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Waiting with bated breath, US stocks are flat midday anticipating trade news

Apr 04, 2019

 

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Market data as of 12:15pm EST

US Market Snapshot

  • US stocks are flat midday with all eyes on Washington, hoping for some positive trade news in the absence of other market-moving news
  • The S&P 500 is currently up 0%, Nasdaq Composite is down 0.26%, and Russell 2000 is up 0.13%
  • President Trump is set to meet Vice-Premier Liu He as trade negotiations enter the final phase, with hopes for a final deal that could be signed by President Trump and President XI at a summit in the near future
  • Reports are that a summit could be announced for a signing of an agreement soon; the agreement would give China until 2025 to comply fully
  • 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
  • US Initial Jobless Claims for the week ending March 30th were 202k, coming better than the 215k expected and 211k from the prior week
  • Did you know that the S&P 500 has ONLY risen each month of the 1st quarter 20 times since 1950?  If history is any guide, US stocks should continue to rally with the average return +9.5% for the rest of the year when the S&P 500 was positive in January, February and March.
  • JPMorgan (JPM) CEO James Dimon said the volatility investors saw in the fourth quarter is a sign of what's to come, in a letter to shareholders that had a noticeable negative outlook to it
  • Check out these Tech Top Picks: Forget the FANGs, THESE Titans of Techs are what your portfolio NEEDS NOW!
  • Oil remains well bid again today, with WTI crude rising +0.40%, trading at $62.70
  • We highlight ETFs in this post today: Could ingrained beliefs about low-cost ETFs be mistaken? A new study suggests perhaps so
  • German factory orders fell 4.2% in February, coming much worse than the 0.3% growth expected
  • Italy is slashing its growth forecast to just 0.1% for the coming year while increasing the expected budget deficit to between 2.3% and 2.4% of GDP
  • The VIX is getting cheap just in time!  Earnings season is right around the corner and that means there will be a lot of opportunities to play stocks announcements!
  • Telecom (+0.6%), Industrials (+0.58%), and Energy (+0.52%) stocks are the top performers in the S&P 500 today
  • Utilities (-0.59%), Real Estate (-0.61%), and Tech (-0.69%) 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 1.22x
  • 182 stocks in the S&P500 are at 4-week highs while 16 stocks are at 4-week lows
  • 65 stocks in the S&P 500 are overbought while 2 stocks are oversold according to the 16-day RSI Measure
  • 146 stocks in the Nasdaq Composite are at 4-week highs while 77 stocks are at 4-week lows
  • 443 stocks in the Nasdaq Composite are overbought while 143 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently little changed at 13.72 from yesterday's close of 13.74

Stocks Trending in the News

 

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Global Consumer Stocks Trending in the News

  • Constellation Brands (STZ) is selling a group of wine brands to E&J Gallo.  Constellation is selling about 30 brands to Gallo, all of which sell for less than $11.   The brands being sold represented about 40% of Constellation’s wine sales.  Constellation has been looking to sell its low margin brands after reporting weak earnings in the last quarter.  Constellation Brands is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Office Depot Inc. (ODP) shares fell by the most in nearly a year and a half after the company warned investors that its upcoming quarterly results will be worse than expected. Office Depot told investors that it expects to report quarterly revenue of USD$2.76bn on May 8th, slightly below analyst consensus of USD$2.82bn. Office Depot explained that continued cash burn at its newly acquired CompuCom division is a problem that continues to persist. Office Depot is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Target (TGT) is boosting the minimum wage it pays employees to $13 per hour, a $1 hike, that will take effect in June.  The hike is part of Target’s announced goal of getting to $15 by the end of 2020.  Target did not say how many employees would see a raise from the move.  Wages at retailers have been rising amid a tight labor market.  Retailers are the largest private employer in the US.  Target is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary 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

Global Information Technology and Communication Services Stocks Trending in the News

  • 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.
  • Micron Technology (MU) was downgraded to equal-weight from overweight at Morgan Stanley.  Micron’s $32 price target was maintained but the recent move up of the stock makes Morgan Stanley cut the rating, Micron has rallied 51% since December.  Morgan Stanley reiterated that it sees too much optimism in the semiconductor sector.  Micron is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Tencent (TCEHY, SEHK:700) closed Asia’s largest bond placement in over a year, placing $6 billion in bonds.  Tencent placed five, seven, ten and 30-year bonds in the sale.  The largest chunk was #3 billion of 10-year bonds and Tencent looked to lock in low rates for its borrowing.  These priced at 1.45% above US 10-year Treasuries.  Most if the bonds were sold without any yield premium, showing the strong demand for these bonds.  Tencent is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Twitter (TWTR) saw its price target hiked to $41 from $33 at Guggenheim while its buy rating was maintained.  Guggenheim says Twitter is “well positioned to exceed investor expectations over the next several years.”  Guggenheim sees this for Twitter given the steps they have taken to improve the health of the platform.  Twitter is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas
  • Verizon (VZ) launched the 5G era in the US Wednesday, launching a week ahead of schedule in Chicago and Minneapolis.  South Korea also launched its 5G and it is not clear who was first.  Verizon launched first as a show of technological prowess.  5G networks can provide connections that are up to 100 times faster than present connections.  Verizon is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • Boeing’s (BA) flight control system was to blame for the crash of the most recent 737 Max, according to a preliminary report from Ethiopian investigators.  The report says pilots followed Boeing’s emergency procedures but were unable to save the jet.  The report puts the spotlight on Boeing to come up with a fix.  Press reports are that a fix from Boeing should come shortly.  Boeing is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas
  • 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
  • Embraer (ERJ) won an order from Africa’s Peace Air worth $2.1 billion.  Peace air ordered 10 Embraer 195 E2 planes with options for another 20 planes.  This will be the first sale of 195 jets in Africa.  Peace Air will use the new planes to expand service as part of its “no city left behind” initiative of expansion.  Embraer is rated “Unattractive” in our Brazil All-Cap Global Top Stock Ideas.

Global Financial Stocks Trending in the News

  • 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.  
  • Commerzbank AG (DB: CBK) and Deutsche Bank AG (DB: DBK) are heading into a key weekend that will determine whether merger talks deepen or if they are broken off, according to people brief on the matter. Reports detail that both Commerzbank and Deutsche Bank are favoring intensifying merger talks, but nothing is certain. Both banks declined to comment on the reports. Commerzbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  
  • Nomura Holdings Inc. (TSE: 8604) announced a plan to cut USD$1bn in costs at the company's struggling investment bank. The largest securities firm in Japan will also cut roughly 150 jobs across its locations in the Americas, the Middle East, Europe, and Africa. These job cuts are in addition to previously planned reductions at its Hong Kong and Singapore locations. Nomura is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas.
  • UniCredit SpA (BIT: UCG) is said to be preparing a rival bid for Commerzbank AG (DB: CBK) in the event that merger talks with Deutsche Bank AG (DB: DBK) fizzle out. According to a report by the Financial Times, UniCredit’s plan would involve purchasing a stake in Commerzbank and merging the financial institution with its own HypoVereinsbank. UniCredit is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. Commerzbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Commodities & Power Stocks Trending in the News

  • PG&E (PCG) has chosen the head of the Tennessee Valley Authority as its next CEO.  Bill Johnson will take over as its new CEO and a completely new board will be installed.  PG&E is facing $30 billion in liabilities and is trying to steer out of bankruptcy.  Mr Johnson is being chosen for his safety and operational expertise.  PG&E is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
  • Weatherford International (WFT) shares slid after BMO analyst Daniel Boyd wrote in a note to clients that the company's cash burn is expected to be more than USD$150mm for CY1Q2019 as it continues with its transformation program. Analysts expect Weatherford to report a loss excluding certain items in CY1Q2019 of USD$0.12/share. Weatherford is not rated in our Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • Abeona Therapeutics (ABEO) shares traded slightly higher after its ABO-101 gene therapy program for patients with Sanfilippo syndrome type B received fast-track designation from the FDA. Abeona expects to activate additional study sites for the drug across the globe later in the year with current study sites in the US and Spain. Abeona is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas.  

 

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US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -0.39 basis points to 2.33%
  • US 5-Year Treasury Bonds are higher with yields down -1.5 basis points to 2.31%
  • US 10-Year Treasury Bonds are higher with yields down -1.79 basis points to 2.50%
  • The US Treasury 2s-5s Spread has narrowed 1.11 basis points to -0.02%
  • The US Treasury 2s-10s Spread has narrowed 1.4 basis points to 0.18%
  • US Treasury 5s-10s Spread has narrowed 0.29 basis points to 0.19%

Currencies

  • EUR€ is currently little changed against the USD$ at 1.1218
  • GBP£ is currently down 0.661% against the USD$ to 1.3071
  • CHF is currently down 0.2% against the USD$ to 0.9998
  • JPY¥ is currently little changed against the USD$ at 111.54

Commodities

  • WTI Crude is currently up 0.3% to USD$62.65/bbl with the Brent-WTI spread little changed USD$-0.14 to USD$6.63/bbl
  • Gold is currently little changed -0.13% to USD$1288.2/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
Constellation Brands Inc Consumer Staples 160 4.08%                364,579
Perrigo Co PLC Health Care 45.1 3.87%                143,691
Macy's Inc Consumer Discretionary 24.9 3.68%            1,063,662
Capri Holdings Ltd Consumer Discretionary 40.4 3.66%                265,237
Harley-Davidson Inc Consumer Discretionary 37.1 3.32%                172,895
 
Underperformers Sector Price 1D % Chg Volume
Fortinet Inc Information Technology 74.6 -4.51%                338,982
Take-Two Interactive Software Inc Communication Services 106 -4.10%                437,147
Lamb Weston Holdings Inc Consumer Staples 68.9 -3.31%                126,409
Arista Networks Inc Information Technology 223 -3.27%                  77,754
salesforce.com Inc Information Technology 149 -3.14%                408,936
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