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S&P 500 closes above 2,900 posting third weekly gain as US stocks rally strong to close out week

Apr 12, 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 rally with the S&P 500 posting its third straight weekly gain, closing above 2,900 on strong bank earnings and the announced oil sector deal
  • The S&P 500 finished up 0.66%, Nasdaq Composite up 0.46%, and Russell 2000 up 0.36%
  • University of Michigan Sentiment Index in March was 96.9, coming much below the 98.2 consensus and below the 98.4 in March
  • Uber announced it will go public at a $100 billion valuation, seeking to raise $10 billion in its IPO 
  • We are sure you have already seen our video talking about shorting KRE, the SPDR S&P Regional Bank ETF using Put Spreads, "Time to Short Bank Stocks! We Show You How"  Earlier this week we published a commentary about flows in the XLF, the Financials Select Sector SPDR ETF.  Now, XLF has more exposure to the money banks that will do well if the stock market moves, etc., while KRE is a regional bank ETF.  In the current environment, with rates on hold (with downward pressure), expectations for NIM will need to be revised downwards.  We are beginning to worry about asset quality too given the growth in loan books over the last few years with rates so cheap.  Haven’t really heard anyone speaking about these 2 ETFs.  Looking like an amazing long-short pair, long XLF and Short KRE.
  • Check out these short  SCREAMING BUY videos on stocks you need to check out NOW:
  • We show you how to raise your rates: FORGET THE FED! These US Large-Cap Top Buy HIGH DIVIDEND YIELD STOCKS will raise your rates! 
  • A look at flows into growth vs. valueThe Growth vs Value Debate – Which one does Mr. Market love more? 
  • Check out our Top US Consumer BUYSSHOP TIL YOU DROP! US Consumer Stocks to BUY NOW for maximum gains in your portfolio!
  • We are looking at the factors driving US Growth Stocks: Factor Friday: Factor Performance Driving US Growth Stocks
  • Financials (+1.93%), Materials (+1.31%), and Industrials (+1.28%) stocks were the top performers in the S&P 500 today
  • Consumer Staples (+0.28%), Energy (+0.18%), and Healthcare (-0.97%) 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 3.42x
  • 124 stocks in the S&P 500 hit 4-week highs while 18 stocks reached 4-week lows
  • 49 stocks in the S&P 500 closed overbought while 2 stocks closed oversold according to the 16-day RSI Measure
  • 133 stocks in the Nasdaq Composite hit 4-week highs while 59 stocks reached 4-week lows
  • 347 stocks in the Nasdaq Composite closed overbought while 186 stocks closed oversold according to the 16-day RSI Measure
  • The VIX finished flat at 13.27 after closing at 13.02 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

Global Consumer Stocks Trending in the News

  • Alibaba (BABA) founder Jack Ma told employees he does not need workers looking for a 9 to 5 workday.  Jack Ma endorsed the 996 work culture-9am to 9pm, 6 days a week.  “To be able to work 996 is huge bliss,” Ma told employees.  He added, “If you want to join Alibaba, you need to be prepared to work 12 hours a day otherwise why even bother.”  Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas
  • Campbell Soup (CPB) is preparing to sell its fresh food division Bolthouse Farms to a group led by the executive that ran the unit, according to the WSJ.  Campbell will fetch $500 million for the unit, much less than it paid for the division 7 years ago.    Fresh food is ending up being much more difficult to deal with than the packaged food Campbell is known for, and Campbell is refocusing on packaged food as it seeks to turn around its business.  Campbell is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Geely Automotive (SEHK:175) said its Volvo Cars division will start to build its XC40 SUV in Luqiao, China.  Volvo will build the cars in a facility that already builds a model from Lynk, its sister company.  Polestar, another sister company focused on EVs and performance cars, will start production of its first EV model at the same plant, in the coming months.  Shortly, Geely will be building 3 models from 3 different brands on the same production line, using the same architecture underpinning all of them.  Geely Automotive is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Jumia Technologies (JMIA) debuted today and rose 54%.  Jumia is called the Amazon (AMZN) of Africa though is based in Berlin.  Jumia is a 7-year old online retailer that raised $196 million in its IPO.  Jumia has 4 million customers in 14 countries and hopes to expand aggressively post-IPO.  Jumia is not rated on our Global Top Stock Ideas.
  • Lawson Inc. (TSE: 2651) shares fell by double-digits as investors showed their distaste for a decision by the company to focus on growth over a dividend payment. Lawson lowered its target payout ratio to 50% so it can allocate retained earnings to support affiliated stores and other purposes, according to Goldman Sachs. The dividend cut also spurred a 16% slash to Goldman Sachs’ price target for Lawson shares. Lawson is not rated in our 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

