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Like Yin & Yang, stocks tumble as VIX surges most this year; risk-off driven by renewed trade war fears

May 06, 2019

 

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Market data as of 12 noon EST

US Market Snapshot

  • US stocks are lower midday while the VIX is surging the most this year as investors fear the US-China trade war may heat back up
  • The S&P 500 is currently down 0.91%, Nasdaq Composite is down 1.06%, and Russell 2000 is down 0.31%
  • The VIX is currently up 3.56 at 16.43 from last week's close of 12.87
  • President Trump tweeted yesterday that he may hike tariffis to 25% this Friday on $325 billion of Chinese exports given what he sees as a lack of progress in talks
  • The tweets were in response to last minute changes from China, when they said they could not agree to change Chinese law as part of the deal, something previously agreed to
  • China seems to have been caught off guard-it plans to bring 100+ people in its delegation this week in Washington, a sign it believes a deal can be reached-or perhaps thought, until the tweets
  • It is not clear if trade talks in Washington will occur this week
  • This week our Data Daily is focused on China: Macro Monday: Comparing Key Data Points of the Chinese Economy
  • How to play Millenials growing upStocks to own as Millenials spending grows-Barron's highlights 5 stocks
  • Most global markets are lower this morning on reborn trade fears
  • We launched our WARREN BUFFET FUND and CNBC.com wrote about itThese are the stocks Warren Buffett would buy if he were a quant
  • Euro-area Composite PMI came at 51.5 fro April, another positive data point following those from last week, leading analysts to say the Euro economy could be bottoming out
  • The very best US LARGE-CAPsMay's Plays: These US LARGE-CAP TOP PICKS are what your portfolio needs NOW!
  • Energy (-0.05%), Consumer Staples (-0.55%), and Real Estate (-0.58%) stocks are the top performers in the S&P 500 today
  • Industrials (-1.28%), Tech (-1.42%), and Materials (-1.5%) stocks are the worst performers in the S&P 500 today
  • Investor sentiment for US stocks is negative with the advance/decline ratio for the S&P 500 currently at 0.12x
  • 81 stocks in the S&P500 are at 4-week highs while 24 stocks are at 4-week lows
  • 58 stocks in the S&P 500 are overbought while 9 stocks are oversold according to the 16-day RSI Measure
  • 186 stocks in the Nasdaq Composite are at 4-week highs while 75 stocks are at 4-week lows
  • 494 stocks in the Nasdaq Composite are overbought while 190 stocks are oversold according to the 16-day RSI Measure

Stocks Trending in the News

Click name for Q-Factor rating and financials data.

Global Consumer Stocks Trending in the News

  • Berkshire Hathaway (BRK) had its annual meeting this year and CEO Warren Buffett found himself on the defensive.  Berkshire Hathaway has trailed the S&P 500 for 10 years, a stretch that has never happened before.   Buffett is a big supporter if index investing and many were wondering if it might be better to buy an index fund as opposed to Berkshire Hathaway given the underperformance.  Buffett assured investors they should stick with him, assuring investors that performance will return.  Berkshire Hathaway is not rated in our Global Top Stock Ideas.
  • Chesapeake Lodging Trust (CHSP) will be acquired by Park Hotels & Resorts (PK) in a $2.7 billion cash and stock deal.  Park Hotels is paying a combined $31 per share for Chesapeake, an 8% premium to Friday’s close.   The deal will make Park Hotels the second largest lodging investment trust in the market.  Chesapeake will sell 5 hotels before the deal complete, leaving the new company with 66 hotels in 17 states.  Chesapeake Holdings is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  Park Hotels & Resorts is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas
  • Hudson Bay Co. (TSX:HBC) said it is exploring options for its struggling Lord & Taylor chain.  Options could include a sale of the chain as Hudson Bay focuses on its more successful chains.  Hudson Bay’s CEO said, “everything is on the table” in relation to options for Lord & Taylor.  Hudson Bay has already closed a number of Lord & Taylor stores including its flagship store in Mnahattan.  Hudson Bay is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas
  • Kraft Heinz (KHC) said it will need to restate its financial results for 2016, 2017 and 2018 after finding employee misconduct in the procurement process.  The misconduct caused the cost of goods to be inflated.  Kraft Heinz said the restatements will results in adjustments of less than 2%.  Kraft Heinz said its investigation is complete and there was no evidence that senior managers were involved.  Kraft Heinz is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas
  • Shake Shack (SHAK) reported sales growth that beat expectations and upped guidance.  Shake Shack first quarter same store sales grew 3.6%, well ahead of the 0.8% growth expected.  Revenue of $132 million beat $127 million expected.  Second quarter revenue guidance was hiked to $576 million to $582 million, up from $570 million.  Shake Shack is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Sysco (SYY) reported fiscal third quarter adjusted earnings that beat consensus.  Sysco reported fiscal third quarter adjusted EPS of 79 cents, beatings consensus of 70 cents.  Fiscal third quarter revenue of $14.7 billion trailed $14.77 billion.  Sysco is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas
  • Tesla Inc. (TSLA) shares traded higher after the company announced plans to raise roughly $2 billion of capital through debt and stock offerings. Tesla filed on Thursday to sell $1.35 billion in convertible debt notes and $650 million in equity shares. Dan Ives of Wedbush Securities explained that, “We view this as a clear net positive for Tesla.” Tesla is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Tyson Foods (TSN) said today that it will introduce meatless protein product through 2019 as it looks to take on Beyond Meat (BYND).  Tyson held 6.5% of Beyond Meat and unloaded the shares just before its IPO last week, missing out on the 163% run up in its first day of trading.  Tyson will introduce its meatless products on a limited basis mid-2019 with a more complete rollout later in the year.  Tyson Foods is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.  Beyond Meat is not yet rated in our Global Top Stock Ideas.
  • Walt Disney (DIS) saw another strong weekend for its latest Avengers movie, “Averngers: Endgame.”  Disney saw total ticket sales pass the $2 billion mark, the first for a film in such a short amount of time.  It took just 11 days to hit that mark.  The last film to hit that mark took 47 days, it was “Avatar.”  This is the fifth movie to surpass $2 billion is ticket sales.  Walt Disney is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  

Global Information Technology and Communication Services Stocks Trending in the News

  • Activision Blizzard (ATVI) delivered first quarter earnings that beat expectations.  Activision Blizzard posted first quarter adjusted EPS of 31 cents versus 26 cents expected.  Adjusted revenue of $1.26 billion slightly beat consensus of $1.23 billion.  Activision Blizzard gave EPS guidance for the second quarter of 23 cents well below consensus of 37 cents.  Full year EPS guidance given was ~$2.10, below consensus of $2.19.  Activision Blizzard is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Alphabet’s (GOOGL) Google may introduce tools to limit tracking cookies, WSJ is reporting.  Google may introduce the tools for its Chrome browser at its developers conference next week.  The tools will limit cookies from third-party profit-seeking companies.  Importantly, the tools are not expected to hinder Google’s ability to collect user data.  Alphabet is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Apple (AAPL) is preparing for its development conference, the Worldwide Developers Conference, that is in about a month.  Apple is set launch a number of new apps and software development tools.  Bloomberg highlights today the difficult line Apple has to walk between needing developers support and competing with them in the market.  Apple is expected to launch upgrade to core apps for the iPhone, new apps for the Apple Watch  and the iPad.  Apple is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.  

Global Industrials Stocks Trending in the News

  • Boeing (BA) limited the role of its own pilots in the final stages of approval for the 737 Max, according to the WSJ.  Boeing’s pilots were not aware of key functioning of the MCAS system implicated in its 2 crashes.  The lack of involvement by Boeing’s own pilots in the final stages is raising eyebrows and sure to gain more scrutiny from regulators.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas

Global Commodities & Energy Stocks Trending in the News

  • Occidental Petroleum (OXY) increased the cash portion of its bid for Anadarko Petroleum (APC) to 78% from 50% as it seeks to sweeten its offer.   Occidental Petroleum is looking to break up the deal Anadarko agreed to with Chevron (CVX).  Occidental said agreed to pay the $1 billion break-up fee that Anadarko will have to pay if it breaks off its deal with Chevron.  Anadarko said it will review the revised offer, but it reaffirmed its recommendation to shareholders to accept the Chevron offer. Anadarko Petroleum is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.  Occidental Petroleum is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Chevron is rated “Neutral” 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 -3.85 basis points to 2.29%
  • US 5-Year Treasury Bonds are higher with yields down -4.68 basis points to 2.27%
  • US 10-Year Treasury Bonds are higher with yields down -4.32 basis points to 2.48%
  • The US Treasury 2s-5s Spread has narrowed 0.83 basis points to -0.02%
  • The US Treasury 2s-10s Spread has narrowed 0.47 basis points to 0.19%
  • US Treasury 5s-10s Spread has widened 0.36 basis points to 0.21%

Currencies

  • EUR€ is currently little changed against the USD$ at 1.1199
  • GBP£ is currently down 0.6% against the USD$ to 1.3094
  • CHF is currently little changed against the USD$ at 0.9824
  • JPY¥ is currently down 0.216% against the USD$ to 110.86

Commodities

  • WTI Crude is currently down -0.44% to USD$61.67/bbl with the Brent-WTI spread little changed USD$0.13 to USD$9.33/bbl
  • Gold is currently little changed 0.14% to USD$1280.9/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
Coty Inc Consumer Staples 7.31 4.49%            2,026,694
Anadarko Petroleum Corp Energy 47.5 3.71%            1,642,059
Sysco Corp Consumer Staples 62.8 2.67%                358,224
Tyson Foods Inc Consumer Staples 58.6 2.62%                291,680
CME Group Inc Financials 182 2.16%                258,131
 
Underperformers Sector Price 1D % Chg Volume
Affiliated Managers Group Inc Financials 104 -11.38%                159,223
IPG Photonics Corp Information Technology 126 -4.99%                107,643
Stanley Black & Decker Inc Industrials 129 -4.85%                148,038
Fastenal Co Industrials 54.5 -4.67%                420,943
Wynn Resorts Ltd Consumer Discretionary 108 -4.58%                455,456
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