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US stocks tumble, risk-appetite wanes, as trade war battle lines harden; oil slides and Treasuries rally

May 23, 2019

 

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Market data as market close 5/23/2019

US Market Snapshot

Stocks Trending in the News8

Click name for Q-Factor rating and financials data.

Global Consumer Stocks Trending in the News

  • Amazon (AMZN) is working on a wearable device that can read your emotions, Bloomberg is reporting.  Amazon is developing the wearable together with Lab126 which is the development group behind its Fire phone and Echo speakers.  The wearable is designed to work with an app and uses your voice to read emotions.  The project is code named Dylan and it is not clear if it will ever become commercially viable.  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.  
  • Avon Products (AVP) came to a final agreement with Brazil’s Natura (NATU3) that will see it acquired in a deal valued at more that $2 billion.  Natura will own about 76% of the resultant company with Avon shareholders owning the rest.  A formal announcement is expected during Wednesday’s trading session.  Natura previously acquired The Body Shoppe chain.  Natura is rated “Attractive” in our Brazil All-Cap Global Top Stock Ideas.  Avon is not rated in our Global Top Stock Ideas
  • Best Buy (BBY) reported first quarter earnings and same store sales that beat consensus.  Best Buy reported first quarter same stores sales growth of 1.1%, beating 0.9%.  First quarter adjusted EPS of $1.02 beat consensus of 87 cents.  Revenue in the first quarter was $9.14 billion matching consensus.  Best Buy provided second quarter EPS guidance of $0.95 to $1.00 on revenue of $9.5 billion to $ 9.6 billion.  Best Buy is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Casino (ENXTPA:CO) and parent company Rallye (ENXTPA:RAL) were placed under credit protection as both struggle under an enormous debt load.  Credit protection is a feature of French law allowing a company 6 months to present a restructuring plan.  Shares of both were suspended Thursday as the news was published and will resume trading Friday.  Casino is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.  Rallye is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas
  • Chipotle (CMG) was downgraded to underperform from market perform at BMO Capital Markets.  Chipotle saw its price target cut to $620 from $675 at the same time.  Fear over African Swine Fever was cited in the downgrade.  Chipotle is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  
  • L Brands (LB) reported first quarter earnings that beat consensus.  L Brands reported first quarter EPS of 14 cents, beating consensus of $0.  Net sales of $2.63 billion beat consensus of $2.56 billion.  Flat sales growth in the first quarter beat an expected drop of 1.2%.  L Brands provided EPS guidance for the second quarter of 15-20 cents and for the year of $2.30 to $2.60.  L Brands is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Target (TGT) was upgraded to overweight from neutral by JP Morgan.  Target saw its price target hiked to $100 from $81.  In the upgrade report, JP Morgan notes the shares are undervalued, saying Target deserves a best in class valuation.  Target has been delivering strong performance and JP Morgan expects that to continue.  Target is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Vivendi (ENXTPA:VIV) has been trying to sell a minority stake in its Universal Music Group for some time and is now focused on strategic buyers, Bloomberg reports.  The report says private buyers, Vivendi’s initial focus, have balked and the foot-dragging by Vivendi and the rich price being sought for a minority stake.  Despite talks and pitches, Vivendi still had no hired any bankers or advisers for the deal, so some question how serious Vivendi is.  Vivendi is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Yum! Brands (YUM) is planning a large expansion of its Taco Bell unit in India as it seeks new avenues of growth.  Taco Bell will add 600 location over the next decade.  Yum Brands has 35 Taco Bells in India today.   The expansion in India will help Taco Bell grow from 7,500 location today to 9,000 by 2022.  Yum Brands is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  

Global Information Technology Stocks Trending in the News

  • Facebook (FB) removed a record 2.2 billion fake account in the first quarter of 2019.  For comparison, in the fourth quarter of 2018, Facebook removed just over 1 billion.  The accounts removed are done so as soon as they are created so they are not captured in official new accounts statistics.  Facebook is making a concerted effort to remove fake accounts as it comes under growing criticism.  Facebook is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas
  • Hewlett Packard Enterprise (HPE) provided fiscal third quarter EPS guidance that matches consensus.  Fiscal third quarter EPS will be 53 to 56 cents while consensus is 55 cents.  Hewlett Packard Enterprise hiked full year EPS guidance to $2.14 to $2.21, up from $2.12 to $2.22.  Hewlett Packard Enterprise is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Intuit (INTU) reported fiscal third quarter EPD that beat consensus.  Intuit posted fiscal third quarter EPS of %5.55, beating consensus of $5.40.  Third quarter revenue of $3.27 billion just ahead of consensus of $3.23 billion, growing 12% y/y.  Intuit hiked full year adjusted EPS guidance to $6.67 to $6.69, consensus is $6.55.  Intuit is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Microsoft (MSFT) removed Huawei products from its Azure products website.  The move by Microsoft comes a week after the US government moved to ban Huawei from the US tech sector.  Huawei made a number of products for Microsoft’s Azure Stack products and all have been remove from their catalog.  Microsoft has not commented on other moves it will make in relation to the Huawei ban.  Microsoft is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
  • NetApp (NTAP) reported fiscal fourth quarter adjusted EPS that trailed consensus.  NetApp reported fiscal fourth quarter EPS of $1.22, trailing consensus of $1.26.  NetApp reported fourth quarter revenue of $1.59 billion, also trailing consensus of $1.64 billion.  NetApp hiked its quarterly dividend 20% to 48 cents per share.  NetApp is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Qualcomm (QCOM) violated anti-trust law with its business practices, a federal judge has ruled.  Qualcomm used its dominant market position to charge excessive licensing fees.  “Qualcomm’s practices have strangled competition,” the judge wrote in a ruling that agreed with FTC findings.  Qualcomm charges a percentage of the sale price of the phone, a practice the judge found excessive.  Qualcomm is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas
  • Weibo (WB) reported first quarter adjusted EPS that beat consensus.  Weibo posted first adjusted quarter EPS of 56 cents, ahead of 53 cents consensus.  First quarter revenue came in line with consensus at $399.2 million.  Weibo posted first quarter MAUs of 54 million.  Weibo provided second quarter revenue guidance of $427 million to $437 million, a rise of 7-10% on a constant currency basis.  Weibo is rated “Neutral” in our China All-Cap Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • Boeing’s (BA) 737 Max may not be returning to service as quickly as the industry is expecting.  The acting head of the FAA said he cannot predict when the plane will return to service.  It was assumed the aircraft would return by summer’s end and Boeing has expressed the same hopes.  But the FAA, suffering from a lack of credibility, still needs to convince other global regulators that the plane is air worthy.  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 Financial Stocks Trending in the News

  • China CITIC Bank (SEHK:998) and Baidu (BIDU) are seeking up to 7 billion yuan in private funding in its first round of funding for its digital bank, aiBank.  China CITIC and Baidu launched the online bank in 2015 and are seeking funding to drive growth.  aiBank provides personal loans of up to 300,000 yuan with no collateral.   China CITIC Bank is rated “Neutral” in our China All-Cap Global Top Stock Ideas.

 

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US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -8.49 basis points to 2.13%
  • US 5-Year Treasury Bonds are higher with yields down -7.69 basis points to 2.10%
  • US 10-Year Treasury Bonds are higher with yields down -7.23 basis points to 2.30%
  • The US Treasury 2s-5s Spread has widened 0.80 basis points to -0.04%
  • The US Treasury 2s-10s Spread has widened 1.26 basis points to 0.17%
  • US Treasury 5s-10s Spread has widened 0.46 basis points to 0.21%

Currencies

  • EUR€ is up 0.278% against the USD$ in after hours to 1.1181
  • GBP£ is little changed 0.055% against the USD$ in after hours to 1.2658
  • CHF is up 0.646% against the USD$ in after hours to 0.9968
  • JPY¥ is down 0.743% against the USD$ in after hours to 109.54

Commodities

  • WTI Crude is down -5.73% to USD$57.71/bbl with the Brent-WTI spread up USD$1.23 to USD$9.94/bbl
  • Gold is up 0.83% to USD$1283.93/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
L Brands Inc Consumer Discretionary 26.6 12.84%            3,270,360
Copart Inc Industrials 49.4 7.95%            1,006,983
Medtronic PLC Health Care 85.9 3.24%            2,243,325
Target Corp Consumer Discretionary 68.2 2.37%            2,194,405
Incyte Corp Health Care 78.6 1.87%                567,368
 
Underperformers Sector Price 1D % Chg Volume
NetApp Inc Information Technology 62.4 -8.11%            3,612,023
Hess Corp Energy 51.8 -7.93%                772,903
Devon Energy Corp Energy 26.4 -7.30%            1,587,608
Noble Energy Inc Energy 22.7 -6.93%            1,386,919
Cimarex Energy Co Energy 73.3 -6.58%                442,301

 

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