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US stocks rallying midday with tech shares leading the risk-on movement

Mar 11, 2019

 

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Market data as of 12 noon EST

US Market Snapshot

  • US stocks are rising midday with better-than-expected retails sales calming some of the concerns from Friday's weak payrolls 
  • The S&P 500 is currently up 1.07%, Nasdaq Composite is up 1.73%, and Russell 2000 is up 0.96%
  • US Retail Sales grew 0.2% in January, better than the 0.0% expected and 1.2% drop in December
  • US Retail Sales ex-Autos grew 0.9% in January, better than the 0.3% expected and 1.8% drop in December
  • US Business Inventories grew 0.6% in December, matching consensus
  • President Trump presented his fiscal 2020 budget totaling USD$4.7 trillion, including a 9% cut to discretionary spending
  • The S&P 500 finished Friday’s trading session below its 200-day moving average, a bearish technical signal for the benchmark US stocks index.  The drop below its long-term moving average may point to a near-term price correction for the S&P 500. 
  • Amazon.com (AMZN) and the S&P 500 multi-line retail index are now in-line for the year, +8% YTD, after Amazon.com dropped 3.1% last week on news that it plans to closed pop-up stores and continued chatter by liberal members of Congress about a potential breakup of the eCommerce behemoth. 
  • Saudi Arabia is poised to extend its deep cuts to oil production into April.  Allegedly, the “Oil Kingdom” is cutting its oil productions even more than agreed upon at the most recent OPEC meeting as The Kingdom attempts to regain control of global oil markets.  At the moment, Saudi Arabia is on a production pace below 10 million bbls/day, well below the agreed upon level of 10.31 million barrels/day. 
  • Tech (+2.06%), Energy (+1.73%), and Telecom (+1.64%) stocks are the top performers in the S&P 500 today
  • Real Estate (+0.71%), Industrials (+0.39%), and Utilities (+0.32%) 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 6.69x
  • 12 stocks in the S&P500 are at 4-week highs while 157 stocks are at 4-week lows
  • 27 stocks in the S&P 500 are overbought while 18 stocks are oversold according to the 16-day RSI Measure
  • 116 stocks in the Nasdaq Composite are at 4-week highs while 102 stocks are at 4-week lows
  • 143 stocks in the Nasdaq Composite are overbought while 637 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently little changed at 16.28 from last week's close of 16.05

Stocks Trending in the News

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Global Consumer Stocks Trending in the News

  • Pandora (CPSE: PNDORA) was cut at Carnegie to sell from hold.  Carnegie also cuts its price target to DK325 from DK360.  Carnegie added, however, that Pandora could trade well below that price target if the coming results confirm a further slowdown in China.  Pandora is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Tesla (TSLA) is in talks about potentially ordering batteries from Contemporary Amperex Technologies (SZSE:300750) according to press reports.  Tesla reported in its last annual report that it only had one battery supplier and was looking for more.  The batteries would power the Model 3s that Tesla plans to start building at its new factory in China.  Telsa is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  Contemporary Amperex Technologies is not rated in our Global Top Stock Ideas.

Global Information Technology & Communication Services Stocks Trending in the News

  • Alibaba (BABA) continues its push into delivery and logistics.  Alibaba is acquiring a 49% stake in China’s largest delivery company STO Express.  Alibaba will not control the company but as a strategic investor will participate in decision making.  STO Express is one of the 5 largest private logistics companies in China.  Alibaba has invested in 4 of those 5, STO included.  Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Alphabet (GOOG.L)Facebook (FB). Amazon (AMZN) and other large tech companies should be broken up by the government because they have become too powerful, according to a report released by Senator Elizabeth Warren today.  She proposed designating these companies “platform utilities” and the creation of regulators to assure small business are not harmed by these companies.  Alphabet is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Apple (AAPL) was upgraded today at Bank of America to buy from neutral.  Apple also saw its price target raised to USD$210 from USD$180.  Apple’s average price target in the market today in USD$176.62.  Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Disney (DIS) has the first blockbuster movie of 2019 with the release of “Captain Marvel”.  Disney saw the film earn USD$145 million in the US and USD$453 million in global ticket sales.  2019 has been weak for films so far so this is a welcome arrival for Disney.  Disney is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Facebook (FB) shares traded at their highest levels since August 2018 after Nomura Instinet upgraded the stock from neutral to buy. Nomura Instinet also hiked its price target for Facebook from USD$172/share to USD$215/share, citing that users are adopting Facebook.com’s story feature faster than anticipated. Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • FireEye (FEYE) shares traded notably higher after JPMorgan upgraded the stock to overweight from neutral, citing that it expects FireEye billings to, “accelerate through the course of 2019.” FireEye matins 12 buy, 14 hold, and 1 sell recommendation across analyst forecasts with a consensus price target of USD$20/share. FireEye is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Nvidia (NVDA) agreed to acquire Mellanox Technologies (MLNX), in a USD$5.8 billion deal.  Mellanox is focused on the technology that speeds data throughout a data center.  Bloomberg earlier reported on the talk and the deal was cofirmed by both parties.  Mellanox is based in Israel.  Nvidia is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.  Mellanox is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Oracle (ORCL) was downgraded 2 notches as Nomura to reduce from buy.  Nomura also cut Oracle’s price target to USD$42 from USD$53.  Nomura notes that Oracle is spending on share buybacks at the expense of investing in R&D.  Nomura expects Oracle will return to its average of USD$3 billion per quarter from its present USD$10 billion per quarter, calling its present rate “unsustainable”.  Oracle is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Deutsche Bank (DB:DBK)  CEO Christian Sewing is reportedly dropping his resistance to a merger with Commerzbank (DB:CBK)  this year.  Informal talks between the companies have intensified in recent days, though a formal mandate has yet to be declared.  The German Finance Ministry favors a merger between the 2 as opposed to a merger with a foreign player. Deutsche Bank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  Commerzbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Boeing (BA) is under pressure after China grounded all 96 737-800s in the country in the wake of the Ethiopian Airlines crash of a 737-800 over the weekend.  China broke with normal protocol of the past in which the country that certified the jet-the US-is the first to make the call to ground.  A few other countries have followed China’s lead while most are not, yet.  This crash comes 5 months after the Lion Air crash of a 737-800 in which is feared to have been caused by sensors the plane pushing its nose down.  Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • General Electric (GE) was in talks to offload its insurance business before the talks were derailed, according to a report by Melius Research today.  GE recently reported it needed to put USD$15 billion into loss reserves for the unit as it continues to look for a buyer for it.  General Electric is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.

Global Commodities & Power Stocks Trending in the News

  • Newmont Mining Corp. (NEM) successfully defended a hostile bid by Barrick Gold Corp. (TSX: ABX), although for just two years, after agreeing to a joint venture between the two companies’ operations in Nevada. Barrick Gold Corp. CEO Mark Bristow said in an interview Monday, “We won’t be going to buy each other’s shares and enter into any hostilities for the next two years.” Newmont Mining Corp. is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas. Barrick Gold Corp. is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Harvest Health & Recreation Inc. (CNSX) will acquire Verano Holdings LLC in the largest M&A deal the US marijuana industry has seen to date. Once combined, the company will have licenses to operate up to 200 facilities across 16 US states and territories, which include 123 retail dispensaries. The acquisition, “will give us a leadership position in one of the largest cannabis markets in the world,” Harvest Health & Recreation Chairman Jason Vedadi said in a public statement. Harvest Health & Recreation is not rated in our Global Top Stock Ideas.

 

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US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 1.01 basis points to 2.47%
  • US 5-Year Treasury Bonds are lower with yields up 0.84 basis points to 2.43%
  • US 10-Year Treasury Bonds are lower with yields up 1.26 basis points to 2.64%
  • The US Treasury 2s-5s Spread has narrowed 0.17 basis points to -0.03%
  • The US Treasury 2s-10s Spread has widened 0.25 basis points to 0.17%
  • US Treasury 5s-10s Spread has widened 0.42 basis points to 0.2%

Currencies

  • EUR€ is currently little changed against the USD$ at 1.1227
  • GBP£ is currently up 0.63% against the USD$ to 1.3097
  • CHF is currently down 0.302% against the USD$ to 0.989
  • JPY¥ is currently little changed against the USD$ at 111.26

Commodities

  • WTI Crude is currently up 1.36% to USD$56.83/bbl with the Brent-WTI spread little changed USD$0.16 to USD$9.32/bbl
  • Gold is currently down -0.43% to USD$1292.69/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
NVIDIA Corp Information Technology 150 4.75%            1,634,060
Align Technology Inc Health Care 195 4.18%                321,511
Western Digital Corp Information Technology 37.7 4.06%                740,367
Devon Energy Corp Energy 26.4 3.71%                804,795
Valero Energy Corp Energy 78.8 3.70%                215,975
 
Underperformers Sector Price 1D % Chg Volume
Boeing Co/The Industrials 352 -7.58%            2,938,234
Hanesbrands Inc Consumer Discretionary 13.8 -2.90%                469,240
Eli Lilly & Co Health Care 117 -2.26%                975,110
Newmont Mining Corp Materials 31 -2.20%            3,143,404
Discovery Inc Communication Services 27.1 -1.69%                368,604
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