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Hump Day Slump Day: More Risk-Off for US stocks as investors await next Trump tweet; trade fears dominate

May 08, 2019

 

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US Markets End of Day Snapshot

  • US stocks slump for the third day, despite trying to rally midday, which did not hold; trade fears are driving risk-off 
  • The S&P 500 finished down 0.16%, Nasdaq Composite is down 0.26%, and Russell 2000 is down 0.46%
  • The VIX has spiked over the past 2 days, read more: Run Forrest, Run! Investors Flee Risk Assets This Week as VIX spikes over 60%
  • The VIX closed up 0.08 points today to 19.40 after closing at 19.32 yesterday; it closed at 12.86 Friday
  • Is there a savior for the market? Bulls Cling to One Last Hope, THESE Investors May Save the Stock Rally!
  • 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! 
  • These are our TOP TECH STOCKS: TOTALLY TOP TECH! These are the BEST US Tech stocks you need in your portfolio 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." 
  • 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. 
  • Healthcare (+0.12%), Real Estate (+0.05%), and Industrials (+0.01%) stocks were the top performers in the S&P 500 today
  • Financials (-0.29%), Telecom (-0.36%), and Utilities (-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 0.8x
  • 17 stocks in the S&P 500 hit 4-week highs while 123 stocks reached 4-week lows
  • 18 stocks in the S&P 500 closed overbought while 20 stocks closed oversold according to the 16-day RSI Measure
  • 107 stocks in the Nasdaq Composite hit 4-week highs while 95 stocks reached 4-week lows
  • 204 stocks in the Nasdaq Composite closed overbought while 381 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

  • 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.
  • Intel (INTC) provided updated guidance to investors that was not well received.  Intel said it expects revenue growth in the low single digits over the next 3 years.  Intel expects EPS to grow in line with revenue during the same period.  Intel expects its PC revenue to be flat or fall while data centric revenue will grow in the high single digits.  Intel is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” 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) reported fiscal second quarter adjusted earnings and revenue that beat consensus.  Disney first quarter adjusted EPS of $1.61 beat consensus of $1.58.  Fiscal second quarter revenue of $14.92 billion beat $14.54 billion expectations.  Disney saw media networks operating income grow to $2.19 billion from $1.3 billion q/q.  Disney CEO Robert Iger said he was “very pleased” with fiscal second quarter results.  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.
  • Wendy’s (WEN) reported first quarter adjusted earnings that beat consensus.  Wendy’s first quarter adjusted EPS of 14 cents beat consensus of 12 cents.  First quarter revenue of $408.6 million beat consensus of $398.9 million.  Wendy’s reported same store sales of 1.3%, a touch below consensus of 1.4%.  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.  
  • 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

  • Exelon (EXC) confirmed it is moving forward with closing the Three Mile Island nuclear power plant in Pennsylvania.  Exelon is making the move given that a bill to provide subsidies to keep them open has not moved forward in Pennsylvania’s legislature.  Exelon confirmed previously announced plans.  The plant will be closed by September 30th of this year.  Exelon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • 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 reports 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 lower with yields up 1.43 basis points to 2.29%
  • US 5-Year Treasury Bonds are lower with yields up 2.84 basis points to 2.28%
  • US 10-Year Treasury Bonds are lower with yields up 2.51 basis points to 2.48%
  • The US Treasury 2s-5s Spread has widened 1.41 basis points to -0.01%
  • The US Treasury 2s-10s Spread has widened 1.08 basis points to 0.18%
  • US Treasury 5s-10s Spread has narrowed 0.33 basis points to 0.2%

Currencies

  • EUR€ is little changed 0.009% against the USD$ in after hours to 1.119
  • GBP£ is down 0.497% against the USD$ in after hours to 1.301
  • CHF is little changed 0.102% against the USD$ in after hours to 0.9799
  • JPY¥ is little changed 0.127% against the USD$ in after hours to 110.12

Commodities

  • WTI Crude is up 1.17% to USD$62.12/bbl with the Brent-WTI spread down USD$-0.67 to USD$8.5/bbl
  • Gold is down -0.3% to USD$1280.57/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
Diamondback Energy Inc Energy 105 7.76%                543,029
FleetCor Technologies Inc Information Technology 191 7.05%                186,482
McKesson Corp Health Care 123 4.79%                591,446
Pioneer Natural Resources Co Energy 143 3.92%                546,675
Concho Resources Inc Energy 122 3.73%                456,198
 
Underformers Sector Price 1D % Chg Volume
TripAdvisor Inc Communication Services 56.6 -11.41%            1,857,187
DaVita Inc Health Care 56.7 -8.55%                295,716
Marathon Petroleum Corp Energy 64.4 -7.07%            2,997,457
Coty Inc Consumer Staples 7.31 -5.47%            6,024,403
NRG Energy Inc Utilities 40.4 -4.37%            1,808,862
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY