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To the Moon! US stocks soar on Fed President Powell's openness to rate cuts

Jun 04, 2019

 

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Market data as of 12:30 pm EST

US Market Snapshot

Stocks Trending in the News

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Global Consumer Stocks Trending in the News

  • Calares (CAL) saw its price target cut to $28 from $32 at Needham.  Calares’ buy rating was maintained.  Needham believes the softness in comps seen in the first quarter will persist into the second quarter.  The third quarter should see improvement for Calares, Needham adds.  The inventory situation should improve by then as well.  Calares is rated “Top Buy” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Carnival Cruise Lines (CCL) is set to suffer as the US State Department said it will no longer allow cruise ships and other vessels to make stops in Cuba.  The US cited Cuba’s actions in Venezuela and its causing the humanitarian crisis there.  The US government action caught the industry by surprise when announced.  Cruise companies have been adding sailings to Cuba recently as demand to go there remains strong.   Carnival Cruise Lines is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.    
  • Cracker Barrel (CBRL) reported fiscal third quarter EPS that beat consensus.  Cracker Barrel fiscal third quarter EPS of $2.09, beating consensus of $2.07.  Same store sale grew 1.3%, just above 1.2% expected.  Fiscal third quarter revenue of $739.6 million beat consensus of $721.4 million.  Cracker Barrel boosted its regular quarterly dividend to $1.30 per share from $1.25.  Cracker Barrel also declared a special dividend of $3.00 per share.  Cracker Barrel is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.    
  • Mattel Inc. (MAT) shares soared by double-digits after the company signed an international licensing agreement with Sanrio Inc. (TSE: 8136) to develop toys and products inspired by Hello Kitty & Friends and other related characters within the Sanrio’s portfolio. According to Chief Franchise Management Officer Janet Hsu, “This relationship is another example of Mattel’s commitment to collaborate with globally-recognized franchises as part of our transformation into an IP-driven, high-performing toy company.” Mattel is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas. Sanrio is not rated in our Global Top Stock Ideas.
  • Tesla (TSLA) is likely to see a recovery of sales in 2020 after recently disappointing sales news, Morgan Stanley writes.  This comes just a month after Morgan said the worst-case scenario for Tesla includes a $10 price target.  Morgan is maintaining its equal-weight rating and $230 price target.  Morgan sees a revenue jump in 2020 as the Model 3 enters new markets.  Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.    
  • Tiffany (TIF) reported first quarter same store sales that missed estimates with earnings that matched.  Tiffany's first quarter same store sale in constant currency dropped 2% while consensus was for a 1.2% drop.  Tiffany first quarter EPS of $1.03 came in line with consensus of $1.02.  Net sales of $1.0 billion came in line with $1.03 billion.  Tiffany boosted its quarterly dividend to 58 cents from 55 cents, trailing consensus of 60 cents.  Tiffany is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  

 

Global Information Technology Stocks Trending in the News

  • Advanced Micro Devices (AMD) will license its graphic designs to Samsung (KOSE:A005930) for use in its smartphones.  AMD will license its designs for use in a segment of the market where it presently is absent.  The deal could potentially supply hundreds of millions of dollars in revenue to AMD, sending the shares sharply higher.  Samsung will get cutting-edge graphics as it seeks to differentiate its phones.   Advanced Micro Devices is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.    Samsung is not rated in our Global Top Stock Ideas 
  • Alibaba (BABA) was initiated at Loop Capital with a buy at Loop Capital and a price target of $250.  Alibaba is described as the world’s most complete digital retail ecosystem by Loop Capital.  Alibaba is Loop’s favorite tech stock, which they call their “favorite among internet mega-cap stocks.”   Alibaba is the “best play in China’s pivot to consumerism.”  Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Alphabet’s (GOOGL) Google is gearing up for a legal battle with the US Justice Department.  The US government has indicated it is preparing to investigate the company over potential anti-trust concerns.  As Google has grown larger and more powerful in the age of data, many critics think it’s too powerful, especially with its internet search dominating the market.  No idea how long this could last.  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.    
  • Apple (AAPL) will fall under the jurisdiction of the Justice Department IF the US government decides to investigate the company for anti-trust violations, the Justice Department said today.  Prominent tech companies are under immense scrutiny for a number of their practices and the concentration of “power,” as critics argue, in just a few.  The announcement was made while Apple executives were on stage at Apple’s developer conference.  Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas. 
  • Netflix (NFLX) shares rallied today after BMO Capital Markets wrote to clients that the stock is the “best option” among FAANG stocks because the company does not face any antitrust or regulatory risks. BMO Capital Markets maintains an outperform rating for Netflix and a price target of $470/share, implying a nearly 40% upside from its closing price Monday. Netflix is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.    
  • SoftBank Group Corp. (TSE: 9984) will observe a pretax profit of 1.2 trillion yen ($11.1 billion) after selling part of its stake in Chinese e-commerce giant Alibaba Group Holding (BABA). The sale by SoftBank is the first by Alibaba’s largest shareholder since it initially entered a stake in the company 16 years ago. SoftBank is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas. Alibaba is rated “Attractive” in our China All-Cap Global Top Stock Ideas.
  • Square (SQ) is having issues with sending receipts to wrong emails after completing transactions, WSJ is reporting.  WSJ documents many cases in which customers receive receipts for transactions they know nothing about involving other customers cards.  Square matches contact details with transaction details and often a mismatch causes erroneous emails to go out.  Square responded to the report saying it has cut errors by over 50% and is shooting to eliminate them completely.  Square is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.    
  • Tencent (SEHK:700) is investing in UK fintech company TrueLayer, joining a $35 million funding round, as it targets fintech startups.  TrueLayer develops open-banking software.  The software allows people to share of aggregate financial information from different providers.  TrueLayer is expected to use the funding to expand across Europe.  Tencent is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Uber (UBER) disclosed it is under tax investigation in the US and there are potential investigations in other markets.  Uber said the IRS is looking at its taxes from 2013 and 2014.  Uber said some states and other jurisdictions are looking at its taxes.  Uber said its tax benefits are likely to be cut due to the company’s “transfer pricing positions.”  Uber is not rated in our Global Top Stock Ideas
  • Ubisoft (ENXTPA: UBI) shares fell by more than 5% following a series of share sales by Guillemot Brothers Ltd. over the last two weeks of May. According to filings published on Monday and May 27th, Guillemot Brothers sold 400,000 total shares. The Guillemot family currently owns roughly 18% of Ubisoft. Ubisoft is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Western Digital (WDC) had its price target cut to $55 from $60 at Deutsche Bank while its rating of buy was maintained.  Deutsche cited uncertainty around the trade war that is expected to weigh on Western Digital.  Estimates were cut to reflect the growing uncertainty with the trade tensions.  Western Digital is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.    

 

Global Industrials Stocks Trending in the News

  • Caterpillar (CAT) saw its price target cut at UBS to $115 from $125 while maintaining the sell rating.  UBS expects cut to construction activity in both the US and China.  Some of that will be offset by increased mining activity.  UBS sees the potential for further cuts to estimates in 2020 if trade tensions persist.  Caterpillar is rated "Neutral" in our US Large-Cap Global Top Stock Ideas and "Unattractive" in our US Industrials Global Top Stock Ideas. 
  • Navistar (NAV) boosted revenue guidance to around 5% above analysts’ consensus.  Navistar sees full year revenue of $11.25 billion to $11.75 billion, up from $10.75 billion to $11.25 billion.  Navistar reported second quarter revenue that beat consensus.  Second quarter revenue of $3.0 billion beat consensus of $2.69 billion.  Navistar is rated "Neutral" in our US SMID-Cap Global Top Stock Ideas and "Neutral" in our US Industrials Global Top Stock Ideas. 

 

Global Commodities & Power Stocks Trending in the News

  • Lyondell Bassell Industries NV (LYB) shares rose after it announced the end of its pursuit to acquire Braskem SA (BOVESPA: BRKM5). The prospective deal, which would have made Lyondell the world’s largest plastic maker, collapsed after the two parties failed to reach agreed upon terms. The announcement by Lyondell erases concerns among investors that the company would have overpaid to become the world’s leading provider of both polyethylene and polypropylene. Lyondell is not rated in our Global Top Stock Ideas. Braskem is rated “Top Short” in our Brazil All-Cap Global Top Stock Ideas.

 

Global Health Care Stocks Trending in the News

  • The merger between CVS Health Corp. (CVS) and Aetna (AET) is facing scrutiny by Judge Richard Leon, a US District Court for the District of Columbia. Leon will host a 3-day evidentiary hearing beginning Tuesday to review if the agreed upon concessions between CVS Health and the US Justice Department would ease concerns relating to the merger’s impact on competition. The prospective $69 billion merger of the companies was initially agreed upon in November 2018. CVS Health is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. Aetna is not rated in our Global Top Stock Ideas.
  • Quest Diagnostics (DGX) said up to 11.9 million patients’ personal and medical records may have been available to hackers in a data breach at a collections agency that works with Quest.  Quest reported that someone had access to all patients information for 8 months, information including credit card numbers, social security numbers and bank accounts.  Quest said it suspended the collection agency for now and is working with law enforcement.  Quest Diagnostics is rated “Neutral” 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 4.97 basis points to 1.88%
  • US 5-Year Treasury Bonds are lower with yields up 5.41 basis points to 1.88%
  • US 10-Year Treasury Bonds are lower with yields up 5.35 basis points to 2.12%
  • The US Treasury 2s-5s Spread has widened 0.44 basis points to 0.01%
  • The US Treasury 2s-10s Spread has widened 0.38 basis points to 0.24%
  • US Treasury 5s-10s Spread has narrowed 0.06 basis points to 0.24%

Currencies

  • EUR€ is little changed 0.116% against the USD$ in after hours to 1.1254
  • GBP£ is up 0.308% against the USD$ in after hours to 1.2703
  • CHF is little changed 0.079% against the USD$ in after hours to 1.0083
  • JPY¥ is little changed 0.046% against the USD$ in after hours to 108.12

Commodities

  • WTI Crude is up 0.43% to USD$53.48/bbl with the Brent-WTI spread up USD$0.89 to USD$9.4/bbl
  • Gold is little changed 0.01% to USD$1325.45/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
Mattel Inc Consumer Discretionary 12.6 11.71%            4,060,553
Wynn Resorts Ltd Consumer Discretionary 108 8.98%                881,828
Xerox Corp Information Technology 22.8 7.49%            1,181,172
MGM Resorts International Consumer Discretionary 27.3 7.42%            2,375,615
Whirlpool Corp Consumer Discretionary 124 7.25%                223,852
 
Underperformers Sector Price 1D % Chg Volume
Nektar Therapeutics Health Care 44.5 -3.35%                817,675
Ventas Inc Real Estate 60.6 -3.10%            1,939,143
HCP Inc Real Estate 29.4 -2.64%                910,461
McCormick & Co Inc/MD Consumer Staples 141 -2.53%                212,362
Welltower Inc Real Estate 72.3 -2.38%                477,143

 

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