  • SoftBank Group Corp. (TSE: 9984) shares traded higher today, touching their highest level in 19 years, as investors speculate that the company could at least double the return from its investment in Uber Technologies Inc. (UBER). Uber Technologies officially filed IPO documents earlier this week and is expected to IPO at a valuation of between USD$90bn and USD$120bn in May. SoftBank is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas.
  • Walt Disney (DIS) announced that its new streaming service will launch November 12th with a $7 monthly cost, a bet that it can undermine Netflix will a considerably cheaper charge.  Netflix’s most popular plan costs $11.  Disney’s service will be full of its original movies, plus content from its Star Wars, Marvel and Pixar franchises.  Disney expects the service to break even within 5 years.  Wal Disney is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Commonwealth Bank of Australia (ASX: CBA) is said to be working on a plan to cut more than 10,00 jobs and save about AUD$2bn in costs, according to an Australian newspaper. Commonwealth Bank of Australia, the national’s largest lender, may also close up to 300 of its 1,000 branches. The report says that CEO Matt Comyn may want to keep the plan a secret until after Australian elections in May. Commonwealth Bank of Australia is rated “Unattractive” in our Australia Large-Cap Global Top Stock Ideas.
  • JP Morgan (JPM) reported first quarter results that beat consensus pretty much across the board.  Revenue of $29.85 billion beat $28.36 expectation adjusted EPS of $2.60 beat the $2.35 consensus.  First quarter stock trading revenue of $1.74 billion beat $1.73 billion consensus while investment banking revenue of $1.75 billion beat the $1.63 billion expectation.  JP Morgan reported assets under management of $2.1 trillion.  JP Morgan provided full year guidance of $58 billion for interest income, sees adjusted expenses of $66 billion with net charge-offs of $5.5 billion.  JP Morgan is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • PNC Financial (PNC) reported first quarter results that matched consensus.  First quarter EPS of $2.61 matched consensus of $2.61.  First quarter loans of $323.3 billion compares to $226.3 a year earlier.  NIM on a tax equivalent basis came at 2.98%, in line with 2.97% consensus.  PNC Financial is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Wells Fargo (WFC) reported a solid first quarter result with revenue of $21.6 billion beating consensus.  First quarter EPS of $1.20 beat $1.09 consensus.  Expenses fell 7.3% to $13.9 billion, proof that the cost-cutting program is bearing fruit.  The first quarter efficiency ratio came at 64.4%, worsening from 63.6%.  Analysts have reacted positive to the results.  Wells Fargo is rated “Neutral” in our US Large-Cap Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • Adecco (SWX: ADEN) and Randstad (ENXTAM: RAND) both saw their recommendations raised by Bank of America Merrill Lynch due to an improvement in the economy that may provide a boost to European staffing companies. Both staffing companies saw their stock recommendations raised to buy at Bank of America Merrill Lynch from underperform. Adecco is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. Randstad is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Fastenal (FAST) delivered first quarter EPS of 68 cents, beating the 67 cents consensus.  Fastenal first quarter sales of $1.31 billion matched consensus.  Fastenal saw daily sales growth of 12.2% in the quarter and a gross margin of 47.7%.  Analysts note Fastenal has been able to execute in a challenging environment for industrial distributors.  Fastenal is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • General Electric (GE) is finalizing its agreement to pay $1.5 billion to settle claims related to its now shuttered sub-prime lending business.  GE will make the payment to settle civil claims with the US Justice Department that is misrepresented the quality of the mortgage-backed securities it was offering for sale.  The final agreement does not require GE to admit liability.  General Electric is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Northrop Grumman (NOC) was chosen to develop prototypes of sensing capabilities using undersea organisms.  The US Defense Advanced Research Projects Agency (DARPA) Biological Technology Office chose Northrop Grumman for its PALS-Persistent Aquatic Living Sensors-program that would detect threats under water.  Northrop Grumman will develop the hardware that will use artificial intelligence to detect threats using living organisms.  Northrop Grumman is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas

Global Power & Commodities Stocks Trending in the News

  • Chevron (CVX) has agreed to acquire all of Anadarko Petroleum (APC) in a $33 billion deal.  Chevron will pay a 39% premium, $65 per share for Anadarko, to acquire all of the company.  The acquisition will give Chevron acreage in the Permian Basin plus access to the LNG market which is expected to see strong export led growth.  Chevron expects the deal to add to free cash flow and earnings within a year.  Chevron is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Anadarko Petroleum is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Newmont Mining (NEM) shareholders approved the $10 billion acquisition of Canada-based Goldcorp (TSX:G).  Newmont shareholders had to approve 2 measures, the first allows for the increase in common shares.  The second measure allows for the issuance of those shares to complete the deal.  The measures passed with 75% and 98% approval, respectively.  Newmont shareholders will receive a special dividend of 88 cents per share on May 1st.  Newmont Mining is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.  Goldcorp is rated “Top Short” in our Canada All-Cap Global Top Stock Ideas.
  • Petrobras (PBR) said it is reversing a previously announced diesel price hike.  The Brazilian government has been under pressure from truckers who have been protesting about the diesel price hike coming. Officially, Petrobras said it reviewed its hedge position and decided it did not need to hike the price of diesel, saying it is maintaining parity with international prices.  As Petrobras is a government-controlled company, most don’t buy that story.  Petrobras is rated “Attractive” in our Brazil All-Cap Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • GN (CPSE: GN) shares traded notably higher today after Martin Munk, a senior account manager at Jyske Bank, said that preliminary results for the firm's audio unit in CY1Q2019 were, “extremely strong,”. Munk also said that he and the company, “expect that the market will have to raise estimates.” GN is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas. 

Global Real Estate Stocks Trending in the News

  • Daiwa House Industry (TSE: 1925) shares fell after the company found that some of its residential buildings are non-compliant with architectural standards and fire protection requirements. Specifically, Daiwa House Industry found problems related to the foundations of its buildings. Daiwa House Industries expects to incur about 100mm yen worth of repairs to 73 apartment buildings due to the issues. Daiwa House Industries is rated “Unattractive” in our Japan Large-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 3.74 basis points to 2.39%
  • US 5-Year Treasury Bonds are lower with yields up 6.44 basis points to 2.37%
  • US 10-Year Treasury Bonds are lower with yields up 6.27 basis points to 2.55%
  • The US Treasury 2s-5s Spread has widened 2.7 basis points to -0.02%
  • The US Treasury 2s-10s Spread has widened 2.53 basis points to 0.17%
  • US Treasury 5s-10s Spread has narrowed 0.17 basis points to 0.18%

Currencies

  • EUR€ is up 0.373% against the USD$ in after hours to 1.1295
  • GBP£ is little changed 0.115% against the USD$ in after hours to 1.3073
  • CHF is little changed 0.04% against the USD$ in after hours to 0.9971
  • JPY¥ is up 0.304% against the USD$ in after hours to 112

Commodities

  • WTI Crude is up 0.49% to USD$63.89/bbl with the Brent-WTI spread up USD$0.27 to USD$7.28/bbl
  • Gold is little changed -0.08% to USD$1291.45/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
Anadarko Petroleum Corp Energy 47.5 32.01%            4,494,117
PG&E Corp Utilities 6.95 20.65%            2,975,086
Walt Disney Co/The Communication Services 112 11.54%            4,705,133
Pioneer Natural Resources Co Energy 143 11.53%                314,783
Concho Resources Inc Energy 122 8.75%                685,683
 
Underformers Sector Price 1D % Chg Volume
Anthem Inc Health Care 260 -8.48%                208,938
National Oilwell Varco Inc Energy 29.3 -8.39%                901,836
UnitedHealth Group Inc Health Care 256 -5.18%            2,559,664
Chevron Corp Energy 112 -4.94%            5,450,352
Netflix Inc Communication Services 354 -4.49%            3,946,123
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY