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Baby Steps: US stocks post modest gains as rise is jobless claims fuels hopes for rate cut

Jun 13, 2019

 

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US Market Snapshot

Stocks Trending in the News

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Global Consumer Stocks Trending in the News

  • Callaway Golf Co. (ELY) shares soared by double-digits after activist investor Jana Partners urged the sporting goods company to initiate a strategic review of the company, including the exploration of a possible sale. Barry Rosenstein, who runs the NY-based hedge fund, also explained that Jana Partners bought 9.5% of Callaway because shares are undervalued. Callaway is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Hertz Global (HTZ) announced it will distribute subscription rights to shareholders to buy almost 58 million shares.  Each right entitles holders to purchase 0.688285 shares at $12.95.  Carl Icahn and his affiliates, holders of 28.8% of outstanding shares, plan to fully subscribe.  Proceeds will be used to pay down debt.  Hertz Global is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.   
  • Hudson’s Bay Co. (TSX:HBC) said it is moving production away from China due to the tariffs.  Hudson’s Bay has limited exposure since 70% of its revenue comes from luxury goods retailer Saks Fifth Avenue and those products are not made in China.  Hudosn’s Bay said it is confident it can mitigate any other negative effects.  Hudson’s Bay Co. is rated “Attractive” in our Canada All-Cap Global Top Stock Ideas
  • Lululemon (LULU) reported first quarter earnings that beat consensus.  Lululemon reported first quarter EPS of 74 cents, beating consensus of 70 cents.  First quarter same store sales in constant currency grew 8%, above 5.2% consensus.  Net revenue in the quarter of $782.3 million, beating $756.3 million consensus.   Lululemon gave full year revenue guidance of $3.73 billion to $3.77 billion.  Lululemon is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Red Robin (RRGB) shares jumped by more than 30% after Vintage Capital disclosed that it’s prepared to bid $40/share for the company. Stephens analyst Will Slabaugh wrote to clients that Red Robin could be a good candidate for a private equity takeout. Red Robin is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • RH (RH), previously known as Restoration Hardware, upped guidance for the year and said it is mitigating the costs of the tariffs on China.  RH had imported 41% of its products from China and said it has renegotiated prices lower from suppliers to reduce the effects of the tariffs.  RH said full year sales will be $2.64 billion to $2.66 billion, up from $2.59 billion to $2.64 billion.  RH is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Target (TGT) announced a same-day delivery option is no available for online orders.  Target said it will offer $9.99 same-day delivery service using Shipt’s delivery service.  Target touts the options as it does not require any subscription to be bought.  Target said 65,000 items can now be delivered using the service.  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.
  • Tyson Foods (TYS) is entering the veggie protein market with a hybrid burger.  Tyson is set to introduce a burger patty that is half pea protein, half angus beef.  Tyson expects its patties to be a “billion-dollar brand.”  Tyson’s CEO said he expects to be a leader in the space.  Tyson Foods is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.

Global Information Technology Stocks Trending in the News

  • Alibaba (BABA) has confidentially filed for its Hong Kong share listing, according to Bloomberg.  Alibaba is expected to raise up to $20 billion with its Hong Kong listing.  Alibaba has chosen China International Capital Corporation (SEHK:3908) and Credit Suisse Group (SWX:CSGN) to lead its listing in Hong Kong, Bloomberg previously reported.  A listing that size would be the largest in Hong Kong since 2010.  Alibaba is rated “Attractive” in our China All-Cap Global Top Stock Ideas.  China International Capital Corporation is rated “Unattractive” in our China All-Cap Global Top Stock Ideas.  Credit Suisse Group is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Juniper Networks (JNPR) was upgraded at Rosenblatt Securities to neutral from sell.  Juniper’s target price was hiked to $27 from $24.   Juniper should see growing margins on increased spending to upgrade its installed MX routers ahead of the 5G roll-out.  Anti-Chinese sentiment will also help Juniper.  Juniper Networks is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Lam Research (LRCX) was downgraded to in-line from outperform at Evercore ISI.  Lam Research’s price target was cut  to $195 from $225 as well.  Evercore sees a slower recovery in memory demand which will only come in the second half of 2020.  Lam Research will have trouble moving higher any time soon, Evercore notes.  Lam Research 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) is experimenting with turning its shows into video games as it seeks to further leverage its media content.  Netflix will release a Stranger Things video game in conjunction with the release of its show by the same name.  Netflix does not develop the games itself but licenses the names for others to create the games.  Other games are planned in the near future.  Netflix is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.

Global Industrial Stocks Trending in the News

  • American Airlines (AAL) said its managers will fly on test flights of the Boeing (BA) 737 Max before any passengers do.  American is trying to build confidence in the aircraft before it returns to service.  Executives at American plus other employees will.  American announced the move at its annual shareholders meeting.  American Airlines is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.  Boeing is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.   

Global Financials Stocks Trending in the News

  • AllianceBernstein (AB) is laying off 200 people in New York as it prepares to move all of its operations to Nashville, TN.  AllianceBernstein had previously announced its move.  Jobs in New York City in White Plains, NY, will be lost.   The move should be completed by 2022 and a total of 1,050 jobs will be lost in New York in the end.  AllianceBernstein has a total of 3,657 employees.  AllianceBernstein is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas
  • BB&T (BBT) and SunTrust (STI) have chosen the name Truist for the new bank that will result from the merger of the two.  For months BB&T and SunTrust have been asked what the new name would be and it has arrived at underwhelming praise.  When the merger is complete, Truist will be the sixth largest bank in the US.  BB&T is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  SunTrust is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global Commodities & Power Stocks Trending in the News

  • Frontline (FRO) shares surged by double-digits today following attacks on two oil tankers in the Strait of Hormuz. Investors anticipate that the attacks could drive up shipping rates, which would lead to higher profitability, especially if a longer-term conflict ensues. Analyst Frode Morkedal of Clarksons Platou wrote to clients on the matter, “We suspect that the narrative is that a conflict in the region, and a possible closure of the Strait of Hormuz, would be good for tanker rates in the short term.” Frontline is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Summit Materials (SUM) shares surged as much as 30% following a report from Reuters that the company was approached by Columbia’s Grupo Argos regarding a merger. The report cites individuals familiar with the matter and cautions that there is no guarantee that Summit will field negotiations. Summit Materials is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • Johnson & Johnson (JNJ) has a sales strategy with opioids similar to that of a drug dealer, a pharmaceutical industry critic claimed in court testimony.  The critic said J&J’s use of coupons for free pain patches was improper and contributed to the opioid epidemic.  J&J objected to that characterization in court and the judge said he will not consider that testimony.  Johnson & Johnson 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 higher with yields down -4.7 basis points to 1.83%
  • US 5-Year Treasury Bonds are higher with yields down -3.63 basis points to 1.83%
  • US 10-Year Treasury Bonds are higher with yields down -2.78 basis points to 2.09%
  • The US Treasury 2s-5s Spread has widened 1.07 basis points to 0%
  • The US Treasury 2s-10s Spread has widened 1.92 basis points to 0.26%
  • US Treasury 5s-10s Spread has widened 0.85 basis points to 0.26%

Currencies

  • EUR€ is little changed 0.115% against the USD$ in after hours to 1.1274
  • GBP£ is little changed 0.102% against the USD$ in after hours to 1.2676
  • CHF is little changed 0.119% against the USD$ in after hours to 1.0057
  • JPY¥ is little changed 0.111% against the USD$ in after hours to 108.38

Commodities

  • WTI Crude is up 2.23% to USD$52.28/bbl with the Brent-WTI spread up USD$0.61 to USD$10.1/bbl
  • Gold is up 0.62% to USD$1341.9/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
American Airlines Group Inc Industrials 32.1 6.40%            3,423,178
CF Industries Holdings Inc Materials 43.3 4.71%                641,158
Walt Disney Co/The Communication Services 112 4.44%            2,950,177
Cimarex Energy Co Energy 73.3 4.21%                483,248
United Continental Holdings Inc Industrials 81 3.96%            1,350,609
 
Underperformers Sector Price 1D % Chg Volume
Monster Beverage Corp Consumer Staples 54.7 -5.43%            1,843,802
Twitter Inc Communication Services 33 -3.04%            4,234,296
Eli Lilly & Co Health Care 117 -2.97%            2,579,160
Alexion Pharmaceuticals Inc Health Care 112 -2.83%                617,703
Ball Corp Materials 49.3 -2.52%                491,388

 

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