blog

Latest from the Quantamize Blog

Back but Still Spooked...US stocks pare steep losses after China confirms trade talks; VIX surges 20% amid risk-off

May 06, 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 opened lower and then rallied, paring losses, after China confirmed trade talks this week, calming trade concerns-for now
  • The S&P 500 finished down 0.45%, Nasdaq Composite is down 0.5%, and Russell 2000 up 0.06%
  • The VIX surged 20% to 15.44 after closing at 12.87 last week
  • 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
  • China confirmed it is coming for talks in Washington that will occur this week
  • More on US-China: Trump Launched Tweet Barrage at China after they Changed Their Tune on Agreed-to Trade Deal
  • 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
  • We launched our WARREN BUFFET FUND and CNBC.com wrote about itThese are the stocks Warren Buffett would buy if he were a quant
  • The very best US LARGE-CAPsMay's Plays: These US LARGE-CAP TOP PICKS are what your portfolio needs NOW!
  • Healthcare (+0.58%), Energy (-0.07%), and Consumer Staples (-0.16%) stocks were the top performers in the S&P 500 today
  • Tech (-0.82%), Industrials (-0.97%), and Materials (-1.38%) stocks were the worst performers in the S&P 500 today
  • Investor sentiment for US stocks finished negative with the advance/decline ratio for the S&P 500 closing at 0.39x
  • 81 stocks in the S&P 500 hit 4-week highs while 24 stocks reached 4-week lows
  • 58 stocks in the S&P 500 closed overbought while 9 stocks closed oversold according to the 16-day RSI Measure
  • 186 stocks in the Nasdaq Composite hit 4-week highs while 75 stocks reached 4-week lows
  • 494 stocks in the Nasdaq Composite closed overbought while 190 stocks closed 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.
  • Brunswick (BC) announced today it is selling its fitness busy to a private equity firm.  Brunswick will sell its fitness for about $490 million in an all-cash transaction.  Upon completion, Brunswick will be left with just its marine portfolio with market-leading positions in marine propulsion, parts, accessories and services.  Brunswick is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary 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.
  • Starbucks (SBUX) got a bit of free publicity when one of its cups appeared in a scene of Games of Thrones in its most recent episode.  There was a disposable cut with a Starbucks logo on it sitting on a table in front of the character Mother of Dragons, a clear oversight.  Fans of the show were quick to spot the cup and lit up social media with comments shortly thereafter.  Starbucks was very happy with the exposure.  Starbucks 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
  • 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.  
  • Marvell technology (MRVL) agreed to acquire Aquantia (AQ) in a $452 million deal.  Marvell agreed to pay $13.25 per share for Aquantia in cash for all outstanding shares.  Marvell said the deal will immediately be accretive to earnings and will generate run-rate synergies of $40 million annually after 12 months.  The deal is expected to close by the end of 2019.  Aquantia is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.  

Global Financial Stocks Trending in the News

  • Banco Bradesco (BBD), Brazil’s second largest bank, is acquiring Florida-based BAC Florida Bank in a $500 million deal.  The deal will give Bradesco access to 13,000 private banking clients.  Bradesco has never had this size present outside of Brazil.  BAC Florida has $862 million in assets under custody.  Banco Bradesco is rated “Unattractive” in our Brazil All-Cap 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.
Actionable and Transparent Quantitative ResearchActionable and Transparent Quantitative Research
Actionable and Transparent Quantitative ResearchActionable and Transparent Quantitative Research

US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -2.84 basis points to 2.30%
  • US 5-Year Treasury Bonds are higher with yields down -3.17 basis points to 2.29%
  • US 10-Year Treasury Bonds are higher with yields down -2.88 basis points to 2.49%
  • The US Treasury 2s-5s Spread has narrowed 0.33 basis points to -0.01%
  • The US Treasury 2s-10s Spread has narrowed 0.03 basis points to 0.19%
  • US Treasury 5s-10s Spread has widened 0.29 basis points to 0.2%

Currencies

  • EUR€ is little changed 0.027% against the USD$ in after hours to 1.1201
  • GBP£ is down 0.577% against the USD$ in after hours to 1.3097
  • CHF is little changed 0.122% against the USD$ in after hours to 0.9825
  • JPY¥ is down 0.207% against the USD$ in after hours to 110.87

Commodities

  • WTI Crude is up 0.5% to USD$62.25/bbl with the Brent-WTI spread up USD$0.45 to USD$9.65/bbl
  • Gold is little changed 0.1% to USD$1280.39/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

 

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
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

On Mobile/Tablet scroll to the right.

Outperformers Sector Price 1D % Chg Volume
Centene Corp Health Care 125 6.56%            3,135,364
Coty Inc Consumer Staples 7.31 5.75%            6,564,084
Cigna Corp Health Care 196 3.91%                582,033
Anadarko Petroleum Corp Energy 47.5 3.81%            3,032,347
UnitedHealth Group Inc Health Care 256 3.69%            1,751,454
 
Underformers Sector Price 1D % Chg Volume
Affiliated Managers Group Inc Financials 104 -11.61%                159,223
IPG Photonics Corp Information Technology 126 -5.82%                107,645
Stanley Black & Decker Inc Industrials 129 -4.35%                148,038
Fastenal Co Industrials 54.5 -4.11%                420,943
Wynn Resorts Ltd Consumer Discretionary 108 -4.07%                455,515
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY