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Goldilocks would love the US economy! Tame inflation data sends US stocks higher, ahead of Fed minutes

Apr 10, 2019

 

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Market data as of 12:15pm EST

US Market Snapshot

  • US stocks are posting gains midday with a muted CPI report for March pushing markets higher
  • The S&P 500 is currently up 0.22%, Nasdaq Composite is up 0.46%, and Russell 2000 is up 0.85%
  • US CPI for March rose 0.40% matching consensus, above 0.2% of the prior month
  • US CPI ex-food and energy for March rose 0.10%, below 0.2% consensus and 0.2% of the prior month
  • The minutes from the last Federal Reserve FOMC meeting will be released this afternoon
  • The IMF cut its global growth forecast to 3.3% from 3.5%, its third cut to growth in the last 6 months; this is the lowest expected growth since 2009
  • Read more on the IMF reportIMF sees more tortoise, less hare ahead; lowers global growth outlook for third time in its World Economic Outlook 
  • We look at the upcoming earnings seasonAs the 1Q Earnings Train Barrels Towards Us, We Take a Quick Look at Expectations
  • We are looking at the implied volatility of US Growth Stocks in today's Data Daily Options Wednesday: A Comparison of Implied Volatility of US Growth ETFs 
  • Uber is set to seek a $10 billion valuation in its upcoming IPO, making it the biggest IPO of the year thus far
  • The IMF has frozen Venezuela's access to $400 million of special drawing rights as the political chaos there intensifies
  • Energy (+0.81%), Tech (+0.58%), and Healthcare (+0.38%) stocks are the top performers in the S&P 500 today
  • Industrials (-0.19%), Utilities (-0.22%), and Materials (-0.25%) 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 1.81x
  • 39 stocks in the S&P500 are at 4-week highs while 10 stocks are at 4-week lows
  • 42 stocks in the S&P 500 are overbought while 2 stocks are oversold according to the 16-day RSI Measure
  • 119 stocks in the Nasdaq Composite are at 4-week highs while 62 stocks are at 4-week lows
  • 226 stocks in the Nasdaq Composite are overbought while 167 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently moving down at 13.86 from yesterday's close of 14.28

Stocks Trending in the News

Click name for Q-Factor rating and financials data.

Global Consumer Stocks Trending in the News

  • Canada Goose (TSX:GOOS) announced it is opening 6 more stores around this world.  Canada Goose will open stores in Milan and Paris, in the US it will open a store in Minneapolis and in Canada it will open stores in Toronto, Edmonton and Banff.  Canada Goose presently operates 11 company stores.  Canada Goose is rated “Attractive” in our Canada All-Cap Global Top Stock Ideas.
  • Coty (COTY) commented on allegations against it, saying that plaintiff’s claims that Coty omitted certain information from its Schedule 14D-9 lack merit.  Coty said the legal analysis underlying the opinion is faulted and it intends to file the allegation in court.  Coty said similar suits will not be commented on if presented.  Coty is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Levi Strauss (LEVI) reported first quarter revenue growth of 7%, delivering $1.44 billion in revenue.  Levi Strauss reported first quarter EPS of 37 cents compared with a loss of 7 cents a year earlier.  Levi sees margins to remain flat or improve slightly.  Levi Strauss is not rated in our Global Top Stock Ideas.
  • Nordstrom (JWN) was upgraded to overweight from sector weight at KeyBanc.  Nordstrom shares have fallen 30% since November’s peak and KeyBanc thinks its weakness was “transient” and it “is undervalued at current levels.”  KeyBank notes the demand environment has improved since mid-March and it notes the strong growth in e-commerce expected.  Nordstrom is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Sony Corporation (TSE: 6758) shares regressed in Wednesday’s trading after the company told CNBC that it has had no talks, “whatsoever,” regarding its US entertainment unit. After the NY Post reported on Monday that there was, “chatter,” of Amazon Inc. (AMZN) approaching Sony last year about a potential acquisition or partnership, Sony refuted the rumors. Sony is rated “Attractive” in our Japan Large-Cap 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.  
  • Tesco (LSE:TSCO) updated guidance, saying it is on track to hit an operating margin of 3.5-4% for the current year.  Tesco is nearing the end of a 5-year turnaround plan in which it managed to cut $2 billion in costs from its operations.  Tesco is using its growing buying power to hold down costs and bolster profitability.  Tesco is rated “Neutral” in our United Kingdom All-Cap Global top Stock Ideas.
  • Under Armour (UAA) shares suffer after B. Riley FBR published a report saying the company fell in its annual athletic survey.  Under Armour continues to be a laggard behind larger competitors in the sector.  Under Armour got some good news when Texas Tech advanced to the NCAA finals (but lost), the first team sponsored by Under Armour in the tournament to do that.  Under Armour 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 and Communication Services Stocks Trending in the News

  • Alphabet’s Google (GOOGL) will be focused now on better monetizing Google Maps.  Maps is often called the least monetized asset in Google stable of units and they are looking to change that.  Maps is used regularly by over 1 billion people and Google is looking for ways to increase advertising there.  Analysts agreed there is a large opportunity and Google is committed to tapping it further.  Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  
  • Baidu (BIDU) was downgraded to perform from outperform at Oppenheimer while its $205 price target was removed.  Baidu will be weighed down by higher spending this year and Oppenheimer expects the stock to be range-bound until the end of the year.  The higher spending will benefit revenue only in 2020 and 2021, hence the reason for the downgrade.  Baidu is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • G4S Plc (LSE: GFS) shares soared by more than 20% after Canadian security company Garda World said that it is considering an offer for its UK counterpart. The comments from Garda World confirm earlier rumors in the media and sent the price of G4S shares up the most intraday in their history. Garda World said that a further announcement regarding an offer will be made, “if and when appropriate.” G4S is rated “Top Short” in our United Kingdom All-Cap Global Top Stock Ideas.  
  • Lenovo (SEHK: 992) shares traded notably higher in Hong Kong following a media report that cited CEO Yang Yuanqing saying the company plans to grow every one of its business segments into, “a cash cow.” The article also cites Yuanqing explaining that Lenovo’s mobile segment has turned to profit, and bottom-line growth will likely outpace that of its top-line. Lenovo is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.  
  • Zayo Group Holdings (ZAYO) shares traded higher by more than 7% after Reuters reported that a consortium, which includes Digital Colony Partners, EQQT AB, and Stonepeak Infrastructure Partners, secured exclusive rights to negotiate a purchase of the company. Although Reuters did not detail an exact offer in its report, a deal could value Zayo Group between USD$8bn and USD$9bn, excluding the company’s USD$5.9bn in long-term debt. Zayo Group is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  

Global Financials Stocks Trending in the News

  • Goldman Sachs (GS) is returning to a business it has not touched in a decade-collateralized loan obligations (CLOs).  Goldman’s asset management unit GSAM has a platform called Battery Park to distributes deals to clients and is presently working on its first.  Demand has grown for CLOs and Goldman intends to increase its exposure there.  Goldman Sachs is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • American Airlines (AAL) issued a profit warning for the first quarter, saying the grounding of its 737 max fleet, as well as the government shutdown, is weighing on results.  American Airlines said revenue per seat will grow only 1%, down from 2% guidance.  Pre-tax margin will come between 2% and 4%, down from 2.5% to 4.5% guidance previously.  American Airlines is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas
  • Boeing (BA) saw the first month without an order for its 737 aircraft in over seven years.  The 737 Max is grounded worldwide in the wake of its second crash.  There are other models of the 737 for sale and none of them were bought by any airline this past month.  Boeing has accepted that its sensor caused the crash and has vowed to resolve the issue with the 737 Max.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas
  • Delta Airlines (DAL) reported first quarter EPS of 96 cents, beating consensus of 90 cents and beating its own guidance of 85-95 cents.  Adjust revenue grew 7.5% to $10.4 billion.  Delta sees second quarter EPS $2.05-$2.35 while consensus is $2.13.  Delta expects total adjusted revenue to grow 6-8% in the second quarter with adjusted TRASM up 1.5%-3.5%.  Delta Airlines is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas
  • Snap-On Inc. (SNA) shares extended their losses for a third-straight day after David Manthey, a Baird analyst and long-term bull for the stock, downgraded his recommendation from outperform to neutral. Manthey also lowered his price target for Snap-On from USD$186/share to USD$160/share, sending shares lower by as much as 4% in Wednesday’s trading. Manthey explained to clients that he sees signals of a more challenging competitive environment that will weigh on performance in the near-term. Snap-On is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.  

Global Health Care Stocks Trending in the News

  • Indivior Plc (LSE:INDV) has been charged by the US with hiding the danger of the drug.  Indivior deceived doctors in the process, fueling the opioid epidemic in the US.  Indivior told doctors and US government health plans that its Suboxone Film was safe and not addictive, the lawsuit charges.  Indivior lost 75% of its value on the news  Indivior is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas and “Neutral” in our United Kingdom All-Cap Global top Stock Ideas. 

Global Power & Commodities Stocks Trending in the News

  • Sibanye Gold Ltd. (JSE: SGL) shares slid by double-digits Wednesday after the company sold about USD$120mm worth of shares in a move to bolster its own balance sheet. The move by Sabanye Gold comes as it readies for an intensifying conflict with one of South Africa’s most militant labor unions. Members of the Association of Mineworkers and Construction Union that work for Sibanye have been on strike for 4 months and has dragged output at the company's mines in South Africa. Sibanye is not rated in our Global Top Stock Ideas.  

 

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US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -3.26 basis points to 2.31%
  • US 5-Year Treasury Bonds are higher with yields down -3.35 basis points to 2.27%
  • US 10-Year Treasury Bonds are higher with yields down -2.86 basis points to 2.4%
  • The US Treasury 2s-5s Spread has narrowed 0.09 basis points to -0.05%
  • The US Treasury 2s-10s Spread has widened 0.4 basis points to 0.15%
  • US Treasury 5s-10s Spread has widened 0.49 basis points to 0.2%

Currencies

  • EUR€ is currently little changed against the USD$ at 1.1264
  • GBP£ is currently up 0.337% against the USD$ to 1.3096
  • CHF is currently down 0.26% against the USD$ to 0.9975
  • JPY¥ is currently down 0.207% against the USD$ to 110.91

Commodities

  • WTI Crude is currently up 0.77% to USD$64.47/bbl with the Brent-WTI spread little changed USD$0.25 to USD$6.8/bbl
  • Gold is currently up 0.36% to USD$1308.81/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
Conagra Brands Inc Consumer Staples 21.1 7.08%            1,576,571
Valero Energy Corp Energy 78.8 3.60%                192,578
HollyFrontier Corp Energy 52.9 3.55%                126,092
Kroger Co/The Consumer Staples 28.6 3.43%                995,195
Fortinet Inc Information Technology 74.6 2.71%                370,685
 
Underperformers Sector Price 1D % Chg Volume
AmerisourceBergen Corp Health Care 77.2 -6.11%                131,865
Snap-on Inc Industrials 162 -2.65%                  73,075
Cardinal Health Inc Health Care 47.6 -2.49%                171,851
Twenty-First Century Fox Inc Communication Services 48.3 -1.98%                  96,101
McKesson Corp Health Care 123 -1.90%                  60,526
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