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What trade tension? US stocks rally for third straight day on strong earnings and housing starts

May 16, 2019

 

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US Markets End of Day Snapshot

  • US stocks post a third day of gains in the wake of strong earnings and housing starts that came better than expected
  • The S&P 500 finished up 0.89%, Nasdaq Composite up 0.97%, and Russell 2000 up 0.58%
  • Buidling permits grew 0.6% in April, beating consensus of  0.1%
  • Check out Quantamize on CNBC discussing why we love ALPHABET (GOOGL): click here for video
  • Buybacks for everyone: No Stoppin' It Now! S&P 500 Stock Buybacks Continue at Rapid Pace
  • The US has agreed to delay tariffs on EU and Japanese auto imports for 6 months to try and close a deal
  • The US said it is close to finalizing an update of NAFTA (now USMCA) with Canada and Mexico
  • The US continues to focus its trade fire on China as the market awaits word on more tariffs on Chinese imports
  • Initial jobless claims for the week ending May 11th were 212,000 below consensus of 220,000
  • Options trading: Day Traders are Back! Options Trading is Increasingly their Weapon of Choice
  • Interest rate cuts: Multiple Fed Funds Cuts Coming in 2019? Futures Say Yes, But...
  • Top Low Vol Stocks: TOP LOW VOLATILITY STOCKS for what has lately felt like a high volatility market
  • Materials (+1.34%), Financials (+1.1%), and Consumer Discretionary (+1%) stocks were the top performers in the S&P 500 today
  • Utilities (+0.58%), Real Estate (+0.53%), and Energy (+0.38%) stocks were the worst performers in the S&P 500 today
  • Investor sentiment for US stocks finished positive with the advance/decline ratio for the S&P 500 closing at 4.05x
  • 44 stocks in the S&P 500 hit 4-week highs while 93 stocks reached 4-week lows
  • 14 stocks in the S&P 500 closed overbought while 37 stocks closed oversold according to the 16-day RSI Measure
  • 83 stocks in the Nasdaq Composite hit 4-week highs while 164 stocks reached 4-week lows
  • 184 stocks in the Nasdaq Composite closed overbought while 393 stocks closed oversold according to the 16-day RSI Measure
  • The VIX closed up 1.92 points today to 18.36 after closing at 16.44 yesterday
     

Stocks Trending in the News

Click name for Q-Factor rating and financials data.

Global Consumer Stocks Trending in the News

  • Beyond Meat (BYND) has seen its share price rally strongly post-IPO.  Beyond Meat is trading over $88 while the highest price target in the market is $81.  Beyond Meat has surged over 250% since its recent IPO as investors bet the demand for meat alternatives will grow strongly.  Beyond Meat is not yet rated in our Global Top Stock Ideas
  • Children’s Place (PLCE) shares plunged after management said revenue in May is facing “a vacuum.”  Children’s Place at the same time increased full-year EPS guidance to $5.75 to $6.25, consensus is presently $5.58.  Children’s Place is citing poor weather for the sudden drop in revenue it is seeing this Spring.  Children’s Place is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Dillard’s (DDS) reported first quarter net sales that trailed consensus.  Dillard’s posted first quarter net sales of $1.47 billion while consensus was for $1.5 billion.  First quarter EPS of $2.99 beat consensus of $2.89.  Dillard’s delivered same store sales growth of 0%, behind the 2% expected, while total sales grew 1%, also trailing consensus of 2%.  Dillard’s is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Farfetch Ltd. (FTCH) shares fell after the company announced a wider-than-expected loss in the first quarter. Farfetch observed an adjusted loss of $0.22/share during the first quarter while analysts expected an adjusted loss of $0.15/share. Still, analysts who cover Farfetch remained upbeat on the online retail platform. Farfetch is not rated in our Global Top Stock Ideas.
  • Jack in the Box (JACK) reported fiscal second quarter adjusted earnings that beat consensus.  Jack in the Box reported fiscal second quarter adjusted EPS of 99 cents, beating consensus of 80 cents.  Second quarter revenue of $215.7 million beat consensus of $209.8 million.  Jack in the Box posted same store sales growth of 0.2% beating consensus of a 0.1% drop.  Jack in the Box is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Kering Group (KER) announced it will no longer work with models under 18 years of age.  Kering said this will apply to both live fashion shows and photos.  Kering had announced last year that it would no longer work with models under 16.  The effort is part of a movement to improve the treatment of models across the industry.  Kering (ENXTPA:KER) is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas
  • Nestle (SWX:NESN) has entered exclusive talks to sell its skin-health business to private-equity firm EQT and the Abu Dhabi Investment Authority, the WSJ is reporting.  This is the first concrete move from Nestle since it announced in September its plans to reshape its portfolio of products in an effort to spur growth.  The general plan is to focus more on coffee, pet care, and consumer health.  Nestle said it expects to close a deal in the second half of 2019.  Nestle in rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Sony (SNE) announced its second share buyback this year.  Sony approved a buyback of up to 200 billion yen.  Sony could buy back up to 4.8% of its outstanding shares if fully implemented.  Sony is responding to activist investors who have demanded buybacks.  Sony is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas.
  • Telsa (TSLA) saw one of its biggest investors sell most of its position in the stock.  T. Rowe Price had been one of Tesla’s biggest investors since going public but recently unloaded 81% of its holdings in Tesla.  The paring down if its position comes in the wake of a 30% drop in Tesla’s share price in 2019.  Tesla is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Thomas Cook Group Plc (LSE: TCG) shares fell by double-digits after the debt-ridden travel group warned investors that it will face another tough summer. Thomas Cook also told investors of a 300 million pound ($385 million) recue loan that it will receive, but only if the company makes progress with the sale of its airline. Thomas Cook is rated “Top Short” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Walmart (WMT) reported earnings that beat consensus.  Walmart reported first quarter adjusted EPS of $1.13, ahead of $1.02 expectation.  Revenue of $123.9 billion trailed $124.9 billion consensus.  Comparable sales grew 3.4% y/y matching consensus.  Walmart saw e-commerce sales grow 37% y/y.  Walmart is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas

Global Information Technology Stocks Trending in the News

  • Cisco Systems (CSCO) reported solid fiscal third quarter revenue earnings, a touch above consensus.  Cisco reported fiscal third quarter EPS of 78 cents, beating consensus of 77 cents.  Revenue of $12.96 billion beat consensus of $12.87 billion.  Cisco gave bullish guidance, saying fiscal fourth quarter revenue should grow 4.5% to 6.5%, to $13.2 billion to $`3.5 billion; consensus is $13.3 billion.  Cisco Systems is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Netease (NTES) reported first quarter earnings that beat the highest estimate.  Netease reported first quarter adjusted earnings per ADR of $3.48, beating consensus of $2.42.  Revenue in the first quarter of $2.74 billion trailed consensus of $2.67 billion.  Netease saw its stock upgraded at buy at China Renaissance with its price target hiked to $330.  Netease is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Ubisoft Entertainment (ENXTPA: UBI) shares tanked after the video game maker missed its own sales projections as its highly anticipated Division 2 console video game faced difficult competition in the quarter. Ubisoft observed net bookings of 676.7 million euros ($757 million) during its fiscal fourth quarter that missed the company’s prior forecast of 698.0 million euros. Ubisoft’s Division 2 game faced tough competition both from free-to-play and tradition paid-for games. Ubisoft Entertainment is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Wix.com (WIX) shares fell after announcing adjusted earnings of $0.03/share in the first quarter that trailed analyst expectations for adjusted earnings of $0.05/share. Wix.com also offered second quarter revenue guidance of between $182.0 million and $184.0 million, the midpoint of which misses consensus of $183.6 million. Wix.com is not rated in our Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Air Canada (TSX:AC) announced that it is in exclusive talks to acquire Transat Airlines (TSX:TRZ) for $387 million.  Air Canada said it is offering a 23% premium for Transat.  Air Canada’s offer is over twice the price that Transat was trading at no April 30th when it announced it was in talks with a potential suitor.  Air Canada is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.  Transat Airlines is not rated in our Global Top Stock Ideas.
  • AO Smith (AOS) shares slid by double-digits and the most intraday in more than 3 years after J Capital published a short report for the stock. J Capital’s short report includes a price target of $22.68 for AO Smith shares while the stock closed at $48.19/share on Wednesday. J Capital believes that AO Smith’s revenue in 2019 will disappoint analyst expectations. AO Smith is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Boeing (BA) has completed the software development and updated the software used on the 737 Max.  Boeing has flown 207 flights for a total of 360 hours of flight time.  Boeing is providing the FAA with additional requested data as the FAA reviews updated training materials.  Boeing is hoping to schedule certification flights soon with the FAA.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.  
  • InterGlobe Aviation Limited (NSEI: INDIGO) shares fell the most intraday in a year following reports that the billionaire founders of the company are hiring law firms to settle differences between the two. Raul Bhatia and Rakesh Gangwal, the founders of India's largest airline, are reportedly facing disagreements in relation to the airline's future strategy and clauses in the company’s shareholder agreement. InterGlobe Aviation Limited is rated “Neutral” in our India All-Cap Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Citigroup (C) was fined 310.8 million euros by the EU for its traders’ participation in an F/X collusion scheme.  Citigroup’s traders colluded in chat rooms over F/X trading strategies to the detriment of investors.  The EU called the traders a “cartel” who illegally manipulated the F/X market for their own gain.  Citigroup is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • New York Community Bancorp (NYCB) is trading lower on proposals in the New York State Legislature to strengthen rent control laws in favor of tenants.  The New York State Legislature is not completely controlled by Democrats who have made clear their plans to make life harder for building owners.  New York Community Bancorp is the most exposed bank in New York state to multi-family building lending, according to Wedbush, as is likely to suffer from lower loan and re-financing demand.  New York Community Bancorp is rated “Neutral” in our US Large-Cap Global Top Stock Ideas

Global Commodities & Power Stocks Trending in the News

  • Lukoil PJSC (MISX: LKOH) shares surged the most intraday in more than a year after the firm’s board of directors approved the cancellation of millions of shares related to its current buyback program. According to the company, Lukoil will eliminate 35 million shares after purchasing them for 5,450 rubles/share. Lukoil’s charter capital also intends to reduce to 715 million shares, however, the plan requires shareholder approval at the company’s annual meeting in June. Lukoil is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.

 

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Actionable and Transparent Quantitative ResearchActionable and Transparent Quantitative Research

US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 3.47 basis points to 2.19%
  • US 5-Year Treasury Bonds are lower with yields up 2.5 basis points to 2.17%
  • US 10-Year Treasury Bonds are lower with yields up 2.3 basis points to 2.39%
  • The US Treasury 2s-5s Spread has narrowed 0.97 basis points to -0.02%
  • The US Treasury 2s-10s Spread has narrowed 1.17 basis points to 0.2%
  • US Treasury 5s-10s Spread has narrowed 0.2 basis points to 0.22%

Currencies

  • EUR€ is down 0.232% against the USD$ in after hours to 1.1175
  • GBP£ is down 0.366% against the USD$ in after hours to 1.2798
  • CHF is little changed 0.131% against the USD$ in after hours to 0.9901
  • JPY¥ is up 0.219% against the USD$ in after hours to 109.84

Commodities

  • WTI Crude is up 1.37% to USD$62.87/bbl with the Brent-WTI spread little changed USD$-0.12 to USD$10.95/bbl
  • Gold is down -0.76% to USD$1286.59/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
Cisco Systems Inc Information Technology 44 6.66%            6,234,471
Linde PLC Materials 157 3.75%                375,742
Mettler-Toledo International Inc Health Care 582 3.59%                  71,400
Northrop Grumman Corp Industrials 259 3.47%                217,135
Marathon Petroleum Corp Energy 64.4 3.26%            3,175,501
 
Underformers Sector Price 1D % Chg Volume
Nektar Therapeutics Health Care 44.5 -7.55%            1,360,909
Xilinx Inc Information Technology 91.2 -7.27%            3,513,539
Qorvo Inc Information Technology 61.6 -7.14%                485,887
AO Smith Corp Industrials 45.9 -6.27%            1,671,833
Skyworks Solutions Inc Information Technology 68.4 -6.04%            1,207,050
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY