blog

Latest from the Quantamize Blog

Tame inflation data powers risk-on sentiment for US stocks; UK Parliament rejects Brexit again in late vote

Mar 12, 2019

 

Better Research, Better Investments.Better Research, Better Investments.
Better Research, Better Investments.Better Research, Better Investments.

US Markets End of Day Snapshot

  • US stocks rally with tame inflation data powering risk-on sentiment today
  • UK Parliament rejected UK Prime Minister Theresa May’s new BREXIT plan 
  • The S&P 500 finished up 0.3%, Nasdaq Composite up 0.44%, and Russell 2000 up 0.06%
  • February CPI rose 0.2% m/m, matching consensus and up from 0% in December
  • February CPI rose 1.5% y/y, below consensus of 1.6% and 1.6% in December
  • Real Average Hourly Earnings rose 1.6% y/y, below 1.9% consensus
  • Today we are highlighting Best Chinese Stocks with US ADRs to Buy in March, click to read
  • We also focused on Saudi Oil cuts with this post: From Gusher to Trickle: A Timeline of Saudi Oil Production Cutsclick to read
  • Strategists at JP Morgan reiterate their bullish bias to Brazilian stocks on expectations that tighter fiscal policy and looser monetary policy will drive a “virtuous cycle” that will boost valuations.  The bank sees the Brazilian stocks benchmark Ibovespa closing CY2019 at 105,900, up from a closed of 98,026 as of yesterday’s close. 
  • Citigroup argues that investors should expect more volatility this year.  YTD, the VIX is averaging 17.21 vs. 16.80 for the same period last year.  Likewise, the spread between US high-yield corporate bonds and US 10-year treasuries is 4.27 percentage points, up from 3.18 percentage points for the same period last year. 
  • Healthcare (+0.67%), Utilities (+0.62%), and Energy (+0.58%) stocks were the top performers in the S&P 500 today
  • Financials (+0.18%), Consumer Staples (-0.02%), and Industrials (-0.91%) 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 2.16x
  • 59 stocks in the S&P 500 hit 4-week highs while 17 stocks reached 4-week lows
  • 51 stocks in the S&P 500 closed overbought while 13 stocks closed oversold according to the 16-day RSI Measure
  • 150 stocks in the Nasdaq Composite hit 4-week highs while 74 stocks reached 4-week lows
  • 234 stocks in the Nasdaq Composite closed overbought while 227 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed up 1.95 points today to 16.28 after closing at 14.33 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.

Global Consumer Stocks Trending in the News

  • Coca-Cola (KO) was downgraded today at HSBC to hold from buy.  HSBC also cut Coca-Cola’s price target to USD$50 from USD$64.  HSBC comments that Coca-Cola has “both new and unresolved problems."  HSBC sees real challenges in its plans to become a total beverage model company.  Coca-Cola is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas
  • Dick’s Sporting Goods (DKS) fourth quarter revenue was USD$2.49 billion matching consensus of USD$2.48 billion.  Fourth quarter ESP of USD$1.07 beat USD$1.06 consensus.  Fourth quarter same stores sales fell 2.2%, coming better than the 3.3% drop expected.  Dick’s gave 2019 ESP guidance of USD$3.15-3.35.  Dick’s Sporting Goods is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Lumber Liquidators (LL) announced it has resolved the outstanding securities fraud investigation by the SEC and US Department of Justice.  Lumber Liquidators agreed to pay a USD$33 million for filing a misleading statement to investors regarding its laminate flooring from dryer.  Lumber Liquidators is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Stitch Fix Inc. (SFIX) shares surged after the company reported better-than-expected earnings for its current quarter and sales forecast for its upcoming quarter. Stitch Fix has been a favorite of short sellers of late with short interest in the stock rising to 33% of floating shares compared to 31% a week ago. Stitch Fix shares rose as much as 18% on the earnings report. Stitch Fix is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Tesla (TSLA) has backtracked on its plans to close stores and sell only online.  Investors were left confused with the move that came shortly after announcing the closures of its stores and cuts to prices of 6%.  Prices will rise 3% with the announcement.  Tesla CEO Elon Musk is pushing back against the SEC and its claims saying the government is trying to muzzle him.  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.

Global Information Technology & Communication Services Stocks Trending in the News

  • Apple (AAPL) announced a March 25th event at which it is expected to unveil an original video programming platform as well as a new premium magazine subscription service.   In announcing the event, Apple used the tagline “It’s show time.”  Apple is building its services business as iPhone sales lag, the video service is expected to be similar to other video service platforms like Netflix (NFLX).  Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  Netflix is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Care.com (CRCM) announced a set of new policies to oversee its members and providers on its site on the wake of the WSJ article criticizing its practices.  Care.com had its buy rating reaffirmed at BTIG after a WSJ article critical of the company sent the shares lower.  The WSJ said Care.com’s lack of background checks and users misunderstandings about the lack of them has led to “tragic outcomes.”  BTIG reaffirmed both its buy rating and USD$26 price target.  BTIG said it understands reputational risk exists but does not see risks of criminal liability.  Care.com is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Top Short” in our US Information Technology Global Top Stock Ideas.
  • Coupa Software Inc. (COUP) shares edged lower despite reporting CY4Q2018 results that spurred a series of price target hikes from analysts. Ahead of its earnings release, Coupa Software has rallied 49% year-to-date as of Monday’s close. Coupa Software is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Short” in our US Information Technology Global Top Stock Ideas.
  • Hewlett Packard Enterprises (HPE) shares fell after being downgraded from neutral to sell at UBS. Hewlett Packard Enterprises also saw its price target slashed from USD$17/share to a Street-low USD$13/share at UBS, who cited that growth in the company’s cloud business, “will likely grow into a bigger headwind as it moves up from a 20% share.” Hewlett Packard is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Momo (MOMO) saw monthly active users in the fourth quarter of 113.3 million users.  Total paid users reached 13 million, up from 7.8 million a year ago.  Momo saw net revenue of 3.84 billion yuan (USD$559 million) in the fourth quarter.  Momo changed its reporting currency to yuan from US dollars to minimize volatility.  Momo gave first quarter revenue guidance of 3.55-3.65 billion yuan.  Momo is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Uniper SE (XTRA: UN01) shares traded higher after it announced that it is prepared to resume takeover talks with Fortum Oyj (XTRA: UN01) with, “no predetermined outcome.” The language used by Uniper signals a new approach to resolving the feud between the two utilities. Uniper is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas. Fortum Oyj is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.  

Global Financials Stocks Trending in the News

  • Deutsche Bank AG (DB: DBK) shares slipped following reports of internal resistance to a potential merger with German rival Commerzbank AG (DB: CBK). Reports of resistance pertain to Jan Duscheck, a key labor representative of Deutsche Bank’s supervisory board, who believes that the merger would threaten thousands of jobs in Germany’s financial sector. Duetsche 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.  
  • Ping An Insurance (SEHK:2318) reported a 21% hike in profit in 2018.  Ping An’s net income rose to 107.4 billion yuan (USD$16 billion) up from 89.1 billion yuan a year earlier.  Consensus was for 97.5 billion yuan profit in 2018.   Pin An said one of its key goals is to become a world-leading, technology-powered retail financial services group.  Ping An Insurance is rated “Attractive” in our China All-Cap Global Top Stock Ideas.
  • Wells Fargo (WFC) CEO Tim Sloan spent 4 hours in front of Congress today testifying in front of the House Financial Services Committee.   Lawmakers grilled hi on the state of Wells Fargo with many expressing concern that the bank has not rectified all its problems.  Some even suggested Wells Fargo should be broken up, describing the bank as “too big to manage.”  Wells Fargo is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Airbus SE (ENXTPA: AIR) shared edged higher after Lion Air announced that it would drop a USD$22bn order for Boeing Co. (TCK) 737 Max jetliners in favor of aircrafts from Airbus. Lion Air was already considering canceling the order after its own Boeing 737 Max jetliner crashed on October 29th, 2018, killing 189 people on board. Airbus is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.  
  • Boeing’s (BA) problems with the 737-800 Max are growing.  Following China and India yesterday, today countries have grounded the planes in Singapore, Australia and Latin America.  The FAA in the US has declared the jet airworthy and no US airlines have stopped flying the planes.  The investigation into the latest crash has just begun so the groundings are being done out of an abundance of caution.  Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • JetBlue (JBLU) saw its rating cut at Barclays to equal weight from overweight.  Barclays also cut its price target for JetBlue to USD$20 from USD$27.  Barclays writes “there is a lot to like but not much traction” on a number of its initiatives.  JetBlue is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Allergan’s (AGN) price target was cut to USD$190 from USD$219 at Guggenheim today.   Despite the target cut Guggenheim maintained its buy rating on Allergan.  Guggenheim generally likes Allergan’s open science platform but believes it will be some time before investors may see consistent delivery of pipeline successes.  Allergan is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Akorn (AKRX) rose sharply on speculation Baxter (BAX) would make a bid for the company amid the M&A activity in the sector recently.  Baxter, however, put out a statement saying it is not in talks with Akorn.  It added that it has no plans to make an offer for Akorn as had been reported.  Akorn is rated “Top Short” in our US SMID-Cap Global Top Stock Ideas.  Baxter is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Harvest Health & Recreation Inc. (CNSX: HARV) 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.
  • UnitedHealth Group (UNH) announced it will require new employer clients to pass any rebates received from drugmakers back to the clients who use those medications.  The change will take effect starting January 1, 2020 and will involve all clients using OptumRx, its pharmacy benefits manager.  UnitedHealth Group is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.

 

Actionable and Transparent Quantitative ResearchActionable and Transparent Quantitative Research
Actionable and Transparent Quantitative ResearchActionable and Transparent Quantitative Research

US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -2.46 basis points to 2.45%
  • US 5-Year Treasury Bonds are higher with yields down -3.36 basis points to 2.40%
  • US 10-Year Treasury Bonds are higher with yields down -3.78 basis points to 2.60%
  • The US Treasury 2s-5s Spread has narrowed 0.9 basis points to -0.04%
  • The US Treasury 2s-10s Spread has narrowed 1.32 basis points to 0.15%
  • US Treasury 5s-10s Spread has narrowed 0.42 basis points to 0.19%

Currencies

  • EUR€ is little changed 0.009% against the USD$ in after hours to 1.1287
  • GBP£ is little changed 0.015% against the USD$ in after hours to 1.3077
  • CHF is little changed 0.01% against the USD$ in after hours to 0.9923
  • JPY¥ is little changed 0.009% against the USD$ in after hours to 111.35

Commodities

  • WTI Crude is little changed 0.14% to USD$56.87/bbl with the Brent-WTI spread little changed USD$0.15 to USD$9.4/bbl
  • Gold is little changed 0% to USD$1301.55/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

 

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
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

On Mobile/Tablet scroll to the right.

Outperformers Sector Price 1D % Chg Volume
Devon Energy Corp Energy 26.4 3.45%            1,752,373
Whirlpool Corp Consumer Discretionary 124 3.23%                239,204
Newmont Mining Corp Materials 31 3.20%            5,550,112
Align Technology Inc Health Care 195 3.07%                595,053
Diamondback Energy Inc Energy 105 2.99%                683,310
 
Underformers Sector Price 1D % Chg Volume
F5 Networks Inc Information Technology 163 -7.67%                339,811
Boeing Co/The Industrials 352 -6.15%            2,659,571
American Airlines Group Inc Industrials 32.1 -3.53%            2,975,417
United Continental Holdings Inc Industrials 81 -3.07%            2,150,841
H&R Block Inc Consumer Discretionary 25.4 -2.98%            1,427,669
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY