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I'll take one Brexit deal, please! Theresa May accepts EU Brexit extension offer, European stocks close flat

Apr 11, 2019

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scroll down for the Asian markets recap

International Stock Markets Indexes

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

European Markets Recap

  • UK PM Theresa May accepted the EU offer of an extension of Brexit until October 31st, now she must convince Parliament
  • EU negotiators have agreed on a mandate to begin trade talks with the US
  • The US and China have agreed on an enforcement mechanism for the trade deal being discussed, according to comments from Treasury Secretary Steve Mnuchin
  • The minutes from the last Federal Reserve FOMC meeting confirmed its dovish bias, with a majority of the Committee agreeing the wait-and-see approach would be best amid growing uncertainty
  • The Euro Stoxx 600 closed up +0.06%, the FTSE 100 declined -0.05%, the DAX rose +0.25%, and the CAC 40 finished up +0.66%
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 1.47x
  • Automobiles & Parts (+1.29%), Travel & Leisure (+1.28%), and Banks (+1.16%) stocks were the top performers in the Euro Stoxx 600 today
  • Basic Resources (-1.43%), Utilities (-0.92%), and Health Care (-0.82%) stocks were the worst performers in the Euro Stoxx 600 today
  • 71 stocks in the Euro Stoxx 600 hit 4-week highs while 31 stocks closed at 4-week lows
  • 51 stocks in the Euro Stoxx 600 finished the trading session overbought while 4 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed little changed -1 points today to 13.28 after closing at 14.28 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1258

Asian Stock Markets Indexes

Asian Markets Recap

  • The Nikkei 225 finished up +0.11%, the Hang Seng ended down -0.93%, the Hang Seng China Enterprise declined -1.24%, and the CSI 300 was -2.16%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.74x
  • 15 stocks in the Nikkei 225 hit 4-week highs while 50 stocks reached 4-week lows
  • 3 stocks in the Nikkei 225 closed overbought while 5 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished negative with the advance/decline ratio for the Hang Seng closing at 0.06x
  • 4 stocks in the Hang Seng hit 4-week highs while 3 stocks reached 4-week lows
  • 4 stocks in the Hang Seng closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure

Stocks Trending in the News

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Global Consumer Stocks Trending in the News

  • Bed, Bath & Beyond (BBBY) delivered another weal results, with same store sales falling 1.4% during the most recent quarter.  Gross margin fell to 34.7% from 35.9%.  Adjusted EPS of $1.20 beat $1.12 consensus, revenue of $3.31 billion was in line.  Bed, Bath & Beyond gave 2019 EPS guidance of $2.11-$2.20 while present consensus is $1.80.  Bed, Bath & Beyond is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Caesars Entertainment (CZR) shares edged higher following a CNBC report that Eldorado Resorts (TCK) and billionaire Tilman Fertitta, the owner of Golden Nugget casino and the Houston Rockets NBA team, are both considering bids for the company. Although Caesars is not actively exploring a sale, the board of directors would consider a bid if it created enough value. Caesars Entertainment is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Chipotle (CMG) was downgraded to hold from buy at Jefferies.  Chipotle saw its price target hiked to $700 from $600 at the same time.  Chipotle’s average price target in the market today is $595.  Chipotle is set to report earnings on April 24th.  Chipotle is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Pick” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Keurig Dr. Pepper (KDP) shares fell today after the stock was downgraded by Morgan Stanley from equal-weight to underweight. Morgan Stanley also cut its price target for Keurig Dr. Pepper from USD$27/share to USD$24/share, slightly below Keurig Dr. Pepper’s average price target of USD$$28/share across 21 analyst forecasts. According to Morgan Stanley, the rating cut comes as Keurig Dr. Pepper faces increased business and financial risks. Keurig Dr. Pepper is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Rite-Aid (RAD) reported fiscal fourth quarter revenue of $5.38 billion, trailing consensus of $5.56 billion.  Rite-Aid reported a loss of 1 cent per share compared with a 2 cents loss expected.  Rite-Aid provided fiscal 2020 revenue guidance of $21.5-$21.9 billion, below the $22.09 billion average expectation.   Rite-Aid expects same stores sales growth of 0%-1% in fiscal 2020.  Rite-Aid is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas
  • Tesla (TSLA) may receive a boost after a group of Senators proposed extending the tax credit that will expire for Tesla vehicles soon.  The $7500 credit will expire once their production exceeds 200,000 EVs, which will happen in the near future.  The legislation would increase the threshold for its expiration to 400,000 vehicles.  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.  
  • Weight Watchers International Inc. (WTW) shares slid after JPMorgan pulled-back its earnings forecast for the company as the number of daily active users using the company’s application has, “tracked even worse,” than expected. According to JPMorgan analyst Christina Brathwaite, the decline in app users during the first 3 months of 2019 suggest that overall subscribers will fall 18% y/y. Weight Watchers is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology Stocks Trending in the News

