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This rally still has legs! US stocks turn positive late-day and close higher on trade and growth optimism

Apr 03, 2019

 

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

US Markets End of Day Snapshot

  • US stocks post a late-day rally to close with gains after being in the red mid-session; optimism on chances for a US-China trade deal and growth fuel risk-appetite today
  • When US stocks last traded at record levels 15 months ago-and subsequently collapsed-40% of the S&P500 stocks were hitting all-time highs and 40% were overbought.  Today only 10% are at an all-time high and 10% are overbought, a much less volatile scenario, according to Bloomberg
  • The S&P 500 finished up 0.21%, Nasdaq Composite up 0.6%, and Russell 2000 up 0.49%
  • China's trade delegation arrived in Washington, DC, led by Vice Premier Liu He, to continue trade negotiations; China cited "new progress" after last week's talks and is looking to build on that momentum
  • China said it will extend its suspension of retaliatory tariffs on autos and include fentanyl on its list of controlled substances, in an effort to generate a positive atmosphere for these talks
  • The US is seeking full compliance from China by 2025 in any final trade deal, according to Bloomberg
  • Read more on US-China trade talks in our blog post: Let's make a deal! China looking to close a trade deal with US as negotiators arrive in Washington
  • Markit US Services PMI in March was 55.3, above the 54.8 expected and encouraging investors today
  • The ADP Employment Change for March showed only 129k jobs added, well below 175k consensus and 183k the prior month
  • After a strong start to 2019, only 36% of active managers of large-cap portfolios in the US are beating their respective averages
  • Check out the Tech Top Picks: Forget the FANGs, THESE Titans of Techs are what your portfolio NEEDS NOW!
  • Check out these US Top PicksGO BIG! SIZE MATTERS! Top US Large-Cap Stocks for your portfolio NOW!
  • Read our blog on interest rates: Like a boxer after that knock-out punch, interest rates have tumbled over the last 2 quarters
  • This is really interesting – ETFs focused on the “value factor” saw recording outflows in 1Q, with $4 billion flowing out after seeing more than $10 billion flow in during 4Q.    
  • Utilities stocks, when dividends are included, have been outperforming the Nasdaq Composite since the inception of the Nasdaq benchmark index in 1971!  WOW!  Richard Bernstein Advisors argue this is because, in aggregate, utility stocks are viewed as defensive and not directly linked to GDP growth.   
  • Consumer Discretionary (+0.71%), Financials (+0.32%), and Utilities (-0.15%) stocks were the top performers in the S&P 500 today
  • Healthcare (-0.12%), Industrials (-0.27%), and Consumer Staples (-0.63%) 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 1.63x
  • 139 stocks in the S&P 500 hit 4-week highs while 8 stocks reached 4-week lows
  • 59 stocks in the S&P 500 closed overbought while 2 stocks closed oversold according to the 16-day RSI Measure
  • 110 stocks in the Nasdaq Composite hit 4-week highs while 73 stocks reached 4-week lows
  • 291 stocks in the Nasdaq Composite closed overbought while 192 stocks closed oversold according to the 16-day RSI Measure
  • The VIX finished higher at 13.74 after closing at 13.36 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.

Global Consumer Stocks Trending in the News

  • Dunkin’ Brands (DNKN) was downgraded today to market perform from outperform at BMO Capital Markets.  Dunkin’ Brands saw its price target cut to $75 from $80.  Dunkin’ Brands has an average price target of $71.19 in the market today.  BMO believes the fundamentals of Dunkin’ Brands’ story remains intact but at this point the valuation is “less persuasive.”  Dunkin' Brands is rated "Attractive" in our US Large-Cap Global Top Stock Ideas and "Attractive" in our  US Consumer Discretionary Global Top Stock Ideas.
  • GameStop Corp. (GME) shares slid to their lowest level since 2004 after the retailer projected sales to fall between 5% and 10% in FY2019. GameStop also announced a plan to cut costs by USD$100mm this year to combat headwinds faced by the company. GameStop is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Henkel AG & Co. KGaA (XETRA: HEN3) shares slid after M.M. Warburg Investment Research downgraded the stock from buy to hold. Over the last 3 months, analysts have lowered the consensus 1-year price target for Henkel AG by 13%. Henkel AG currently maintains 8 buy recommendations, 21 hold recommendations, and 4 sell recommendations across analyst ratings. Henkel AG is rated “Top Short" in our European Large-Cap Global Top Stock Ideas
  • Lamb Weston (LW) shares edged higher after the company announced FY3Q2019 adjusted EPS of USD$0.95 that beat the highest analyst estimates ranging between USD$0.80 and USD$0.87. Lamb Weston’s net sales of USD$926.8mm in FY3Q2019 also surpassed analyst consensus of USD$895.2mm. Lamb Weston is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Pandora A/S  (CSPE: PNDORA) shares sank after Carnegie published a note that questions the company’s sales growth in China. In its note, Carnegie warned clients that Pandora may have faced challenges in its CY1Q2019 sales in China, citing March sales figures from Alibaba’s website Tmall. Pandora is rated “Neutral" in our European Large-Cap Global Top Stock Ideas.
  • Proctor & Gamble (PG)  in under pressure in India and other countries to help deal with the vast amount of waste generated by its disposable products.  India is a particularly attractive market for Proctor & Gamble with massive growth in demand expected for its products and the government is seeking help to deal with the waste generated by disposable diapers and sanitary pads.  Activists in India have called on P&G to help deal with this waste and the health risks it entails.  Proctor & Gamble is rated "Top Buy" in our US Large-Cap Global Top Stock Ideas and "Top Buy" in our US Consumer Staples Global Top Stock Ideas
  • Saint Gobain (ENXTPA: SGO) shares traded higher following reports of a possible of the company’s Pont-A-Mousson unit to China’s XinSing. A report by Les Echos cites unions and a memo that was sent to the finance ministry of France as evidence. Saint Gobain is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. 
  • Superdry Plc (LSE: SDRY) shares fell after co-founder Julian Dunkerton won a battle to rejoin the board of directors of the UK apparel retailer. Since Dunkerton’s initial departure about a year ago, Superdry shares have tanked 65% amid repeated profit warnings from the company. Prior to his re-appointment, Dunkerton had been a vocal advocate of current management, having launched a, “Save Superdry,” website. Superdry is rated “Neutral" in our United Kingdom All-Cap Global Top Stock Ideas.
  • Tesla (TSLA) has sold almost as many cars as Porsche (DB:PAH3) in its second month of sales in Germany.  Tesla sold 2,367 cars in March in Germany while Porsche sold 2,744.  Porsche saw a 9% sales drop due to new emissions standards while Tesla saw a five-fold jump from its first month to second.  Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  Porsche is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Former Wynn Resorts Ltd. (WYNN) executives hid allegations that founder Steven Wynn sexually harassed women from the Massachusetts Gaming Commission, according to a report from the regulator. The Massachusetts Gaming Commission is now considering revoking Wynn’s license to operate in the state as the company plans to open a USD$2.6bn resort in the Boston Harbor. Wynn Resorts is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  

Global Information Technology and Communication Services Stocks Trending in the News

  • Advanced Micro Drives (AMD) and other chip stocks are trading near record highs after Nomura Instinet projected annual sales growth for the industry of as much as 9% from 2020 to 2025. Nomura cited factors such as artificial intelligence, autonomous driving, 5G communications, and Internet of Things as drivers for growth in the sector. Advanced Micro Drives is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Alibaba (BABA) is still a buy at Jefferies despite Altaba’s exit from its 11% stake in the company. Jefferies analyst Karen Chan said that the stake sale will only drive a near-term overhang on Alibaba’s stock performance. Alibaba currently maintains 51 buy recommendations, 1 hold recommendation, and 1 sell recommendation across analyst ratings. Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.  
  • CommVault Systems (CVLT) shares slipped the most in more than a year after Ron Miller, the company’s Senior Vice President of Worldwide Sales, resigned effective immediately. Miller had spent 19 years with the company, including 8 years in his former role as a Senior Vice President. CommVault Systems is rated "Attractive" in our US SMID-Cap Global Top Stock Ideas and "Attractive" in our US Information Technology Global Top Stock Ideas
  • Facebook (FB) data is still being found online.  Cybersecurity firm UpGuard found a large stash of Facebook user data stored on Amazon’s (AMZN) cloud service.  UpGuard found a digital platform that used the Facebook data has personal information of 540 million Facebook users in plain sight for anyone who knew how to look closely, according to a Bloomberg report.  Facebook has been able to remove the data in each case but the fact that they are there in the first place concerns security specialists.  Facebook is rated “Neutral” 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 “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Wirecard (XTRA:WRI) said it is unable to publish the full reports the law firm prepared regarding allegations in Singapore.  Wirecard said because of third-party rights it could not release the report as names and details in the report could subject the company to legal risks.  Wirecard is investigating the release of a redacted version to the public.  Wirecard is rated “Neutral" in our European Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Caterpillar (CAT) was downgraded to hold from buy at Deutsche Bank today.  Deutsche cut Caterpillar’s price target significantly, to $128 from $152.  Deutsche said it is “becoming increasingly clear” that Caterpillar’s backlog growth is about to turn negative, an ominous sign.  Caterpillar faces the prospect of collapsing global growth, Deutsche warns.  The Chinese land cycle is rolling over and there is a glut of equipment in the US.  Caterpillar is rated  is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas
  • Cosco Shipping Energy Transportation Co. (SEHK: 1138) shares soared after an announced agreement to strategically cooperate with Seaspan Corp. (TCK). According to early reports, both companies have committed to strengthen their exchange and collaboration on opportunities that relate to liquified natural gas investments, projects, transportations, and more. Cosco Shipping Energy Transportation is rated “Attractive” in our China All-Cap Global Top Stock Ideas.  
  • Delta Air Lines (DAL) shares appreciated after renewing its 23-year long partnership with American Express (AXP) for an additional 11 years, increasing the likelihood that Berkshire Hathaway (BRK.B) will purchase the airline. Stifel analyst Joseph DeNardi wrote in a note to clients, “While we had suspected that Delta could announce an extension with AmEx at some point this year, this is earlier than we had thought and the improvement in revenue and economics are significantly better than we were expecting.” Delta Air Lines is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas. American Express is rated “Attractive” in our US Large-Cap Global Top Stock Ideas. Berkshire Hathaway is not rated in our Global Top Stock Ideas.  

Global Financial Stocks Trending in the News

  • Ameriprise Financial Inc. (AMP) shares moved higher after the company announced the sale of its auto and home unit to American Family Insurance Mutual Holding Co. for USD$1.05bn in gross cash proceeds. Ameriprise CEO Jim Cracchiolo sees the deal as a way for the company to increase focus on its financial advice, wealth management, and asset management operations. Ameriprise is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.  
  • Blackstone Group (BX) has raised $22 billion for its flagship buyout fund and it is not done.  Analysts expect Blackstone could raise $25 billion for the fund amid a strong fundraising environment.  Blackstone has not yet set a limit on the pool but is seeking to raise a total of $100 billion this year.  $566 billion was raised by private equity funds in 2017 with $432 billion raised last year.  Blackstone Group is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • UBS Group AG (SWX: UBSG) is considering several options for its asset management unit, including a partial sale or merger of the unit, according to people familiar with the matter. According to reports, UBS is considering the acquisition of Deutsche Bank AG’s asset manager, DWS Group (TCK), to combine with its own asset management business and spin off the two as their own entity. UBS is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  

Global Commodities & Power Stocks Trending in the News

  • Tellurian Inc.’s (TELL) planned USD$28bn liquefied natural gas plant moved a step closer to being started after Total SA (ENXTPA: FP) announced intentions to commit more funding to the project. Total SA will invest USD$500mm in the project in exchange for receiving about 1mm tons of liquefied natural gas annually and to increase its stake in Tellurian. Tellurian is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas. Total SA 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 3.65 basis points to 2.33%
  • US 5-Year Treasury Bonds are lower with yields up 4.03 basis points to 2.32%
  • US 10-Year Treasury Bonds are lower with yields up 4.82 basis points to 2.52%
  • The US Treasury 2s-5s Spread has widened 0.38 basis points to -0.01%
  • The US Treasury 2s-10s Spread has widened 1.17 basis points to 0.18%
  • US Treasury 5s-10s Spread has widened 0.79 basis points to 0.2%

Currencies

  • EUR€ is up 0.277% against the USD$ in after hours to 1.1235
  • GBP£ is up 0.213% against the USD$ in after hours to 1.3156
  • CHF is little changed 0% against the USD$ in after hours to 1.0019
  • JPY¥ is up 0.171% against the USD$ in after hours to 111.51

Commodities

  • WTI Crude is little changed -0.19% to USD$62.46/bbl with the Brent-WTI spread little changed USD$-0.03 to USD$6.63/bbl
  • Gold is little changed -0.17% to USD$1290.21/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
Advanced Micro Devices Inc Information Technology 20.4 8.49%          19,940,229
Nielsen Holdings PLC Industrials 25.1 7.22%            2,103,377
Nektar Therapeutics Health Care 44.5 4.72%                583,543
PG&E Corp Utilities 6.95 4.59%            2,171,270
Lam Research Corp Information Technology 140 3.95%            1,111,966
 
Underformers Sector Price 1D % Chg Volume
Altria Group Inc Consumer Staples 47.9 -4.78%            4,306,853
Raytheon Co Industrials 160 -4.54%                782,926
Cimarex Energy Co Energy 73.3 -4.20%                397,130
Apache Corp Energy 31.7 -3.56%            1,235,359
Incyte Corp Health Care 78.6 -2.71%            1,005,959
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY