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A clear lack of clarity! Mixed bag of results gives clouded picture of economy, stocks post slight gains midday

Apr 16, 2019

 

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Market data as of 12 noon EST

US Market Snapshot

  • US stocks are posting slight gains midday as a mixed bag of earnings results today clouds the view forward for the economy and investors
  • The S&P 500 is currently up 0.1%, Nasdaq Composite is up 0.38%, and Russell 2000 is up 0.2%
  • Oil is trading higher midday despite estimates for inventories to rise for the fourth consecutive week
  • The yield on the 10-year bond, at 2.585%, is back to where it was trading before the FOMC turned more dovish, Bloomberg notes 
  • White House Economic Adviser Larry Kudlow made positive comments on trade negotiations with China, saying talks on predatory technology practices are going very well
  • The CEO of BlackRock (BLK), Larry Fink, said most investors are under-invested in the markets and the risk is of a melt-up, not a melt-down
  • March industrial production fell 0.1%, worse than the forecast a +0.2% m/m change and +0.1% in February  
  • Chicago Fed President Charles Evans, after saying he expects rates to stay stable through 2020, said rates may need to be cut if inflation does not pick up
  • European Central Bank officials have made clear they have little interest in updating their negative interest-rate tool 
  • Check out ETFs you need to ownThe Top ETF Ideas for the Week You Need: Momentum Stocks and Small-Caps Stand Out
  • We are focused on US Value ETFs in today's Data Daily Technical Tuesday: Comparing Technical Signals for US Value ETFs
  • Financials (+1.02%), Consumer Discretionary (+0.51%), and Tech (+0.44%) stocks are the top performers in the S&P 500 today
  • Utilities (-0.74%), Healthcare (-0.78%), and Real Estate (-1.8%) 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 1.28x
  • 135 stocks in the S&P500 are at 4-week highs while 19 stocks are at 4-week lows
  • 74 stocks in the S&P 500 are overbought while 1 stock is  oversold according to the 16-day RSI Measure
  • 139 stocks in the Nasdaq Composite are at 4-week highs while 80 stocks are at 4-week lows
  • 320 stocks in the Nasdaq Composite are overbought while 296 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently little changed at 12.95 from yesterday's close of 12.32

Stocks Trending in the News

Click name for Q-Factor rating and financials data.

Global Consumer Stocks Trending in the News

  • JBS SA (BOVESPA: JBSS3) shares jumped after Morgan Stanley upgraded the stock from equal-weight to overweight and boosted its price target for the stock from 14.00 reais/share to 20.50 reais/share. Morgan Stanley believes that the rally in the world’s largest meat producer has just begun and is far from over. Morgan Stanley analyst Rafael Shin wrote in a report that, “African swine fever has sparked a rally across global protein stocks, but it’s not too late to buy in.” JBS SA is rated “Attractive” in our Brazil All-Cap Global Top Stock Ideas.
  • Zalando (DB:ZAL) unexpectedly posted a profit in the first quarter, beating analysts expectations for a loss.  Zalando posted a slight profit in the quarter while consensus was for a loss of 10 million euros.  Zalando has pledged to vastly increase its size over the next 5 years as it seeks to become a major European retailer, more profitable than the others in Europe.  Zalando has risen 84% over the last 12 months with investors seeming to believe they can deliver.  Zalando is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  

Global Information Technology Stocks Trending in the News

  • YouTube, part of Alphabet’s (GOOGL) Google unit, mistakenly labeled live streaming video of the Notre Dame Cathedral fire with a text box as it were footage of the 9/11 attack.  YouTube algorithms assign text boxes to some video clips on YouTube and the machines made a mistake with the Cathedral fire.  YouTube introduced these text boxes in an effort to dispel conspiracy theories related to many things, including 9/11.  Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Electronic Arts (EA), Take-Two Interactive Software (TTWO), and Activision Blizzard (ATVI) shares slipped today following a Wire report giving details of Sony’s (TSE: 6758) next PlayStation console. The report details that the upcoming PlayStation console, “won’t be landing in stores anytime in 2019.” The lack of new gaming hardware coming in 2019 is causing analysts to raise concerns that gamers will cool spending habits until new hardware is released in late 2020. Electronic Arts is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. Take-Two is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas. Activision Blizzard is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  Sony is rated "Attractive" in our Japan Large-Cap Global Top Stock Ideas. 

Global Financial Stocks Trending in the News

  • Bank of America (BAC) reported solid first quarter, with increased income from its consumer unit being offset by lower trading volume.  Net interest income climbed 9.7% in the quarter while trading revenue fell 13%.  Net interest margin rose to 2.51% from 2.42% a year ago.  Consumer loans rose 5% as Bank of America’s CFO said the bank sees no signs of a recession in the near future.  Bank of America is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • BlackRock (BLK) reported first quarter EPS of $6.61, handily beating consensus of $6.13.  BlackRock saw assets under management rose to $6.52 trillion.  BlackRock saw inflows in the quarter, reversing the outflow challenges it saw last year among its institutional clients.  Institutional inflows were $29.1 billion in the quarter while its iShares ETFs saw $81 billion in inflows.  BlackRock is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Charles Schwab (SCHW) reported first quarter EPS of 69 cents beating 66 cents consensus.  First quarter revenue of $2.72 billion beat consensus of $2.68 billion.  Charles Schwab reported a return on equity in the first quarter of 20%.  Charles Schwab has 3.59 trillion client assets in accounts, 11.8 million active brokerage accounts with 418k revenue trades per day.  Charles Schwab is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Comerica (CMA) reported first quarter results that beat consensus.  Comerica reported first quarter adjusted EPS of $2.08, beating consensus of $1.93.  Comerica’s NIM on a tax-equivalent basis was 3.79% with an efficiency ratio of 50.8%.  Comerica provided guidance of 2-4% loan growth, 1-2% deposit growth and a 3% decline in non-interest expenses.  Comerica is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • First Horizon (FHN) shares edged higher after announcing fiscal first quarter adjusted EPS that was in line with analyst expectations. First Horizon generated an adjusted EPS of USD$0.35 in its most recent quarter while it reported a net interest margin of 3.31%, slightly missing consensus for 3.40%. First Horizon expects current net interest margin levels to hold through FY2019. First Horizon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Goldman Sachs (GS) had its price target cut to a market-low of $170 at Societe Generale as it reiterates its sell rating.  Goldman Sachs “almost completely lost out on the recent bull market rally,” SocGen notes in its report.  Goldman suffers from a litany of challenges and SocGen believes Goldman has been late to address all of them.  Flat earnings and a focus on less profitable areas have left Goldman in a terrible spot with a clouded future, SocGen highlights.  Goldman Sachs is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Progressive (PRG) reported first quarter results that handily beat expectations.  First quarter EPS of $1.83 was well above the $1.36 consensus.  Progressive first quarter net premiums earned was $8.46 billion while net premiums written was $9.24 billion.  Progressive’s combined ratio was 88.8% in the first quarter.  Personal policies in force grew 11% in the quarter.  Progressive is rated “Attractive” in our US Large-Cap Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • Deutsche Lufthansa AG (DB: LHA) shares slid, dragging down broader travel stocks alongside it, after the German airline reported a loss in its fiscal first quarter due to growing fuel costs. Lufthansa observed an adjusted loss before interest and taxes of 336mm euros in its fiscal first quarter, significantly worse than its earnings of 52mm euros a year earlier. Lufthansa maintained its FY2019 forecast for an adjusted EBIT margin between 6.5% and 8%. Lufthansa is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • JB Hunt (JBHT) reported first quarter EPS of $1.09 matching consensus.  JB Hunt first quarter revenue of $2.09 billion trailing consensus of $2.2 billion.  JB Hunt operating income of $169 million was flat year-on-year due to a number of higher costs.  JB Hunt is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas
  • Jet Airways India Ltd. (BSE: 532617) shares fell notably lower after its lenders have refused to bail out the cash-strapped airline, according to reports that cite people familiar with the matter. One of India’s oldest airlines may now be forced to ground its flights as a result. Reports indicate that Jet Airways India executives will meet in Mumbai on Tuesday to assess whether or not they will shut down operations. Jet Airways India is rated “Top Short” in our India All-Cap Global Top Stock Ideas.
  • Packaging Corp. (PKG) and International Paper (IP) shares slid alongside other US packaging stocks following the release of weaker-than-expected March containerboard industry data points. Box shipments in March fell 3.0% y/y while inventories declined by 47,000 tons. Bank of America Merrill Lynch instituted downgrades for Packaging Corp., International Paper, and WestRock (WRK) as a result. Packaging Corp. is rated “Attractive” in our US Large-Cap Global Top Stock Ideas. International Paper is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. WestRock is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • HCA (HCA) could suffer after Jefferies warned on the name.  “Investors should be a bit more cautious around HCA from here and through 2020,” Jefferies wrote in a note to clients.  The comments were made after seeing HCA run 33% over the last 33%, the best performer in the sector.  HCA is among the most owned hospital stocks and with the growing talk of a single-payer system they could see weakness near-term.  HCA is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Johnson & Johnson (JNJ) reported first quarter adjusted EPS of $2.10 ahead of $2.04 consensus.  First quarter revenue of $20.02 billion beat $19.61 billion consensus.  Its OptumRx unit saw a 10.6% growth in revenue to $17.6 billion.  Johnson & Johnson increased full year EPS guidance to $8.53-$8.63 up from $8.50-$8.65; present consensus is $8.59.    Johnson & Johnson is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • UnitedHealth Group (UNH) reported first quarter adjusted EPS of $3.73 ahead of $3.60 consensus.  First quarter revenue of $60.31 billion beat $59.7 billion consensus.  UnitedHealth’s medical care ratio was 82% in the first quarter.  Its OptumRx unit saw a 10.6% growth in revenue to $17.6 billion.  UnitedHealth increased full year EPS guidance to $14.50-$14.75, up from $14.40-$14.65; present consensus is $14.65.  UnitedHealth Group is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas
  • WaVe Life Sciences (WVE) shares lost as much of a third of their value, falling to the lowest levels since November 2017, after announcing the results from an early clinical trial of its experimental therapy, suvodirsen, for treating Duchenne muscular dystrophy. Despite the negative interpretation by investors, Leerink analyst Mani Foroohar defended the stock in a note to clients, saying, “We believe that due to differences in chemistry between the compound, comparisons of doses between drugs is not an appropriate proxy of potential efficacy.” WaVe Life Sciences is not rated in our Global Top Stock Ideas.

Global Power & Commodity Stocks Trending in the News

  • Entergy (ETR) has agreed to a post-shutdown sale of its 3 nuclear power plants Indian Point 1, 2 and 3 to Holtec International for decommissioning.  Entergy had committed to close the plants after NY State Governor Andrew Cuomo insisted on their closure.  The 3 plants provide 30% of metro New York City’s power.  With the closure, Entergy will have retired all of its nuclear power plants.  Entergy is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas
  • McDermott International (MDR) shares soared by double-digits after the company said the Train 1 of its Cameron liquefied natural gas project in Louisiana reached its final commissioning stage. As a part of its final commissioning stage, McDermott International will begin to introduce a pipeline feed of gas into the Train 1 of its export facility for liquefied natural gas. McDermott International is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
 
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US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 1.46 basis points to 2.40%
  • US 5-Year Treasury Bonds are lower with yields up 2.89 basis points to 2.40%
  • US 10-Year Treasury Bonds are lower with yields up 3.43 basis points to 2.58%
  • The US Treasury 2s-5s Spread has widened 1.43 basis points to -0.01%
  • The US Treasury 2s-10s Spread has widened 1.97 basis points to 0.18%
  • US Treasury 5s-10s Spread has widened 0.54 basis points to 0.19%

Currencies

  • EUR€ is currently down 0.15% against the USD$ to 1.1287
  • GBP£ is currently down 0.412% against the USD$ to 1.3046
  • CHF is currently down 0.331% against the USD$ to 0.9926
  • JPY¥ is currently little changed against the USD$ at 111.98

Commodities

  • WTI Crude is currently up 0.3% to USD$63.59/bbl with the Brent-WTI spread down USD$-0.46 to USD$7.22/bbl
  • Gold is currently down -1.07% to USD$1274.17/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
Omnicom Group Inc Communication Services 76.1 4.51%                445,860
Western Digital Corp Information Technology 37.7 3.78%            1,235,667
Netflix Inc Communication Services 354 2.96%            1,275,202
BlackRock Inc Financials 401 2.55%                  75,207
Ralph Lauren Corp Consumer Discretionary 106 2.49%                  29,313
 
Underperformers Sector Price 1D % Chg Volume
HCA Healthcare Inc Health Care 131 -7.33%                269,428
Westrock Co Materials 40.3 -6.69%                599,397
Humana Inc Health Care 288 -6.45%                167,042
Packaging Corp of America Materials 89.7 -6.15%                128,925
HollyFrontier Corp Health Care 52.9 -3.50%                466,301
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