  • Facebook (FB) announced a host of new measures to control false, extreme and violent content.  Facebook will expand its use of the Associated Press as its fact-checker.  Facebook will also make Group administrators more responsible for removing content and allow users to remove posts even after they are no longer members.  Facebook has made progress but this type of harmful content persists, it acknowledges.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • IBM (IBM) was initiated at Credit Suisse with an outperform rating.  Credit Suisse gave IBM a market-high price target of $173.  IBM’s acquisition of Red Hat has positioned itself as a dominant player in the fast growing hybrid cloud computing sector.  IBM is expected to return to revenue-driven EPS growth in the near future.  IBM is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Microsoft (MSFT) and Amazon (AMZN) are the finalists to win the contract for the Pentagon’s cloud computing update, the Defense Department said.  The Pentagon is awarding a $10 billion contract to update its network in a program called JEDI-joint enterprise defense infrastructure.  The Pentagon said a final decision could come as early as mid-July.  Microsoft 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 Pick” in our US Consumer Discretionary Global Top Stock Ideas.  
  • PagerDuty Inc. (PD) shares soared as much as 64% in debut trading after the maker of tools for software developers raised USD$218mm in its public offering. PagerDuty sold roughly 9.07mm total shares at USD$24/share and the stock opened today at USD$36.75/share. PagerDuty is not yet rated in our Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • JetBlue (JBLU) announced it plans to start flights to London in 2021.  JetBlue said it intends to have multiple flights per day to London from both New York and Boston.  JetBlue is studying which of London’s 4 airports make the most sense, it has not yet secured gate space at any of them.  JetBlue has been looking to add flights to London for some time.  JetBlue is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas
  • Lyft (LYFT) shares continued their descent on news that Uber’s IPO could be $10 billion, dwarfing Lyft’s $2.3 billion deal.  Uber is targeting a $100 billion valuation, also dwarfing Lyft’s $17.5 billion.  When Lyft started trading it was greeted with fanfare as the only listed ride-sharing company.  Lyft’s shares are down 12% since going public.  Lyft is not yet rated in our Global Top Stock Ideas.  

Global Industrials Stocks Trending in the News

  • Banca Monte dei Paschi di Siena SpA (BIT: BMPS) shares traded notably hiher after CEO Marco Morelli said that the firm’s executives are regularly evaluating the potential merger of the company with other banks. Morelli clarified that the firm’s executives do this even though the final decision would be up to the Italian state. Morelli is currently trying to turn around the struggling Italian lender through cost cuts and the curbing of risk. Banca Monte dei Paschi di Siena SpA is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas.

Global Power & Commodities Stocks Trending in the News

  • Cairn India (NSEI: CAIRN) shares slipped today after CEO Sudhir Mathur and CFO Pankaj Kalra simultaneously resigned from the company. According to a spokesperson from Cairn India, “Such movements in management are part of natural evolution in any organization, and are in line with career aspirations and personal priorities of individuals.” Cairn India is not rated in our Global Top Stock Ideas.
  • Duke Energy (DUK) issued a formal response to the state of North Carolina’s demand that it excavate ash basins.  Duke is arguing that the process used by the North Carolina Dept of Environmental Quality was not scientifically sound and lacked full consideration of the science and engineering required.  Duke will lay out details on the engineering needed and the costs to its customers when it formally appeals the decision with the state of North Carolina soon.  Duke Energy is rated “Top Buy” ” in our US SMID-Cap Global Top Stock Ideas.
  • Dominion Energy (D) suffered an explosion on one of its gas lines after a contractor struck the line.  The line struck was under a sidewalk and the explosion rocked downtown Durham where it happened.  One person was killed and injured 15 in the accident.  The explosion happened in a building adjacent to a warehouse that houses the largest collection of vintage Porsches in the world, which were damaged in the blast.  Dominion Energy is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • Vale (VALE) executives will be charged in connection with its recent dam collapse, Brazilian prosecutors said.  Prosecutors said they have evidence that Vale employees knew the dam was unsafe.  Prosecutors explained that charges could include murder, manslaughter and environmental damage.  Prosecutors said they need 2-3 months to discover if senior executives knew of the unsafe conditions.  Vale is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas.

 

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Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS