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Home is Where the Gains Are: US stocks Trading at Record Level on Strong Home Sales Data, Earnings

Apr 23, 2019

 

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Market data as of 12:15 pm EST

US Market Snapshot

  • US stocks are rallying midday with strong housing data and strong corporate earnings reports pushing the S&P 500 above its all-time closing high in today's trading 
  • The S&P 500 is currently up 0.85%, Nasdaq Composite is up 1.26%, and Russell 2000 is up 1.58%
  • US homes sales rose 4.5% in March, well above the 2.7% drop that was consensus
  • So far, roughly 80% of earnings reports in the S&P 500 universe have come above expectations, fueling risk appetite
  • The Richmond Fed Manufacturing Index came at 3 for April, below 10 consensus
  • Oil is higher again this morning in the wake of US efforts to stop all Iranian oil exports, read more: Closing the Export Door: US aims to push Iranian exports to zero, eliminating all sanctions waivers
  • Is the rally in US stocks getting ahead of the current profit outlook for stocks?  For the year, the S&P 500 is up 16.7% while for the month of April, it is up 2.7%.  Earnings growth for 1Q obviously doesn’t support the move in April but rather it is the fact that expectations are so low.  Remember, we highlighted a few weeks ago that quarterly earnings expectations for 1Q were cut the most in over 3 years.  In other words, we are in a beat and raise scenario which is good for stocks. 
  • Is it time to really begin zeroing in on stocks who exhibit high scores in our quality value factor group? While there is a general focus on the “value” factor, “quality” is just as important a factor in our opinion.  Companies that have high quality factor scores typically have healthier balance sheets and strong cash flow generation.  In addition, companies that exhibit high “quality” scores typically also screen out well as “low volatility” plays. 
  • A statement from China's Politburo is being interpreted as an indication that the massive stimulus seen in the first quarter may not be maintained, potentially negative for Chinese equities
  • Stimulus slow downRunning Dry: Is the Chinese Stimulus Spigot About to be Turned Off?
  • Check out these micro-caps: Micro-Cap, Mega-Opportunity: Check out the TOP BUY MICRO-CAP Stocks with Massive Potential
  • Our CIO on CNBCLet's Trade Earnings! Our CIO discusses trading Facebook and Amazon earnings on CNBC's "Trading Nation" 
  • The S&P 500 is currently up 0.85%, Nasdaq Composite is up 1.26%, and Russell 2000 is up 1.58%
  • Healthcare (+1.83%), Consumer Discretionary (+1.41%), and Real Estate (+1.26%) stocks are the top performers in the S&P 500 today
  • Energy (+0.15%), Utilities (+0.05%), and Consumer Staples (+0.03%) 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 4.21x
  • 57 stocks in the S&P500 are at 4-week highs while 57 stocks are at 4-week lows
  • 61 stocks in the S&P 500 are overbought while 19 stocks are oversold according to the 16-day RSI Measure
  • 112 stocks in the Nasdaq Composite are at 4-week highs while 117 stocks are at 4-week lows
  • 198 stocks in the Nasdaq Composite are overbought while 334 stocks are oversold according to the 16-day RSI Measure
  • The VIX is currently little changed at 12.30 from yesterday's close of 12.42

Stocks Trending in the News

Click name for Q-Factor rating and financials data.

Global Consumer Stocks Trending in the News

  • Asos Plc (AIM:ASC) owner and CEO Anders Holch Polsen, Denmark’s richest man, lost 3 of his 4 children in the terrorist attacks in Sri Lanka.   A statement confirmed 3 of is children were killed but not which 3.  It was also not clear in which blast they were killed as there were multiple blasts in multiple locations as part of the attacks.  Asos Plc is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas 
  • Coca-Cola (KO) reported first quarter earnings that beat expectations.  Coca-Cola reported first quarter ESP of 48 cents ahead of 46 cents consensus.  Coca-Cola saw unit case volume growth of 2%.  Coca-Cola sees full year organic revenue growth of about 4% in 2019.  Water and sports drinks were the stars of the quarter growing 6%.  Coca-Cola is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas
  • Harley Davidson Inc. (HOG) shares traded flat after the company announced better-than-expected profits in the first-quarter as it weathered the effects of tariffs and President Trump tweets. Despite the better-than-expected profit, adjusted net income still slumped 26% in the quarter. An adjusted EPS of $0.98 in the first quarter for Harley Davidson was much better than the average analyst estimate for $0.85. Harley Davidson is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Hasbro (HAS) reported a profit in the first quarter, a surprise as consensus was for a loss.  First quarter EPS of 21 cents came well above the 11 cents per share loss that was expected.  Hasbro first quarter revenue of $732.5 million was well above $662.7 million expected.  Hasbro saw a 9% rise in franchise brands revenue in the first quarter.  Hasbro continues to expect $50 to $55 million in cost savings in 2019.  Hasbro is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas
  • Kohl’s Corporation (KSS) shares traded higher by the most in 4 months after the company announced it would begin to accept returns for Amazon.com Inc. (AMZN) customers at all of its locations, beginning this July. The initiative is an expansion of the initial partnership between Kohl’s and Amazon that began n 2017 as a pilot program featured in 100 Kohl’s stores in Los Angeles, Chicago, and Milwaukee. Kohl’s is rated “Attractive” in our US Large-Cap Global Top Stock ideas and “Top Buy” in our US Consumer Discretionary 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.
  • Lululemon (LULU) is set to host its first analysts day since 2014.  Lululemon is slated to lay out its strategy for the next few years.  Lululemon reported its fast sales growth in 6 years in March and investors are keen to know how the company will maintain its momentum.  Lululemon is due to hit its $4 billion revenue target before its 2020 deadline and its plans to take the company to the next level will be the focus.  Lululemon is expected to announce a loyalty program.  Lululemon is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas
  • Polaris (PII) reported first quarter earnings and full year guidance above consensus.  Polaris first quarter adjusted EPS of $1.08 beatings consensus if $0.91.  First quarter sales of $1.50 billion matched consensus.  Polaris provided 2019 adjusted EPS guidance of $6.05 to $6.30 while consensus if $6.06.  Polaris said dealer inventory dropped 1% in the first quarter.  Polaris is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Proctor & Gamble (PG) reported fiscal third quarter core earnings ahead of consensus.  Proctor & Gamble third quarter EPS of $1.06, ahead of $1.03 expectations.  Fiscal third quarter revenue of $16.46 billion, also ahead of $16.36 billion consensus.  Proctor & Gamble saw organic revenue growth of 5% in the fiscal third quarter.  Proctor & Gamble reiterated full year guidance for core EPS growth of 3-8% with sales growth of 1%.  Proctor & Gamble is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas
  • Whirlpool (WHR) reported first quarter adjusted that beat expectations.  Whirlpool reported first quarter EPS of $3.11 beating $2.86 consensus.  First quarter net sales of $4.80 billion was in line with consensus of $4.83 billion.  Whirlpool saw first quarter organic revenue growth of 3%.  Whirlpool reiterated EPS guidance for 2019 of $14.00 to $15.00, in line with consensus of $14.62 and sees $800 million in free cash flow in 2019.  Whirlpool is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas

Global Information Technology Stocks Trending in the News

  • Twitter (TWTR) reported first quarter sales that beat expectations.  Twitter reported first quarter revenue of $787 million, up 18% y/y and ahead of $775 million consensus.  Twitter reported active users grew to 134 million daily active users beating consensus of 128.6 million.  Twitter gave revenue guidance for the second quarter of $770 million to $830 million.  Adjusted EPS of 9 cents trailed consensus of 14 cents.  Twitter is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.    
  • Verizon (VZ) reported first quarter adjusted EPS that beat consensus.  Adjusted EPS came at $1.20 while consensus was $1.17.  Verizon operating revenue in the first quarter was $32.13 billion, in line with $32.15 billion consensus.  Verizon added 61,000 wireless subscribers, well below the 206,000 expected.  Verizon is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.    

Global Financial Stocks Trending in the News

  • Fifth Third Bancorp (FITB) reported first quarter adjusted earnings that beat consensus.  Fifth Third Bancorp first quarter adjusted EPS of 63 cents came above the 59 cents consensus.  Fifth Third Bancorp reported a common equity Tier 1 ratio of 9.65% with a net interest margin of 3.28%.  Loan loss provisions totaled $89 million, below the $97 million expected.  Fifth Third Bancorp is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • State Street Corp. (STT) shares slid after its quarterly financial results missed in key metrics and US deposit costs were higher than expected. State Street saw a net interest margin of 1.54% in its fiscal first-quarter that trailed the consensus of 1.56%. State Street’s noninterest bearing deposit costs for its US business rose 19 basis points in the quarter compared to an expected 16 basis point increase. State Street is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

Global Industrial Stocks Trending in the News

  • Jet Blue (JBLU) reported first quarter adjusted EPS that beat consensus.  Adjusted EPS came at 16 cents while consensus was 12 cents.  Jet Blue operating revenue in the first quarter was $1.87 billion, in line with $1.87 billion consensus.  Jet Blue provided second quarter guidance for available seat miles, seeing that grow 4.5% to 6.5%.  Jet Blue sees revenue per seat mile growing 1% to 4% in the second quarter.  Jet Blue is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.    
  • Lockheed Martin Corp. (LMT) shares traded notably higher after the company raised its FY2019 profit and sales forecast as it reaps the benefits of higher production of its F-35 fighter jet. Lockheed Martin offered EPS guidance of $20.05/share in FY2019, higher than the average analyst estimate for $19.60. Lockheed Martin saw its order backlog grow $3 billion from levels at this time last year to a record $133.5 billion. Lockheed Martin is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.  
  • United Technologies (UTX) shares edged higher after the company raised its FY2019 profit forecast, citing strength in the aerospace market. United Technologies expects to generate adjusted earnings of between $7.80/share and $8.00/share, up $0.10 from previously offered guidance. RBC Capital Markets analyst Deane Dray explained in a note to clients that, “The upside was driven by the aero business, which both posted better than expected sales and margins.” United Technologies is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.

Global Commodity & Power Stocks Trending in the News 

  • Nucor (NUE) shares edged slightly higher after the company reported earnings of $1.63/share that beat analyst consensus of $1.50. Nucor’s net sales of $6.10 billion in its first-quarter matched analyst consensus for revenue of $6.10 billion. Nucor shipped 6.77 million tons of shipments in the first quarter. Nucor is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Steel Dynamics (STLD) said it sees healthy demand for steel now and for the rest of 2019 on its earnings conference call.  Steel Dynamics expects overall steel demand to grow 2% y/y over 2019.  The company also expects steel-scrap prices to remain stable.  Steel Dynamics reported first-quarter EPS of 91 cents which trailed the 93 cents consensus.  Revenue of $2.80 billion came in line with US$2.83 billion consensus.  Steel Dynamics is rated “Neutral” in our US Large-Cap Global Top Stock Ideas

Global Health Care Stocks Trending in the News 

  • Quest Diagnostics (DGX) announced first-quarter financial results that broadly beat the average analyst estimate. Quest Diagnostics generated an adjusted EPS of $1.40 in its most recent quarter, slightly above consensus of $1.36. Quest Diagnostic’s top-line revenue of $1.89 billion also edged past analyst expectations for $1.87 billion of revenue. Quest Diagnostics is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Waters Corp. (WAT) announced first-quarter results that broadly missed analyst estimates, sending the stock lower by the most in a decade. Evercore ISI wrote in a note to clients that the quarterly financials were, “just a total disappointment,” with a reported adjusted EPS of $1.60/share missing consensus for $1.73/share. Waters Corp. is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.

 

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US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -2.27 basis points to 2.36%
  • US 5-Year Treasury Bonds are higher with yields down -2.7 basis points to 2.35%
  • US 10-Year Treasury Bonds are higher with yields down -1.99 basis points to 2.56%
  • The US Treasury 2s-5s Spread has narrowed 0.43 basis points to 0%
  • The US Treasury 2s-10s Spread has widened 0.28 basis points to 0.2%
  • US Treasury 5s-10s Spread has widened 0.71 basis points to 0.21%

Currencies

  • EUR€ is currently down 0.409% against the USD$ to 1.1211
  • GBP£ is currently down 0.285% against the USD$ to 1.2945
  • CHF is currently down 0.579% against the USD$ to 0.9789
  • JPY¥ is currently little changed against the USD$ at 111.87

Commodities

  • WTI Crude is currently little changed 0.23% to USD$65.85/bbl with the Brent-WTI spread up USD$0.38 to USD$7.96/bbl
  • Gold is currently down -0.28% to USD$1271.45/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
Twitter Inc Communication Services 33 16.55%            8,599,244
Hasbro Inc Consumer Discretionary 87.8 15.15%                921,763
Kohl's Corp Consumer Discretionary 67.3 8.60%                835,594
Celanese Corp Materials 93.9 7.79%                110,901
Quest Diagnostics Inc Health Care 84.9 6.87%                187,610
 
Underperformers Sector Price 1D % Chg Volume
Waters Corp Health Care 197 -12.75%                277,821
State Street Corp Financials 68.6 -4.22%                380,852
Kimberly-Clark Corp Consumer Staples 117 -3.01%                423,341
Hormel Foods Corp Consumer Staples 43.4 -2.99%                459,484
Albemarle Corp Materials 73.5 -2.74%                199,020
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