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The Bleeding has stopped, for now: US stocks little changed midday, trade outlook remains murky; T-minus 36 hours until tariffs return

May 08, 2019

 

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Market data as of 12:15pm EST

US Market Snapshot

  • US stocks have stabilized and are flat with optimistic comments from President Trump on chances for a trade deal as Friday's deadline for a tariff hike looms
  • The S&P 500 is currently up 0.2%, Nasdaq Composite is up 0.33%, and Russell 2000 is down 0.07%
  • The VIX continues rising and is currently at 19.44, up from yesterday's close of 19.32, read more: Run Forrest, Run! Investors Flee Risk Assets This Week as VIX spikes over 60%
  • President Trump expressed optimism on chances for a trade deal as Chinese negotiators have confirmed they are coming for trade talks Thursday and Friday
  • Chinese exports unexpectedly fell 2.7%  while they were expected to rise 3%; imports unexpectedly grew 4% while a drop was expected
  • The weak Chinese export data may be driving China to come for more talks this week despite President Trump's barrage of complaining tweets
  • More on US-China: Trump Launched Tweet Barrage at China after they Changed Their Tune on Agreed-to Trade Deal
  • Check out these TOP CHINA STOCKSLook East and Feast: Top Chinese Stocks to fill your plate (and portfolio) with NOW! 
  • JP Morgan (JPM) CEO Jamie Dimon said interest rates are "extraordinarily low" and added, "4 percent when you are having fairly good growth is not a bad number." 
  • German Industrial Production fell less than expected, growing just 0.5% in March while consensus was for a 0.5% fall
  • SPDR S&P 500 ETF Trust (SPY) May 8 OTM Calls & Puts and June 21 OTM Calls & Puts, Financial Select Sector SPDR Fund (XLF) June 21 OTM Puts and iShares China Large-Cap ETF (FXI) May 17 OTM Puts are the most actively traded options contracts in US pre-market trading this morning
  • Wells Fargo strategists are out arguing that yesterday’s sell-off forced volatility-targeting strategies to decrease their exposure to US stocks from 44% to 41%.  This translates to a reduction of USD$10 billion in portfolio value. 
  • Real Estate (+0.42%), Consumer Discretionary (+0.23%), and Industrials (+0.2%) stocks are the top performers in the S&P 500 today
  • Materials (-0.16%), Telecom (-0.21%), and Utilities (-1.09%) stocks are the worst performers in the S&P 500 today
  • Investor sentiment for US stocks is neutral with the advance/decline ratio for the S&P 500 currently at 1.02x
  • 17 stocks in the S&P500 are at 4-week highs while 123 stocks are at 4-week lows
  • 18 stocks in the S&P 500 are overbought while 20 stocks are oversold according to the 16-day RSI Measure
  • 107 stocks in the Nasdaq Composite are at 4-week highs while 95 stocks are at 4-week lows
  • 204 stocks in the Nasdaq Composite are overbought while 381 stocks are oversold according to the 16-day RSI Measure

Stocks Trending in the News

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Global Consumer Stocks Trending in the News

  • Coty (COTY) reported net revenue that missed consensus.  Coty fiscal third quarter net revenue of $1.99 billion trailed $2.06 billion.  Fiscal third quarter adjusted EPS of 13 cents came a touch ahead of 12 cents consensus.  Coty reaffirmed guidance for fiscal 2019 of adjusted operating income moderately below fiscal 2018.  Coty is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Imperial Brands Plc (LSE: IMB) shares slipped to a 5-year low after the tobacco company reported a slowdown in US vape sales and weaker-than-expected revenue during the first half of FY2019. In order for Imperial Brands to meet is FY2019 sales guidance, the company’s revenue growth would need to double from its first half pace. Imperial Brands’ US vaping business has suffered as it continues to lose market share to vaping upstart Juul. Imperial Brands is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Office Depot (ODP) reported full year adjusted ebitda that beat consensus.  Office Depot sees full year adjusted ebitda of $525 million to $550 million while consensus is $525 million.  Full year sales are expected to be between $10.8 billion and $10.9 billion.  Office Depot reported first quarter adjusted EPS of 7 cents, beating 6 cents consensus.  Office Depot is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • The Wendy’s Company (WEN) shares moved higher after the company published strong-than-expect profit during the first quarter. Wendy’s observed earnings of $0.14/share during the first quarter, up 27% y/y and beat analyst consensus that called for $0.12/share. The profit beat published by Wendy’s was aided by 3% growth in the company’s North American sales that offset a slowdown from in international sales from 13.7% a year prior to 10.1%. Wendy’s is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Toyota Motor Corp. (TSE: 7203) and Honda Motor Co. (TSE: 7267) became the latest in a string of auto manufacturers to warn investors of weaker profit and sales. Both companies in their warnings cited that the trade war between the US and China threatens already-waning demand for their products. Despite the profit warning, Toyota announced plans to buy back up to 300 billion yen worth of common shares. Toyota is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas. Honda Motor is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas. 

Global Information Technology Stocks Trending in the News

  • 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.
  • MoneyGram International Inc. (MGI) shares fell by more than 25% after the company announced an unexpected loss in the first quarter. MoneyGram generated a loss per share of $0.06 during the first quarter that fell notably short of consensus that called for earnings of $0.15/share. MoneyGram’s revenue of $315.4 million also trailed analyst expectations of $380.0 million. MoneyGram is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.
  • New York Times (NYT) reported adjusted earnings that beat consensus.  NY Times first quarter adjusted EPS of 20 cents beat consensus of 9 cents.  Revenue in the quarter was $439 million, in line with $436 million consensus.  NY Times saw 2323,000 net new digital subscribers, with a total of 4.5 million subscribers.  NY Times is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. 
  • Oracle (ORCL) is alleging that Amazon (AMZN) offered 2 Department of Defense employees jobs while they were working on the $10 billion cloud contract, these allegations are included in its lawsuit.  Oracle says these employees designed the project to be favorable to Amazon’s chances of winning the contract and later were offered a lucrative employment and bonus package.  Oracle has since been eliminated from the competition the winner of which is expected to be announced in July.  Oracle is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology 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.  
  • Softbank (TSE:9984) stands to reap a huge windfall in the wake of Uber’s IPO due this week.  Softbank could see up to a $3 billion gain in just a matter of 16 months, WSJ highlights.  Softbank bought 15% of Uber for $7.7 billion in early 2018 with its Vision Fund when Uber was valued at $48 billion, it is expected to seek a valuation between $80 billion and $90 billion in its IPO.  This would be Softbank’s Vision Fund’s biggest gain yet.  Softbank is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas
  • TripAdvisor (TRIP) shares tumbled by double-digits after the company’s first quarter revenue trailed analyst expectations. TripAdvisor’s revenue of $376.00 million missed consensus of $387.3 million, representing weakness in its hotels and auction businesses. TripAdvisor’s adjusted EPS of $0.36 during the first quarter still managed to beat analyst consensus of $0.31. TripAdvisor is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology 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.  
  • Wirecard AG (XTRA: WDI) shares traded higher after the company upped its earnings guidance for FY2019. The hike in FY2019 ebit guidance from between 740 million euros and 800 million euros to between 760 million euros and 810 million euros comes after Wirecard announced stronger-than-expected profit in the first quarter, driven by higher transaction volume. Wirecard is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Zayo Group Holdings (ZAYO) shares soared after the owner of fiber networks announced that it’s agreed to be acquired by Digital Colony Partners and EQT Partners. The deal to acquire Zayo Group would take the company private and values it at more than $8 billion. Digital Colony Partners and EQT Partners will pay $35/share while taking on $5.9 billion of debt to execute the acquisition. Zayo Group Holdings is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Lyft (LYFT) reported a 95% growth in revenue when it reported its first quarterly results.  Lyft reported $776 million in revenue in the first quarter of the year, a 95% hike that was greater than many analysts expected.  Lyft posted a $1.1 billion loss due to heavy stock-based compensation.  Its adjusted loss was $211.5 million, much better than the $274 million loss expected.  Lyft also announced an expanded partnership with Alphabet’s (GOOGL) Google unit Waymo to work more closely on self-driving cars.  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.  

Global Commodities & Energy Stocks Trending in the News

  • Marathon Petroleum (MPC) said its MPLX LP is buying Andeavor Logistics in a $9 billion deal.  Marathon Petroleum also said it is not going ahead with the expansion of the Garyville Coker 3 project.  Marathon report a 1 cent per share loss in the first quarter.  Revenue of $28.82 billion trailed $29.5 billion consensus.  First quarter refinery utilization as at 95%, up from 93% a year ago.  Marathon Petroleum is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas
  • Vale (VALE) reported a steep drop in iron ore production in the first quarter.  Vale saw iron ore production drop to 72.9 million tons from 82 million tons a year ago.  The drop reflects the sharp curtailing of production in the wake of its tailings dam disaster.  Vale removed 93 million ton of annual production to focus on safety, most of which has not fully returned.  Vale is rate “Attractive” in our Brazil All-Cap Global Top Stock Ideas.
  • Weatherford (WFT) shares plunged by more than 20% after the oilfield service company delayed the release of its quarterly earnings until May 10th. According to Bloomberg Intelligence analysts Spencer Cutter and Leon Huang, the delay, “may be driven by negotiations with lenders to extend the maturity date of $543 million of credit-line commitments that expire this summer.” Weatherford is not rated in our Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • Inogen (INGN) lost more than a quarter of its total market value after the company forecasted FY2019 revenue below the lowest analyst estimate. Inogen told investors that it now expects revenue of between $405 million and $415 million in FY2019, down from previously offered guidance of between $430 million and $440 million. The missed revenue guidance comes just 3 months after Muddy Waters issued a new short report on Inogen, citing in the report that sales were likely nearing a peak. Inogen 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 -0.2 basis points to 2.28%
  • US 5-Year Treasury Bonds are lower with yields up 0.83 basis points to 2.26%
  • US 10-Year Treasury Bonds are lower with yields up 0.18 basis points to 2.45%
  • The US Treasury 2s-5s Spread has widened 1.03 basis points to -0.02%
  • The US Treasury 2s-10s Spread has widened 0.38 basis points to 0.18%
  • US Treasury 5s-10s Spread has narrowed 0.65 basis points to 0.19%

Currencies

  • EUR€ is currently little changed against the USD$ at 1.1186
  • GBP£ is currently down 0.581% against the USD$ to 1.2999
  • CHF is currently little changed against the USD$ at 0.981
  • JPY¥ is currently little changed against the USD$ at 110.16

Commodities

  • WTI Crude is currently up 0.78% to USD$61.88/bbl with the Brent-WTI spread little changed USD$-0.25 to USD$8.76/bbl
  • Gold is currently down -0.3% to USD$1280.63/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
Diamondback Energy Inc Energy 105 9.33%                541,829
Qorvo Inc Information Technology 61.6 6.09%                844,000
FleetCor Technologies Inc Information Technology 191 5.53%                  61,191
Concho Resources Inc Energy 122 4.26%                  91,536
McKesson Corp Health Care 123 3.92%                206,788
 
Underperformers Sector Price 1D % Chg Volume
TripAdvisor Inc Communication Services 56.6 -12.63%            1,857,187
DaVita Inc Health Care 56.7 -7.31%                295,616
NRG Energy Inc Utilities 40.4 -5.85%                650,384
Marathon Petroleum Corp Energy 64.4 -5.84%            1,092,724
Coty Inc Consumer Staples 7.31 -5.06%            2,351,147
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