “we overpaid for Kraft”, a statement not normally heard from him.  Kraft Heinz Corp took at USD$15.4 billion write-down as part of its most recent results last week, surprising the market.  Kraft Heinz Corp is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Microsoft (MSFT) is dropping the price of its augmented reality goggles HoloLens 2.  The goggles will be cut to USD$3,500 from USD$5,000.  The HoloLens 2 goggles are targeting commercial applications and not consumers at this point, things such as teaching industrial processes or other educational applications.  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. 
  • Persimmon (LSE: PSN) shares slipped notably lower after a weekend report from the Financial Times indicates that the homebuilder could be banned from the United Kingdom’s Help to Buy program. The report cites that Housing Secretary James Brokenshire is concerned that the company requires buyers to pay annual rent for their new home. Persimmon is rated “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Ping An Insurance Co. (SEHK:2318) is planning an IPO of its fintech unit that could value it at up to USD$8 billion.  Ping An Insurance plans an IPO of its OneConnect unit in Hong Kong that could see it reap up to USD$1 billion in the offering.  The IPO could happen as soon as the second half of 2019.  Ping An Insurance is rated “Neutral” in our China All-Cap Global Top Stock Ideas. 
  • Piper Jaffray (PJC) announced it will acquire Weeden & Co., an execution broker-dealer.  Piper Jaffray will pay USD$42 million with USD$24.5 million in cash and USD$17.5 million in retention stock.   Weeden’s owners also have a change to earn an additional USD$31.5 million in non-equity compensation if certain sales and trading revenue targets are hit.  Piper Jaffray is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas.
  • Puma (DB:PUM) was cut to underperform from neutral at Credit Suisse while its price target was cut to 417 euros from 445 euros.  Credit Suisse made the cut due to its valuation, calling it a bit expensive at these levels while highlighting that Credit Suisse’s EPS expectations are below consensus for the coming years.  Puma is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • Roche (SWX:ROG) is acquiring Spark Therapeutics (ONCE) in a USD$4.8 billion deal.  Roche is paying a 122% premium for Sparks which will transform it from a laggard to a leader in gene therapy, paying USD$114.50 or share for Spark.  Spark will give Roche a stable of experimental drugs that it is presently lacking.  Roche is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.  Spark Therapeutics is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Royal Dutch Shell (ENXTAM:RDSA) said today it expects Europe to be the fastest growing LNG (liquified natural gas) next year.  Royal Dutch Shell controls 22% of the LNG market in Europe.   Russia is expected to increase its exports significantly to Europe next year and Shell expects the market to easily absorb it all.  Royal Dutch Shell is rated “Attractive” in our European Large-Cap Global Top Stock Ideas and “Attractive” in our United Kingdon All-Cap Global Top Stock Ideas.
  • Senvion SA (DB: SEN) shares fell to record lows after the company postponed the publication of its FY2018 financial results. Senvion told investors on Sunday that it is seeking a, “restructuring opinion,” the first step required in Germany to begin negations with banks. Stephan Lienert, a credit analyst with Jefferies, wrote, “We believe delaying results and commissioning solvency reports simply means the cash issues is more acute than even we estimate.” Senvion is not rated in our Global Top Stock Ideas.
  • Shake Shack (SHAK) reported fourth quarter adjusted EPS of USD$0.06 beating consensus of USD$0.03.  Shake Shack reported fourth quarter adjusted revenue of USD$124.3 million beating consensus of USD$119.2 million.  Shake Shack reported fourth quarter same store sales growth of 2.3% while consensus was for a drop of 1.2%.  Shake Shack is rated “Unattractive” in our Large-Cap Global Top Stock Ideas and “Neutral” in our Consumer Discretionary Global Top Stock Ideas.
  • Sykes Enterprises (SYKE) reported fourth quarter adjusted EPS of USD$0.58 missing consensus of USD$0.66.  Sykes Enterprises reported fourth quarter adjusted revenue of USD$415.2 million missing consensus of USD$417.5 million.  Sykes Enterprises gave first quarter 2019 revenue guidance of USD$403-408 million, below present consensus of USD$.  Sykes Enterprises is rated “Attractive” in our SMID-Cap Global Top Stock Ideas and “Neutral” in our Information Technology Global Top Stock Ideas.
  • Telefonica (BME:TEF) said it has “all possibilities open, organically or inorganically, in Mexico”, according to its CEO.  The business in Mexico has underperformed though it is improving, he said.  Telefonica is looking at and questioning every unit where the capital employed is not meeting target returns.  Telefonica 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 1.45 basis points to 2.50%
  • US 5-Year Treasury Bonds are lower with yields up 0.85 basis points to 2.47%
  • US 10-Year Treasury Bonds are lower with yields up 1.44 basis points to 2.66%
  • The US Treasury 2s-5s Spread has narrowed 0.6 basis points to -0.03%
  • The US Treasury 2s-10s Spread has narrowed 0.01 basis points to 0.16%
  • US Treasury 5s-10s Spread has widened 0.59 basis points to 0.19%

Currencies

  • EUR€ is up 0.229% against the USD$ in after hours to 1.1361
  • GBP£ is up 0.352% against the USD$ in after hours to 1.3099
  • CHF is little changed 0.01% against the USD$ in after hours to 0.9996
  • JPY¥ is up 0.325% against the USD$ in after hours to 111.05

Commodities

  • WTI Crude is down -3.12% to USD$55.33/bbl with the Brent-WTI spread down USD$-0.37 to USD$8.87/bbl
  • Gold is little changed -0.19% to USD$1326.9/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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Get Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your ReturnsGet Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your Returns

S&P 500 Movers

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Outperformers Sector Price 1D % Chg Volume
Danaher Corp Health Care 105 8.52%            1,437,289
General Electric Co Industrials 8.72 6.39%          37,425,364
Western Digital Corp Information Technology 37.7 3.78%            1,144,346
Goodyear Tire & Rubber Co/The Consumer Discretionary 19 3.77%                708,703
Align Technology Inc Health Care 195 3.29%                500,372
 
Underformers Sector Price 1D % Chg Volume
H&R Block Inc Consumer Discretionary 25.4 -3.31%                376,208
TripAdvisor Inc Communication Services 56.6 -3.22%            1,074,786
DISH Network Corp Communication Services 28.2 -2.65%                780,410
AutoZone Inc Consumer Discretionary 829 -2.42%                  61,941
Advance Auto Parts Inc Consumer Discretionary 160 -2.33%                312,406
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY