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US stocks make like a line dance and move sideways; tech sector drifts lower as President Trump calls for aggressive rate cuts

Apr 30, 2019

 

Better Research, Better Investments.Better Research, Better Investments.
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US Markets End of Day Snapshot

  • US stocks close flat with the tech sector posting closing lower; still, markets are quite close to record levels
  • The S&P 500 finished up 0.1%, Nasdaq Composite is down 0.81%, and Russell 2000 is down 0.45%
  • President Trump again called on the Federal Reserve to cut rates aggressively, saying the economy would :"take off like a rocket" if they cut further
  • The US and China are resuming trade talks today in Beijing, read more: US warships in Taiwan Straight can only mean one thing: US-China Trade Negotiations Resume this Week
  • US Small-Cap stocks have lagged large-cap stocks, the WSJ highlights today how a recent surge in the US dollar could help the Russell 2000 index which remains over 8% below its high while larger-cap indices are within 1% of a record
  • Pending home sales in March rose 3.8%, well above the 1.5% expected
  • Read more on where small-caps may go: Don't Forget About Me! Small-caps Have Trailed their Big Brothers but that may soon change 
  • Warren's words: Warren said what? Warren Buffett has THIS Advice for Individual Investors
  • This week we like Small-Cap ETFsTop ETF Ideas for the Week: Models Continue Bias Towards US Small-Cap ETFs
  • WeWork, rebranded the We Company, filed for its IPO; it was valued at $47 billion in its most recent round of financing
  • Utilities (+1.67%), Consumer Staples (+1.23%), and Real Estate (+1.19%) stocks were the top performers in the S&P 500 today
  • Energy (+0.03%), Consumer Discretionary (-0.2%), and Telecom (-2.56%) 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 1.86x
  • 106 stocks in the S&P 500 hit 4-week highs while 17 stocks reached 4-week lows
  • 80 stocks in the S&P 500 closed overbought while 6 stocks closed oversold according to the 16-day RSI Measure
  • 166 stocks in the Nasdaq Composite hit 4-week highs while 61 stocks reached 4-week lows
  • 514 stocks in the Nasdaq Composite closed overbought while 186 stocks closed oversold according to the 16-day RSI Measure
  • The VIX finished flat at 13.21 after closing at 13.11 yesterday

Stocks Trending in the News

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Global Consumer Stocks Trending in the News

  • AMS AG (SWX: AMS) shares surged by more than 20% after the sensor supplier announced second quarter guidance that beat analyst estimates. AMS AG expects revenue during the second quarter to come between $390 million and $430 million, beat analyst estimates that ranged between $320 million and $400 million. AMS AG attributed to the expected wider adoption of 3D sensing in 2019 as reasoning for the guidance. AMS AG is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas.
  • Beiersdorf AG (XTRA: BEI) announced financials for the first quarter which contained sales that beat the highest analyst estimates. Beiersdorf generated sales of 1.95 billion euros in the first quarter, surpassing the highest analyst estimates that ranged between 1.82 billion euros and 1.88 billion euros. Beiersdorf maintained its guidance for FY2019 while reporting organic revenue growth of 6% in the first quarter. Beiersdorf is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • General Motors (GM) reported first quarter adjusted earnings that beat with revenue that trailed expectations.  General Motors first quarter EPS of $1.41 came ahead of $1.10 expected.  Revenue in the first quarter was $34.9 billion while $35.48 billion was expected.  GM’s Cruise unit, focused on self-driving cars, lost $169 million in the quarter and those losses will grow in 2019 as it gets ready to launch a robo-taxi service.  General Motors is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas
  • Lumber Liquidators (LL) reported a first quarter loss that was worse than expected.  Lumber Liquidators first quarter loss per share was 17 cents, worse than the 13 cents expected.  Net sales for the first quarter came in line at $266.2 million while consensus was for $268 million.  Lumber Liquidators reaffirmed it full year 2019 forecast.  Lumber Liquidators is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Short” in our US Consumer Discretionary Global Top Stock Ideas
  • MGM Resorts (MGM) reported first quarter revenue that beat consensus but earnings that trailed.  First quarter adjusted EPS of 5 cents trailed consensus of 21 cents.  MGM first quarter revenue of $3.18 billion came ahead of $3.13 billion consensus.  MGM saw revenue drop a touch in Las Vegas while growing 23% in China.  MGM is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Mondelez International (MDLZ) reported first quarter adjusted earnings that beat consensus.  Mondelez International posted first quarter adjusted EPS of 65 cents, beating consensus of 61 cents.  First quarter adjusted revenue of $7.02 billion came well above $6.55 billion consensus.  Mondelez International gave adjusted EPS growth guidance of 3%-5% for 2019 with organic net revenue growth of 2%-3%.  Mondelez International 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

  • Alphabet (GOOGL) reported first quarter 2019 results that trailed consensus.  Alphabet first quarter revenue ex-TAC of $29.48 billion trailed $30.04 billion consensus.  Adjusted EPS of $11.90 beat $10.65 consensus, the adjusted number does not contain the $1.7 billion EU fine.  The trends continue in the same direction for Alphabet’s Google-growing at a somewhat slower pace with earnings per clicking dropping, 19% in the most recent quarter.  Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Advanced Micro Devices (AMD) delivered first quarter earnings and revenue in line.  AMD first quarter revenue of $1.27 billion matched consensus of $1.26 billion, growing 8%.  Adjusted EPS of 6 cents came a bit ahead if 5 cents expected.  AMD gave second quarter revenue guidance of $1.47 billion to $1.57 billion.  AMD is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.       
  • Apple (AAPL) reported fiscal second quarter earnings that beat consensus.  Apple first quarter EPS was $2.46, beating $2.36 consensus.  Apple saw revenue of $58 billion in the second quarter beating consensus of $57.49 billion.  Apple announced it would buy back $75 billion worth of stock.  Apple gave third quarter revenue guidance of $52.5 billion to $54.5 billion, well above consensus of $52.2 billion.  Apple said iPhone revenue dropped to $31.05 billion from $37.6 billion a year ago.  Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Mastercard (MA) delivered first quarter revenue and earnings that beat expectations.  Mastercard first quarter revenue of $3.9 billion beat $3.85 billion consensus.  First quarter adjusted EPS of $1.78 beat $1.66 consensus.  Mastercard first quarter dollar volume and purchase volume both rose 12%.  Mastercard said it expects revenue to grow “in the low teens.”  Mastercard is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • McDonalds (MCD) reported first quarter same store sales well above consensus.  McDonald’s first quarter same store sales grew 4.5%, well above the 3% expected.  Total sales grew 5.4%, above 3.5% expected.  First quarter EPS of $1.72 trailed $1.75 expected by a touch.  First quarter revenue of $4.96 billion matched $4.95 billion consensus.  McDonald’s results were helped by strong breakfast sales and its delivery initiatives.  McDonald’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
  • Samsung Electronics Co. (KOSE: A005930) joined chipmaking competitors in announcing an expected rebound in chip prices during the second half of 2019. Samsung made the announcement after the company reported profit in the first quarter that missed the average analyst estimate. Samsung is not rated in our Global Top Stock Ideas.
  • Western Digital (WDC) reported fiscal third quarter earnings that trailed consensus with revenue in line.  Western Digital’s first quarter EPS of 17 cents was well below the 45 cents consensus.  Revenue of $3.67 billion matched $3.68 billion consensus.  Western Digital said it expands a strong demand environment for the rest of 2019.  Western Digital is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.

Global Industrial Stocks Trending in the News

  • Boeing’s (BA) problem continue to worsen with the news that an additional sensor on 737 Max aircraft was not working as airlines anticipated because of mistakes from Boeing.  There exists a separate sensor that was not working to back up the MCAS system that is believed to be involved in the 2 737 Max crashes so far.  Boeing put out a statement yesterday that indicated it either missed or overlooked the sensor problem when the plane was certified.  Boeing has not commented on what exactly happened, given the investigation that is underway.  Boeing is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas
  • Epiroc (OM: EPI A) shares slipped after its order intake during the first quarter missed analyst estimates by roughly 5%. Despite the order intake miss, Epiroc maintained its guidance that orders can accelerate into the second half of 2019 and 2020. Morgan Stanley said that it interpreted Epiroc’s overall financials as broadly in line on an underlying basis. Epiroc is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • General Electric (GE) reported negative free cash flow from industrial operations that was better than expected.  General Electric reported adjusted negative free cash flow from industrial operations of $1.22 billion, much better than the $2.9 billion negative free cash flow expected.  First quarter adjusted EPS of 14 cents beat 9 cents consensus.  General Electric said, “Power’s better-than-expected performance was principally driven by timing.”  General Electric is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas
  • Ingersoll-Rand (IR) reported first quarter earnings and revenue well above consensus.  Ingersoll-Rand said Gardner Denver will combine with Ingersoll-Rand’s industrial division.  Ingersoll-Rand first quarter EPS of 89 cents beat 80 cents expectations.  First quarter revenue of $3.58 billion beat $3.50 billion consensus.  Ingersoll-Rand provided full-year EPS to about $6.35.  Ingersoll-Rand is not rated in our Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Yes Bank Ltd. (NSEI: YESBANK) shares tanked by the most intraday on record after the lender reported an unexpected quarterly loss. Yes Bank announced that it incurred a loss of 15.07 billion rupees ($216 million) during the first quarter while analysts expected profit of 10.2 billion rupees. The unexpected quarterly loss comes shortly after the appointment of Ravneet Gill to CEO of the lender. Yes Bank is rated “Unattractive” in our India All-Cap Global Top Stock Ideas.

Global Power & Commodity Stocks Trending in the News

  • Baker Hughes (BHGE) shares slipped after the company’s first quarter revenue of $5.62 billion met the average analyst estimate of $5.62 billion. Cash flow from operations for Baker Hughs during the first quarter came in at $184 million, falling from $294 million a year prior. Baker Hughes is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Clariant AG (SWX: CLN) will move forward with the sale of its pigments business only after the company separates the business into a separate entity. According to CFO Patrick Jany, the pigments business has several legal entities across the world that make the groundwork for a sale of the unit more complex. Clariant is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Elementis (LSE: ELM) shares slid by double-digits after the company announced that it expects FY2019 results to be, “slightly,” below analyst expectations. According to UBS analyst Andrew Stott, the company’s margins are struggling against a tough backdrop of the Chinese market. Still, Stott highlighted that Elementis trades at a 35% discount to its specialty chemicals peers, which should limit downside. Elementis is not rated in our Global Top Stock Ideas.
  • Transocean (RIG) reported first quarter results better than expected.  Transocean’s first quarter loss of 30 cents per share was better than the 32 cents loss expected.  Transocean reported a backlog of $12.1 billion, down from $12.5 billion a year ago.  Contract drilling revenue of $754 missed the $763 million consensus.  First quarter rig utilization of 56% was an improvement from 52% a year ago.  Transocean is not rated in our Global Top Stock Ideas

Global Healthcare Stocks Trending in the News

  • Amgen (AMGN) reported earnings that beat expectations.  First quarter adjusted EPS of $3.56 beat consensus of $3.47.  Amgen first quarter revenue of $5.56 billion matched $5.57 billion consensus.  Amgen upped full year EPS guidance to $13.25 to $14.30, up from $13.10 to $14.30; full year revenue guidance is $22 billion to $22.9 billion.  Amgen is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Eli Lilly (LLY) reported first quarter earnings and revenue that were largely in line with consensus.  Eli Lilly first quarter EPS of $1.33 came a touch above the $1.30 expectation.  First quarter revenue of $5.09 billion was in line with $5.13 billion consensus.  Eli Lilly gave full year revenue guidance of $22 billion to $22.5 billion.  Full year EPS guidance is $5.60 to $5.70 while present consensus is $5.63.  Eli Lilly is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • PetIQ (PETQ) shares fell notably lower after short-seller Spruce Point published a note warning that, “investors should proceed with extreme caution,” in the animal health company. Spruce Point highlights that PetIQ has historically missed nearly all prior financial projections. Spruce Point sees between 75% and 90% downside with PetIQ. PetIQ is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas.
  • Pfizer (PFE) reported first quarter earnings and revenue that beat consensus.  Pfizer first quarter EPS was 85 cents while consensus was 76 cents.  Pfizer reported revenue of $13.12 billion in the first quarter, ahead of $12.99 billion consensus.  Pfizer provided full year EPS guidance of $2.83 to $2.93, up from $2.82 to $2.92; consensus is $2.89.  Pfizer 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 -2.81 basis points to 2.26%
  • US 5-Year Treasury Bonds are higher with yields down -3.5 basis points to 2.27%
  • US 10-Year Treasury Bonds are higher with yields down -2.34 basis points to 2.50%
  • The US Treasury 2s-5s Spread has narrowed 0.69 basis points to 0.01%
  • The US Treasury 2s-10s Spread has widened 0.47 basis points to 0.24%
  • US Treasury 5s-10s Spread has widened 1.16 basis points to 0.23%

Currencies

  • EUR€ is up 0.268% against the USD$ in after hours to 1.1216
  • GBP£ is up 0.773% against the USD$ in after hours to 1.3037
  • CHF is little changed 0.071% against the USD$ in after hours to 0.9814
  • JPY¥ is down 0.197% against the USD$ in after hours to 111.43

Commodities

  • WTI Crude is up 0.65% to USD$63.91/bbl with the Brent-WTI spread down USD$-0.3 to USD$7.94/bbl
  • Gold is up 0.28% to USD$1283.47/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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S&P 500 Movers

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Outperformers Sector Price 1D % Chg Volume
Seagate Technology PLC Information Technology 39.6 7.52%                815,748
General Electric Co Industrials 8.72 4.52%          32,230,776
Mohawk Industries Inc Consumer Discretionary 124 4.36%                  88,729
Fidelity National Information Services I Information Technology 105 3.94%            1,674,182
Arconic Inc Industrials 20.1 3.77%            2,198,742
 
Underformers Sector Price 1D % Chg Volume
Alphabet Inc Communication Services 1077 -7.70%            1,003,080
Baker Hughes a GE Co Energy 23 -7.51%            2,186,092
Alphabet Inc Communication Services 1087 -7.50%            2,096,727
MGM Resorts International Consumer Discretionary 27.3 -6.89%            3,595,031
Perrigo Co PLC Health Care 45.1 -6.79%                983,505
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY