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Like an eagle catching an updraft, US stocks soar on strong jobs data and optimistic trade sentiment

Apr 05, 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 continue their rally today on strong jobs data and optimistic trade sentiment
  • The S&P 500 finished up 0.46%, Nasdaq Composite up 0.59%, and Russell 2000 up 0.96%
  • President Trump urged the Federal Reserve to cut interest rates in comments he made this morning
  • Change in Nonfarm Payrolls for March was 196k, beating 177k expectation of jobs to be added compared to just 20,000 in the prior period.
  • Average Hourly Earnings rose just 0.1% in March, below the 0.3% consensus and 0.4% in February
  • US Unemployment rate held steady at 3.8% as expected
  • Both the US and China reported progress in trade talks with President Trump mentioning a potentially "monumental" deal being considered and China calling it a "new consensus"
  • President Trump said "we still have a ways to go" and said a deal is likely still weeks away
  • 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
  • The ratio between US consumer discretionary and consumer staples stocks has bounced back from its 2H2018 slump and is coming back closer to its 18-year high.  Technical analysts are taking this as a positive sign for US stocks as it suggests there is increasing demand for the %higher beta stock found in consumer discretionary.  For the year, S&P 500 Consumer Discretionary is +18.7% while S&P 500 Consumer Staples is +10.6%. 
  • We highlight ETFs in this post today: Could ingrained beliefs about low-cost ETFs be mistaken? A new study suggests perhaps so
  • A JP Morgan survey of institutional money managers with over $700 billion among them showed 54% are seeking fee reductions from the hedge funds where they have investments, this following a ddisastrous2018 for hedge fund performance
  • UK PM Theresa May has requested an extension from the EU of Brexit until June 30th, with France already saying it's "premature" to talk about an extension
  • We look at factors driving German stocks: Factor Friday: Factor Performance Driving German Stocks
  • Check out these Tech Top Picks: Forget the FANGs, THESE Titans of Techs are what your portfolio NEEDS NOW!
  • The S&P 500 finished up 0.46%, Nasdaq Composite up 0.59%, and Russell 2000 up 0.96%
  • Energy (+1.69%), Utilities (+1%), and Real Estate (+0.76%) stocks were the top performers in the S&P 500 today
  • Financials (+0.09%), Telecom (+0.04%), and Materials (-0.05%) 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 4.1x
  • 111 stocks in the S&P 500 hit 4-week highs while 12 stocks reached 4-week lows
  • 53 stocks in the S&P 500 closed overbought while 1 stocks closed oversold according to the 16-day RSI Measure
  • 132 stocks in the Nasdaq Composite hit 4-week highs while 69 stocks reached 4-week lows
  • 310 stocks in the Nasdaq Composite closed overbought while 162 stocks closed oversold according to the 16-day RSI Measure
  • The VIX finished flat at 13.48 after closing at 13.58 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.

Global Consumer Stocks Trending in the News

  • Amazon (AMZN) is set to enter the generic drug market as soon as October, according to a note from Cleveland Research.  The note comments that Amazon will likely make a “more meaningful move” into the pharmacy business over the next 12 months.  Amazon also announced it has added some health-related functions to Alexa, including scheduling doctor visits and checking prescriptions.  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. 
  • Boston Beer (SAM) shares tumbled by the most in more than 6 months after Goldman Sachs downgraded the stock from neutral to sell. Goldman Sachs also slashed its price target for Boston Beer from USD$270/share to USD$245/share, implying a 7% downside as of Thursday’s close. Goldman explained that Boston Beer’s sales growth will likely deaccelerate as the company’s Twisted Tea brand observes slower growth. Boston Beer is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Staples Global Top Stock Ideas.
  • Chipotle (CMG) published a statement saying none of its restaurants are implicated in the latest E. coli outbreak.   The statement was in response the federal officials’ investigation of a multi-state outbreak of E. coli.  Officials said no specific focus exists yet and Chipotle said they have not been contacted by officials.  Chipotle is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Nike (NKE) snagged tennis start Naomi Osaka from Adidas (DB:ADS), in a surprise move.  Osaka was expected to sign with Adidas for a record sum, reported to be $8.5 million.  Nike then announced it signed #1 ranked Osaka for an undisclosed amount.  Osaka will wear Nike clothing for the first time later this month.  Nike is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  Adidas is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Roku (ROKU) was downgraded at Guggenheim to neutral from buy.  Roku also saw its price target trimmed to $72 from $77.  Roku is facing competition from a number of large players making its platform vulnerable.  Free content from bigger players on their own platforms is threatening Rolu’s growth outlook, Guggenheim notes, saying Roku is fairly valued at these levels.  Roku is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Snap Inc. (SNAP) shares rallied after the company hosted an event and announced several new products, one of which includes a video game business. The suite of new products unveiled by the social media company instituted a slew of upgrades from analysts covering the stock. Snap Inc. is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Alphabet’s Google (GOOGL) was forced to scrap its outside council that was set up to advise it on complicated ethical issues related to artificial intelligence.  The council, called the Advanced Technology External Advisory Council, became the focus on complaints for the members Google chose for it.  “It became clear that in the current environment, ATEAC could not function as intended,” Google said, so it disbanded the council and will try again.  Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  
  • Facebook (FB) and other social media executives could be held personally liable for harmful content on their platforms in the UK, according to a report from Bloomberg.  Legislation may be presented as early as Monday with those provisions, the report notes.  UK ministers are unhappy with the rate of progress on self-regulation and are ready to craft government regulations for the space.  The recent massacre in New Zealand and the use of the Facebook platform before and during that incident gave new impetus for the regulations.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Intel (INTC) was downgraded to market perform from outperform at Wells Fargo Securities.  Intel’s price target was raised to $60 from $55.  Wells writes that the downgrade “reflects a more cautious view on the current semi demand and data points” with the close of the first quarter.  Wells is cautious about 2H19 demand with the potential for further weakness, seeing downside to its current expectations.  Intel is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • SAP (DB:SAP) was downgraded to reduce from neutral at Oddo BHF.  SAP saw its price target  cut to 84 euros from 90 euros.  Oddo cut SAP’s target to well below the market average of 107.47 euros.  SAP is trading above 102 euros so Oddo sees significant downside from present levels.  SAP is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • SES SA (BDL: SESGL) shares rose by the most in 9 months after FCC Commissioner Michael O’Reilly made supportive comments in regards to C-band. O’Reilly discussed that the FCC needs to adopt an order within the, “coming months,” on C-band to get spectrum for 5G technology. The comments from O’Reilly, however, did not confirm that the FCC will follow through with its C-Band Alliance (CBA) to run the auction. SES is not rated in our Global Top Stock Ideas.
  • Snap (SNAP) is getting into gaming on its platform as it tried to edge into the gaming market.  Snap said its platform will launch multi-player games with its first called Botmoji Party.  Snap is seeking to have users spend more time on its platform and a slew of new games with be launched with development partners.  Snap is further blurring the line between social network and gaming.  Snap is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.  

Global Industrials Stocks Trending in the News

  • Boeing (BA) has accepted that its flight control systems was to blame for the crash of Ethiopian Airlines.  Boeing’s CEO said “We own it and we know how to fix I,” in a statement following a preliminary report on the crash.   Pilots on the doomed flight followed Boeing’s instructions when problems began, them shut off the system.  Pilots then turned that system back on and the plane crashed.  All 737 Max jets are grounded and it is not clear when they will fly again.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas
  • Dow Inc (DOW) was initiated at JP Morgan with an underweight rating.  Dow Inc’s target was set at $49, the lowest on Wall Street today.   JP Morgan highlight a number of risks facing Dow including the trade war, lower ethylene derivative margins, slower global growth and large capacity additions in 2019.  Dow will also have to cope with higher feedstock costs, additionally weighing on the investment case.  Dow is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • SNC-Lavalin Group Inc. (TSX: SNC) will sell a 10% stake in its Toronto-area toll highway for up to CAD$3.25bn as the engineering firm ramps up efforts to bolster its balance sheet. SNC-Lavalin will sell the highway stake to OMERS Infrastructure pension fund, reducing the engineering firm’s stake to just 6.8% from 17%. Since January, SNC has lost nearly a third of its value as the company has issued 2 profit warnings. SNC-Lavalin Group is rated “Top Buy” in our Canada All-Cap Global Top Stock Ideas.
  • Triumph Group (TGI) announced it hired bankers to help it filed alternatives for its Aerospace Structures business unit.  The announcement comes at the end of a 3-year restructuring effort.  Triumph could reap $00-500 million in a sale, according to analysts.  Triumph has limited potential buyers for the asset.  Triumph  is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas and “Top Short” in our US Industrials Global Top Stock Ideas.

Global Financial Stocks Trending in the News

  • JP Morgan (JPM) CEO Jamie Dimon commented on banks’ potentially limited ability to help during the next crisis situation.  He commented in his letter to shareholders that new regulations and liquidity requirements will not allow banks to respond as they did during the crisis.  JP Morgan is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Societe Generale SA (ENXTPA: GLE) shares edged lower after the company announced plans to cut up to 700 jobs in Paris and to eliminate 100s more at its London and New York locations. The slew of job cuts at Societe Generale comes after the firm’s investment bank observed a difficult CY1Q2019. Societe Generale is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • TradeWeb Markets (TW) placed its IPO and started trading Thursday.  Share were priced at $27 and the shares opened the day 27% higher at $34.26.  TradeWeb sold 40 million shares raising $1.1 billion in the sale and twice increased the size of the offering due to demand.  The IPO values TradeWed at $7.9 billion.  TradeWeb is not yet rated in our Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • Canopy Growth Corp (TSX:WEED) started trading 5 years ago this week as the first listed pot stock.  Canopy Growth has risen 2,159% since going public, rising higher in a cloud of smoke.  What started as a listing on the Toronto Exchange’s Venture Market with a stock a bot over $1, is now a $15 billion company.   Canopy Growth is rated “Unattractive” in our Canada All-Cap Global Top Stock Ideas  
 
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Actionable and Transparent Quantitative ResearchActionable and Transparent Quantitative Research

US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 0.24 basis points to 2.33%
  • US 5-Year Treasury Bonds are higher with yields down -1.14 basis points to 2.30%
  • US 10-Year Treasury Bonds are higher with yields down -1.8 basis points to 2.49%
  • The US Treasury 2s-5s Spread has narrowed 1.38 basis points to -0.03%
  • The US Treasury 2s-10s Spread has narrowed 2.04 basis points to 0.16%
  • US Treasury 5s-10s Spread has narrowed 0.66 basis points to 0.19%

Currencies

  • EUR€ is little changed 0.036% against the USD$ in after hours to 1.1217
  • GBP£ is down 0.306% against the USD$ in after hours to 1.3037
  • CHF is little changed 0% against the USD$ in after hours to 1
  • JPY¥ is little changed 0.045% against the USD$ in after hours to 111.71

Commodities

  • WTI Crude is up 1.58% to USD$63.08/bbl with the Brent-WTI spread little changed USD$0.03 to USD$6.89/bbl
  • Gold is little changed -0.05% to USD$1291.5/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
Apache Corp Energy 31.7 6.59%                478,084
EOG Resources Inc Energy 98.6 5.30%            1,016,110
Anadarko Petroleum Corp Energy 47.5 4.33%                621,937
Centene Corp Health Care 125 4.26%            2,163,633
TechnipFMC PLC Energy 22.7 4.18%                312,776
 
Underformers Sector Price 1D % Chg Volume
Capri Holdings Ltd Consumer Discretionary 40.4 -2.47%                145,800
Kohl's Corp Consumer Discretionary 67.3 -1.99%                531,561
Macy's Inc Consumer Discretionary 24.9 -1.92%            2,954,873
Gap Inc/The Consumer Discretionary 24.9 -1.83%            1,412,412
Freeport-McMoRan Inc Materials 11.6 -1.70%            3,702,553
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY