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US stocks close higher on trade optimism and potential avoidance of tariffs on Mexico as oil enters bear market

Jun 05, 2019

 

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US Market Snapshot

Stocks Trending in the News

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Global Consumer Stocks Trending in the News

  • American Eagle (AEO) reported first quarter adjusted EPS that beat consensus.  American Eagle posted first quarter adjusted EPS of 24 cents, beating consensus of 21 cents.  American Eagle reported revenue in the first quarter of $886.3 million, ahead of $855.5 consensus.  Same store sales grew 6% in the first quarter, well above 3.1% consensus.  American Eagle provided second quarter adjusted EPS guidance of 30 to 32 cents, below consensus of 35 cents.  American Eagle is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Brown-Forman (BF.A) shares traded higher after the company announced financial for the fiscal fourth quarter above the average analyst estimate. Brown-Forman observed earnings during the fiscal fourth quarter of $0.33/share while analysts expected $0.30/share. Brown-Forman also offered FY2020 earnings guidance of between $1.75/share and $1.85/share that came in line with consensus $1.81/share. Brown-Forman is rated “Attractive” in our US Large-Cap Global Top Stock ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • 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.
  • Campbell Soup Co (CPB) reported fiscal third quarter adjusted earnings that beat consensus.  Campbell Soup reported fiscal third quarter adjusted EPS of 56 cents, beating consensus of 47 cents.  Third quarter net sales of $2.18 billion trailed consensus of $2.36 billion.  Campbell Soup provided full year adjusted EPS guidance of $2.50 to $2.55.  Campbell Soup is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples 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 it's 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.    
  • Five Below (FIVE) reported same store sales that missed with adjusted earnings that beat consensus.  Five Below posted first quarter same store sales growth of 3.1%, trailing consensus of 3.8%.  First quarter EPS of 46 cents beat consensus of 35 cents.  Five Below hiked full-year EPD guidance to $3.11 to $3.18, up from  $3.00 to $3.07, with net sales of $1.87 billion to $1.89 billion.  Five Below is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.    
  • Ford Motor Co (F) saw its joint venture in China, called Changan Ford Automobiles, fined for anti-trust violations by Chinese authorities.  Ford will be fined $26 million for restricting retailers’ sale price in the city of Chongqing.  The move is China pressuring US companies as a result of the trade war and actions against other US companies is almost guaranteed.  Ford Motor Co is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • GameStop (GME) shares slid after the company reported a complete cut to its dividend.  GameStop also said the rest of the year “will probably be tough.”  Not what investors want to hear.  GameStop’s CEO said management is confident that redirecting capital to debt reduction is the right move for the company.  Analysts comments focus on the fear that management is not confident in GameStop’s ability to generate cash going forward.  GameStop is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.    
  • Walmart (WMT) will get a visit from socialist and presidential candidate Bernie Sanders.  Sanders will hold a protest at the annual shareholders meeting of Walmart in an attempt to pressure Walmart to improve working conditions.  Sanders is aiming to attract working-class democratic voters with his Walmart protest, Walmart has been a frequent target of Sanders’ tirades.  Walmart is rated “Top Buy” 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

  • Alibaba (BABA) has signed a memorandum of understanding to form an e-commerce JV with Russian firms MegaFon, Mail.ru and Direct Investment Fund.  Alibaba will take a 49.9% in the JV and made the announcement after receiving anti-trust approval from Russian authorities.   Alibaba will contribute its Russian businesses plus $100 million.  Alibaba had previously set up a $2 billion venture fund in Russia to expand its presence.  Alibaba is rated “Attractive” in our China All-Cap Global Top Stock Ideas
  • NXP Semiconductor (NXPI) was upgraded to hold from sell at Stifel.  NXP Semiconductor saw its price target hiked to $95 from $85 as well.  Stifel cited reduced debt risk and greater confidence there won’t be any additional cuts to estimates.  NXP Semiconductor could take advantage of lower interest rate to further refinance its debt.  NXP Semiconductor is not rated on our Global Top Stock Ideas 
  • Roku (ROKU) touched record territory today after Guggenheim upgraded the stock to buy from hold.  Roku has “great secular tailwinds” behind it for streaming video, Guggenheim write.  Roku saw its price target hiked to $119 from $75.  Roku has surged 260% since its December low.  Roku is rated “Top Short” in our US Large-Cap Global Top Stock Ideas
  • Salesforce.com (CRM) reported first quarter revenue and earnings that beat expectations.  Salesforce.com posted first quarter revenue of $3.74 billion, up 24%, beating consensus of $3.68 billion.  First quarter adjusted EPS of 93 cents, well above 61 cents consensus.  Salesforce.com provided full year EPS guidance of $2.88 to $2.90 and revenue of $16.1 billion to $16.25 billion.  Salesforce.com is rated “Neutral” 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

  • Boeing Co. (BA) shares edged higher following reports that the aerospace and defense company is currently in talks regarding one of the largest orders ever of wide-body jetliners with Chinese airline companies. This news comes despite escalating trade tensions between the US and China. Negotiations have homed in on Boeing’s 77709 variant of the 787 Dreamliner aircraft, the company’s most expensive jet with a price tag of $442.2 million. Boeing is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.  
  • Dassault Aviation (ENXTPA: AM) shares rose after Goldman Sachs wrote to clients that the company’s shares are cheap. Goldman Sachs also wrote that Dassault has the flexibility to hike its dividend payment while still maintaining investments in research and capital spending. Dassault Aviation is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • Mitsubishi Heavy Industries (TSE:7011) is in talks to buy Bombardier’s (TSX:BBD.B) regional get business.  Mitsubishi Heavy Industries is in the process of designing Japan’s first jetliner since the 1960s.  Mitsubishi said no decision has been made yet.  Press reports that an announcement could come at the Paris Air Show that begins June 17th.  Mitsubishi Heavy Industries is rated “Neutral” in our Japan Large-Cap Global Top Stock Ideas.  Bombardier is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas
  • United Airlines (UAL) is celebrating the UN’s Environment Day by flying “planet flight.”  United will fly from Chicago to Los Angeles today with a minimal environmental footprint.  On the flight, United will generate zero cabin waste and fly on a mixture of biofuels.  United will by offsetting credits for any air pollution it generates.  United is trying to show the efforts airlines can make for the environment.  United Airlines is rated "Attractive" in our US Large-Cap Global Top Stock Ideas and "Neutral" in our US Industrials Global Top Stock Ideas. 

Global Financial Stocks Trending in the News

  • Provident Financial Plc (LSE: PFG) shares soared following the end of a hostile bid by Non-Standard Finance Plc (LSE: NSF), the smaller UK lender that is backed by investor Neil Woodford. A statement from Non-Standard Finance confirmed an early report from Bloomberg that the company will let the bid for Provident lapse. Provident Financial Group is rated “Top Short” in our United Kingdom All-Cap Global Top Stock Ideas. Non-Standard Finance is not rated in our Global Top Stock Ideas.
  • Wells Fargo (WFC) has pledged $1 billion to help with affordable housing initiatives.  Wells Fargo made the announcement as part of its pledge to spend 2% of its profits on philanthropy.  Wells Fargo will also focus its efforts on helping small business after donating $444 million to 11,000 nonprofits last year.  Wells Fargo is rated “Neutral” in our US Large-Cap Global Top Stock Ideas

Global Health Care Stocks Trending in the News

  • Cronos Group Inc. (TSX: CRON) shares soared after CEO Mike Gorenstein told a slew of Wall Street analysts that the Candida-based cannabis company will be, “aggressive” in a US CBD launch. Bank of America upgraded Cronos Group shares two notches from underperform to buy on the comments. Gorenstein also told the group that the launch is not, “that long of a way out.” Cronos Group is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.

 

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US Treasuries

  • US 2-Year Treasury Notes are higher with yields down -4.05 basis points to 1.84%
  • US 5-Year Treasury Bonds are higher with yields down -3.46 basis points to 1.86%
  • US 10-Year Treasury Bonds are higher with yields down -0.87 basis points to 2.12%
  • The US Treasury 2s-5s Spread has widened 0.59 basis points to 0.02%
  • The US Treasury 2s-10s Spread has widened 3.18 basis points to 0.28%
  • US Treasury 5s-10s Spread has widened 2.59 basis points to 0.26%

Currencies

  • EUR€ is down 0.24% against the USD$ in after hours to 1.1225
  • GBP£ is little changed 0.087% against the USD$ in after hours to 1.2687
  • CHF is down 0.208% against the USD$ in after hours to 1.0058
  • JPY¥ is up 0.259% against the USD$ in after hours to 108.43

Commodities

  • WTI Crude is down -3.37% to USD$51.68/bbl with the Brent-WTI spread up USD$2.13 to USD$9.86/bbl
  • Gold is up 0.4% to USD$1330.88/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
PG&E Corp Utilities 6.95 10.78%            1,626,612
Campbell Soup Co Consumer Staples 35.5 10.02%            1,668,537
salesforce.com Inc Information Technology 149 5.06%            2,050,889
Brown-Forman Corp Consumer Staples 46 4.68%                477,803
MSCI Inc Financials 157 4.33%                112,565
 
Underperformers Sector Price 1D % Chg Volume
Cimarex Energy Co Energy 73.3 -5.37%                273,603
Occidental Petroleum Corp Energy 65.5 -4.55%            2,953,725
Halliburton Co Energy 30.3 -3.51%            5,398,654
National Oilwell Varco Inc Energy 29.3 -3.47%            1,594,847
Norwegian Cruise Line Holdings Ltd Consumer Discretionary 46.1 -3.46%            1,192,607

 

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