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ICEBERG AHEAD? Investors bail from US stocks today like passengers on the Titanic; VIX surges over 50% in 2 days as risk-off reigns

May 07, 2019

 

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US Markets End of Day Snapshot

  • US stocks sell off broadly for a second straight day, with trade fears driving today's risk-off moves; shares closed off the lows of the day
  • The S&P 500 finished down 1.65%, Nasdaq Composite is down 1.96%, and Russell 2000 is down 2.02%
  • The VIX closed up 3.88 points today to 19.32 after closing at 15.44 yesterday, up 51% over the last 2 days
  • More strong employment data today: JOLTS Jobs Jamboree!! Most Job Openings in a Year, 2.3% Quit Rate Shows Strong Confidence in Economy 
  • Chinese negotiators have confirmed they are coming to Washington this week to continue trade negotiations as President Trump complains about a lack of progress
  • China is preparing retaliatory tariffs in the event President Trump follows through and hikes tariffs this Friday as promised
  • More on US-China: Trump Launched Tweet Barrage at China after they Changed Their Tune on Agreed-to Trade Deal
  • Check out our Top ETF Ideas of the week: Top ETF Ideas for the Week: Small-Caps Dominate While Models Find Opportunity in China
  • We launched our WARREN BUFFET FUND and CNBC.com wrote about itThese are the stocks Warren Buffett would buy if he were a quant
  • How to play Millenials growing upStocks to own as Millenials spending grows-Barron's highlights 5 stocks
  • Utilities (-0.31%), Energy (-0.62%), and Consumer Staples (-1%) stocks were the top performers in the S&P 500 today
  • Healthcare (-1.95%), Industrials (-2.04%), and Tech (-2.12%) 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 0.08x
  • 35 stocks in the S&P 500 hit 4-week highs while 66 stocks reached 4-week lows
  • 47 stocks in the S&P 500 closed overbought while 11 stocks closed oversold according to the 16-day RSI Measure
  • 178 stocks in the Nasdaq Composite hit 4-week highs while 70 stocks reached 4-week lows
  • 380 stocks in the Nasdaq Composite closed overbought while 267 stocks closed oversold according to the 16-day RSI Measure

Stocks Trending in the News

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Global Consumer Stocks Trending in the News

  • Anheuser-Busch InBev (BUD) confirmed its plans for an IPO for its Asian arm.  Anheuser-Busch InBev confirmed the plans wile reporting first quarter results that beat expectations.   Inbev is looking at plans to list the Asian arm on the Hong Kong exchange and use the proceeds to pay down some of its large debt load.  InBev did not give details of valuation but analyst estimate the unit will be valued between $40 billion and $50 billion.  Inbev has a market cap of about $130 billion in total.  Anheuser-Busch InBev is rated “Neutral” in our European Large-Cap Global Top Stock Ideas
  • Aramark (ARMK) shares slipped after the company announced adjusted earnings guidance for FY2019 that trailed previously offered guidance. Aramark expects adjusted EPS of between $2.20 and $2.30 during FY2019 compared to between $2.30 and $2.40 previously offered. Aramark’s top-line revenue of $4.00 billion during its fiscal second quarter was in line with consensus of $4.01 billion. Aramark is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Dean Foods Co. (DF) shares traded higher after CEO Ralph Sozzafava said that the firm has, “been in conversations with folks,” regarding potential strategic alternatives. CEO Sozzafava did warn, however, that, “it’s possible we won’t do anything and execute the plan we have.” Dean Foods is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Top Short” in our US Consumer Staples Global Top Stock Ideas.
  • Ferrari (RACE) reported first quarter results that beat expectations.  Ferrari first quarter adjusted ebitda was 311 million euros, ahead of 279.2 million euros consensus.  Ferrari posted first quarter revenue of 940 million euros, beating 865.9 million consensus.  First quarter EPS of 0.95 euros beat 0.83 euros consensus.  Ferrari said it will introduce 5 new models in 2019.  Ferrari is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.
  • Sony (TSE: 6758) shares rose by nearly 7% after the company announced quarterly earnings that beat the average analyst expectation. Sony generated an operating profit of 82.7 billion yen during the fiscal fourth quarter, well ahead of analyst consensus of 69.1 billion yen. Sony expects operating profit for the upcoming fiscal year of 810 billion yen, trailing consensus expectations of 843 billion yen. Sony is rated “Attractive” in our Japan Large-Cap 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) updated its film release schedule in the wake of its acquisition of 21st Century Fox entertainment assets.  The biggest change was Disney moving “Avatar 2” to 2021 from 2020; it was to be its biggest film in 2020.  Additional sequels will also be pushed back with “Avatar 5” coming out in 2027.  Disney informed that the next Star Wars episodes, after “The Rise of Skywalker” in December, will hit theaters in December 2022 and December 2024.  Walt Disney is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  

Global Information Technology Stocks Trending in the News

  • Advanced Micro Devices (AMD) said the US Department of Energy chose its chips for its next supercomputer.  Researchers at the Oak Ridge National Lab are building the supercomputer to work on artificial intelligence, weather patterns and subatomic particles.  The new machine with AMD chips will be 50 times faster than the current system when it comes online in 2021.  Advanced Micro Devices is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” 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 developer 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.
  • Electronic Arts (EA) reported profit that beat consensus.  Electronic Arts fiscal fourth quarter adjusted EPS of $1.31 beat consensus of 96 cents.  Revenue of $1.36 billion beat consensus of $1.21 billion.  Electronic Arts gave fiscal first quarter guidance of a 5 cents per share loss, much better than the 23 cents per share loss that is present consensus.  Electronic Arts Arts gave fiscal full year EPS guidance of $5.37, well above $4.51 consensus.  Electronic Arts is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  
  • Facebook (FB) COO Sheryl Sandberg spent today meeting with Senators on Capitol Hill as the company awaits news on up to a $5 billion fine from the Federal Trade Commission.  The meetings were set up a long time ago, Facebook said, and have nothing to do with the impending fine.  Sandberg is meeting with members of both parties and Congress discusses whether new privacy and data regulations.  Facebook is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” 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

  • AIG (AIG) reports first quarter adjusted earnings that beat consensus strongly.  AIG reported first quarter EPS of $1.58, well ahead of $1.05.  First quarter ROE of 11.6% is a massive improvement over 7.7% a year ago.  AIG posted net investment income of $3.9 billion, up from $3.3 billion a year ago.  Results overall came above expectations and showed a huge improvement from a year ago.  AIG is rated “Top Short” in our US Large-Cap Global Top Stock Ideas
  • 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

  • Boise Cascade (BCC) reported first quarter sales that missed consensus.  Boise Cascade first quarter sales of $1.04 billion missed $1.18 billion consensus.  First quarter ebitda of $40.7 million also missed $41.1 million consensus.  Boise said it sees slower demand growth in 2019, saying extreme weather in the first quarter plus capacity additions due to come on line soon will weigh on results.  Boise Cascade is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas
  • Fluor (FLR) was downgraded to neutral from buy at Godman Sachs.  Fluor also saw its price target cut to $28 from $44, the lowest target in the market.  Goldman Sachs cited the “unclear medium-term margin outlook” in its downgrade of Fluor.  Fluor is transitioning to a new CEO and Goldman in not sure the company can maintain its backlog.  Fluor is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas  
  • Siemens AG (DB: SIE) announced intentions to carve out and list its flagging gas and power division and plans to cut more than 10,000 jobs across the German giant. Siemens aims to spin-off its energy unit into a separately managed entity by September 2020. Siemens will maintain a less than 50% stake in the new entity. Siemens is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.

Global Commodities & Energy Stocks Trending in the News

  • Anadarko Petroleum (APC) said on Monday that the offer from Occidental Petroleum (OXY) is superior to that it received from  Chevron (CVX).  Anadarko said it informed Chevron that the $33 billion deal it agreed to is terminated.  Chevron now has 4 business days to make a counteroffer and if it does not make one, Anadarko will owe Chevron a $1 billion breakup fee.  Occidental said it was pleased Anadarko has accepted its offer.  Occidental removed the need for a shareholder vote and was said to be key to moving forward.  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.
  • Mosaic (MOS) shares fell notably lower after the Minnesota-based company said it expects normal demand for US fertilizer during the Spring despite a flooded and wet start to the season. Mosaic also warned investors that its earnings during the second quarter could be adversely impacted by currency fluctuations and Southeast Asian demand. Mosaic will incur up to $100 million in costs during the second quarter as the fertilizer company addresses tailings dam regulatory changes. Mosaic is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Vale (VALE) suffered another production setback when a court ruled its massive Brucutu mine must stop production.  Brucutu produced 30 million tons of iron ore and was recently reopened only to have a court halt operations again.   Vale said with the disruption, annual production should be at the low end of its 307 to 332 million tons of guidance.  Vale is rated “Attractive” in our Brazil All-Cap Global Top Stock Ideas 

Global Healthcare Stocks Trending in the News

  • Allergan (AGN) reported Botox sales above consensus while upping full year EPS guidance.  Allergan reported Botox sales of $868 million, beating $761 million consensus.  First quarter EPS of $3.79 beat $3.55 consensus while revenue of $3.6 billion beat $3.56 billion consensus.  Allergan gave full year 2019 EPS guidance of $16.55 to $16.75, ahead of $16.43 consensus and full year revenue guidance of $15.1 billion to $15.4 billion, a hike from $15 billion to $15.3 billion.  Allergan is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Mylan NV (MYL) shares slid to their lowest levels since 2012 after the generic drug manufacturer disappointed investors looking for an updated turnaround plan for the second quarter in a row. Although Mylan’s board of directors explained that it will create a special committee to examine, “a wide range of alternatives to unlock the true value,” it was not enough to appease anxious investors. Mylan is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Regeneron Pharmaceuticals (REGN) reported a huge miss with first quarter adjusted earnings.  Regeneron reported first quarter adjusted EPS of $4.45 while consensus was $5.71.  Revenue of $1.71 billion trailed $1.79 billion consensus.  Regeneron’s CEO said the company will continue to invest in a broad immune-oncology portfolio.  Regeneron Pharmaceuticals is rated “Top Buy” 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 -0.6 basis points to 2.28%
  • US 5-Year Treasury Bonds are higher with yields down -0.5 basis points to 2.25%
  • US 10-Year Treasury Bonds are higher with yields down -1.44 basis points to 2.45%
  • The US Treasury 2s-5s Spread has widened 0.1 basis points to -0.03%
  • The US Treasury 2s-10s Spread has narrowed 0.84 basis points to 0.17%
  • US Treasury 5s-10s Spread has narrowed 0.94 basis points to 0.2%

Currencies

  • EUR€ is little changed 0.063% against the USD$ in after hours to 1.1192
  • GBP£ is down 0.176% against the USD$ in after hours to 1.3074
  • CHF is down 0.173% against the USD$ in after hours to 0.9808
  • JPY¥ is down 0.406% against the USD$ in after hours to 110.31

Commodities

  • WTI Crude is down -1.37% to USD$61.4/bbl with the Brent-WTI spread down USD$-0.27 to USD$8.68/bbl
  • Gold is up 0.26% to USD$1284.37/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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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

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Outperformers Sector Price 1D % Chg Volume
American International Group Inc Financials 42.5 6.77%            1,834,212
Henry Schein Inc Health Care 81.1 5.42%                605,947
Everest Re Group Ltd Financials 216 3.83%                  33,360
FMC Corp Materials 79.1 2.96%                482,913
Newmont Mining Corp Materials 31 2.61%            5,086,208
 
Underformers Sector Price 1D % Chg Volume
Mylan NV Health Care 29.3 -23.81%            5,183,515
Mosaic Co/The Materials 31.4 -7.99%                885,005
Regeneron Pharmaceuticals Inc Health Care 405 -6.34%                620,290
Brighthouse Financial Inc Financials 34.2 -6.23%                656,209
KLA-Tencor Corp Information Technology 92.6 -6.14%            1,416,253
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY