blog

Latest from the Quantamize Blog

US stocks rally from session lows after Fed says no hike in 2019, but gains fade, stocks close mixed

Mar 20, 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 close mixed, rallying after the Fed announcement with gains fading after investors digested the full comments 
  • The Fed won't raise rates due to the slowing economy, with Fed President Jerome Powell saying "patient means no need to rush to judgment" on rates
  • The Fed will end the draw down of its bond holdings by September of this year
  • President Trump said tariffs will stay on Chinese goods until the two come to a trade agreement
  • The S&P 500 finished down 0.29%, Nasdaq Composite up 0.07%, and Russell 2000 is down 0.76%
  • WTI crude trades over $60 today after US stockpiles saw a 9.59 million barrel draw sown, much more than expected; exports surged as well
  • Bullishness of stocks newsletter writers rises to a 5-month high.  The Investors Intelligence reading has risen 10 out of the last 11 weeks, currently sitting at 53.9%.  It is now at the highest level since the second week of October.   
  • While stocks investors are hoping the US Fed continues to pursue a soft tightening strategy for raising interest rates, gross margin trends for S&P 500 companies may cause the US Fed to rethink their strategy.  Gross margin, on a trailing 12-month basis, continues to tick up and suggests many companies continue to have pricing power.  The big takeaway is that inflation may be “stickier” than what the US Fed would like if it were to pursue a dovish monetary strategy. 
  • US shipping industry data is pointing to a deceleration in global growth.  The Cass Freight Shipments Index, a measure of freight payment processing, dropped 2.1% in February, the biggest single month drop since July 2016. 
  • According to a recent presentation, the Norwegian sovereign wealth fund, Norges Bank Investment Management, is underweight US stocks by USD$100 billion.  The fund has decided to go overweight European stocks given Norway’s trade exposure with the region. 
  • Telecom (+1.16%), Energy (+0.89%), and Real Estate (+0.42%) stocks were the top performers in the S&P 500 today
  • Industrials (-0.63%), Healthcare (-0.67%), and Financials (-2.09%) 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 0.44x
  • 128 stocks in the S&P 500 hit 4-week highs while 22 stocks reached 4-week lows
  • 62 stocks in the S&P 500 closed overbought while 1 stock closed oversold according to the 16-day RSI Measure
  • 178 stocks in the Nasdaq Composite hit 4-week highs while 75 stocks reached 4-week lows
  • 298 stocks in the Nasdaq Composite closed overbought while 276 stocks closed oversold according to the 16-day RSI Measure
  • The VIX finished flat at 13.1 after closing at 13.56 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.

Global Consumer Stocks Trending in the News

  • Altria (MO) shares suffered in the wake of San Francisco announcing a proposal to ban e-cigarette companies from occupying city-owned property.  There is also a proposal to ban the shipment of e-cigarettes to San Francisco stores.   For the time, these are just proposals.  Altria is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • BMW (DB:BMW) issued another profit warning, saying earnings will fall “well below” last year.  BMW has launched a 12 billion euros efficiency drive to battle the effects of trade conflicts and greater electric vehicle use.  BMW will cut down its model offerings, cut development time on new models and hold its employee count steady.  BMW expects pre-tax profit to fall more than 10% this year.  BMW is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • General Mills (GIS) reported fiscal third quarter adjusted EPS of 83 cents, beating consensus of 69 cents.  General Mills reported fiscal third quarter revenue of USD$4.20 billion in line with USD$4.19 billion consensus.  General Mills reported organic volume growth of 5% and sees full year EPS growing 0-1%, up from a drop in sales of up to 3% originally expected.  General Mills is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas.
  • Kingfisher Plc (LSE: KGF) shares fell after analysts were disappointed with the home-improvement retailer's financial results, which included the worst annual profits since the 2008 financial recession. Kingfisher also announced the resignation of CEO Veronique Laury, although it was not enough to signal a turnaround of the company for analysts. Kingfisher is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Monster Beverage (MNST) was downgraded at Goldman Sachs to neutral from buy.  Monster Beverage also said its price target cut to USD$59 from USD$67.  Goldman sees a 2019 “softer than expected” for Monster Beverage which it expects to pressure earnings, saying he has been “a meaningful deceleration” in sales trends internationally.  Monster Beverage is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Walt Disney (DIS) has completed its acquisition of the major asset of 21st Century Fox (FOXA) in a USD$71.3 billion transaction.  In the wake of the deal, Disney will control Fox’s movie and television production studios, the FX cable channel, Fox Searchlight and National Geographic properties.   The combination of these assets is designed to provide the heft needed to effectively compete in the new media landscape.  Walt 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.  21st Century Fox is not rated in our Global Top Stock Ideas.

Global Information Technology & Communication Services Stocks Trending in the News

  • Alphabet’s (GOOG.L) Google launched a new video game streaming service called Stadia.  Stadia is a platform upon which developers can develop streaming games that can be accessed over the web, bypassing gaming consoles.  Google also introduced its own gaming controller.  Alphabet is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Facebook (FB) announced it will no longer include age, gender and zip code targeting with ads on its site, as part of a settlement to settle five discrimination lawsuits filed by advocacy groups.  Facebook will also pay just under USD$5 million.  Facebook COO Cheryl Sandberg said, “There is a long history of discrimination in the areas of housing, employment and credit, and this harmful behavior should not happen through Facebook ads.”  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Inmarsat Plc (LSE: ISAT) shares traded higher by double-digits after it received a takeover offer worth roughly USD$3.3bn from a consortium of private equity and pension funds. The group led by Apa Partners and Warburg Pincus and supported by the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan offered a non-binding cash bid equal to about USD$7.21/share. Inmarsat received a slightly lower takeover offer worth about USD$7.07/share in July 2018. Inmarsat is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Nvidia (NVDA) said it is on track to clear out the inventory it built up anticipating cryptocurrency mining demand that did not materialize.  Nvidia maintained guidance for flat revenue in fiscal 2020 as it completes its inventory draw down, delivering guidance better than the 4% drop in revenue expected by analysts.  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.
  • Sony Corp. (TSE: 6758) and Nintendo Co. (TSE: 7974) shares slipped after Alphabet’s (GOOG.L) Google announced its new game streaming venture, Stadia. Stadia will allow game developers to design games capable of being streamed over an Internet connection, which effectively cuts out traditional gaming consoles. “There is no doubt this service makes life even more difficult for established platforms,” said market strategist Amir Anvarzadeh on the news. Sony Corp. is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas. Nintendo is not rated in our Global Top Stock Ideas. Alphabet is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Tencent Music Entertainment Group (TME) shares slid after investors were disappointed with the company’s debut financials release. Although Tencent Music Entertainment Group reported 50% revenue growth and an EPS beat in CY4Q2018, analysts harped on the firm’s measly user metrics. Specifically, Social Entertainment, the largest operating segment for Tencent Music Entertainment Group, observed only mild monthly active user growth. Tencent Music Entertainment Group is rated “Unattractive” in our China All-Cap Global Top Stock Ideas.
  • Viacom Inc. (VIAB) and AT&T Inc. (T) shares slid as the former’s looming blackout on DirecTV, who is now owned by AT&T, nears. BTIG analyst Richard Greenfield discussed that he does not see the logic in AT&T risking further detonation by holding out. Greenfield also discussed when DirecTV dropped Viacom networks in 2012, which did not end well for DirecTV and resulted in lost market share. Viacom is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. AT&T is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • UBS’ (SWX:UBSG) CEO said the first quarter of 2019 has been dismal, one of the toughest environments he has ever seen.  With little M&A activity or IPOs outside of the US, investment banking revenue is down over a third in the first quarter.  His comments indicate the situation is getting even worse than what he described in recent comments.  Global wealth management revenue is down 9% so far this year.  UBS is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Industrial Stocks Trending in the News

  • Fedex (FDX) issued its second profit warning in the last three months.  Fedex is seeing slowing economic activity globally and is dealing with the digestion of its most recent acquisition in Europe.  Fedex has expected a softer start to the year but sees things developing even worse than initially expected.  Fedex is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • Osram Licht AG (XTRA: OSR) shares slumped after CEO Olaf Berlien told investors that the company will have difficulty reaching its annual targets. Berlien explained that weaker demand from car makers and smartphone providers for components is driving the weaker-than-expected performance this year. Osram Licht is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Rockwell Automation (ROK) was downgraded to neutral from buy at UBS.  Rockwell Automation also had its price target cut to USD$182 from USD$190.  UBS sees a decelerating growth environment for Rockwell Automation and at this point sees a balanced risk/reward scenario, a primary reason for the downgrade.  Rockwell Automation is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.

Global Commodities & Power Stocks Trending in the News

  • Vale (VALE) received a favorable court decision in its quest to restart some of its shuttered mining operations in Brazil.  A judge has ruled Vale can restart its Brucutu mine, which would restore 30 million of the 80 million tons of production it was ordered to shutter in the wake of its dam disaster.  Vale still needs the OK from the environmental authorities in the state of Minas Gerais and Vale said inform investors when it has that.  Vale is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Bayer (DB:BAYN) lost the first phase of its most recent court case alleging its RoundUp weed killer causes cancer.  Analysts are describing the loss as a major blow, as the company was confident it would win the case.  Analysts commented there should remain a significant overhang on the stock given the loss in the case and the chance for further losses.  Bayer is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Nevro (NVRO) shares soared after Wall Street praised the companies, “new beginning,” as it hired Keith Grossman as CEO. At least four Wall Street firms upgraded their rating for the stock, sending Nevro shares higher by as much as 36% in intraday trading. Analysts across Wall Street highlighted Grossman’s proven ability to lead turnarounds in their upgrades. Nevro is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.

Global Real Estate Stocks Trending in the News

  • Henderson Land Development Company Limited (SEHK: 12) Chairman Lee Shau Kee may be considering stepping down from his position, according to reports. Lee who is 91 years of age, is the second-richest man in the city of Hong Kong. Henderson Land has reportedly proposed that Lee’s sons, Lee Ka Kit and Lee Ka Shing, take his place as joint chairmen and managing directors. Henderson Land is rated “Attractive” in our China All-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 -7.04 basis points to 2.39%
  • US 5-Year Treasury Bonds are higher with yields down -9.93 basis points to 2.32%
  • US 10-Year Treasury Bonds are higher with yields down -8.78 basis points to 2.52%
  • The US Treasury 2s-5s Spread has narrowed 2.89 basis points to -0.07%
  • The US Treasury 2s-10s Spread has narrowed 1.74 basis points to 0.13%
  • US Treasury 5s-10s Spread has widened 1.15 basis points to 0.2%

Currencies

  • EUR€ is up 0.581% against the USD$ in after hours to 1.1418
  • GBP£ is down 0.475% against the USD$ in after hours to 1.3205
  • CHF is up 0.719% against the USD$ in after hours to 1.008
  • JPY¥ is down 0.61% against the USD$ in after hours to 110.71

Commodities

  • WTI Crude is up 1.36% to USD$59.83/bbl with the Brent-WTI spread little changed USD$-0.13 to USD$8.32/bbl
  • Gold is up 0.52% to USD$1313.34/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
Netflix Inc Communication Services 354 4.58%            2,545,149
Pioneer Natural Resources Co Energy 143 4.51%                588,183
Twitter Inc Communication Services 33 4.16%            3,957,070
Noble Energy Inc Energy 22.7 3.63%            1,723,121
Hess Corp Energy 51.8 3.38%                829,058
 
Underformers Sector Price 1D % Chg Volume
Viacom Inc Communication Services 30 -5.49%            1,237,525
KeyCorp Financials 16.3 -5.33%            3,782,501
Brighthouse Financial Inc Financials 34.2 -5.23%                608,287
Nektar Therapeutics Health Care 44.5 -5.23%                719,917
Twenty-First Century Fox Inc Communication Services 48.3 -4.93%            1,757,820
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY