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Tech leads losses for US stocks as rate cut chances lessen after strong retail sales and industrial production readings

Jun 14, 2019

 

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US Market Snapshot

Stocks Trending in the News

 

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Global Consumer Stocks Trending in the News

  • Amazon (AMZN) responded to presidential candidate Joe Biden’s complaint about the taxes it pays by saying his complaints should be with the tax code, not with Amazon.  Amazon pointed out that it has paid $2.6 billion in corporate taxes since 2016, saying it pays “every penny” it owes.  Amazon said the US tax code is designed to encourage companies to reinvest and it has reinvested $200 billion into the American economy.  Amazon is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Beyond Meat (BYND) shares soared on a report one of its competitors is unable to meet surging demand for its meatless products.  Bloomberg reported multiple fast food chains that sell Impossible Burgers, a Beyond Meat rival, were experiencing shortages.  Beyond Meat is the best performing IPO of 2019, having risen more than 500%.  Beyond Meat is not rated in our Global Top Stock Ideas
  • Great Wall Motor (SEHK: 2333)Guangzhou Auto (SEHK: 2238), and other Chinese automobile manufacturers slid today after poor sales data in Hong Kong dragged on investor sentiment. This follows data from the Chinese mainland on Wednesday that showed a decline in car sales. Chinese May car sales of 1.91 million vehicles sold represents a 16.4% y/y decline. Great Wall Motor is rated “Neutral” in our China All-Cap Global Top Stock Ideas. Guangzhou Auto is not rated in our 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
  • 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.
  • Volkswagen (XTRA:VOW3) plans to offer up to 15% of its truck unit Traton AG in its upcoming IPO.  Traton will be offered between 27 and 33 euros.  Volkswagen hopes to raise up to 1.9 billion euros in the IPO.  Volkswagen is valuing Traton at about 16.5 billion euros.  Traton is the first of a number of divestitures Volkswagen is likely to undertake to unlock value.  Volkswagen is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Information Technology Stocks Trending in the News

  • Broadcom (AVGO) cut its revenue forecast for the full year as the trade war with China will negate the rebound it has hoped for in the second half of the year.  Broadcom ow expects full-year revenue of $22.5 billion, down from $24.5 billion.  The higher estimate was given just three months ago.  Broadcom’s CEO said customers are drawing down inventory amid the uncertainty.  Broadcom is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Corning (GLW) laid out a new growth strategy for investors today for 2020-2023.  Corning is targeting 6% to 8% compound annual sales growth focused on organic growth.  Corning is also targeting 12% to 15% compound annual EPS growth with strong sales growth, improving margins.  Corning expects dividends per share to grow 10% annually over the same period.  Corning is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • F5 Networks (FFIV) shares fell as much as 6.5% after Piper Jaffray said that VMWare’s (VMW) acquisition of Avi Networks may create challenges for the company. In a note to clients, Piper Jaffray analyst James E. Fish wrote, “We are concerned Avi Networks’ already fast shares gains will only accelerate under VMWare, and as such, negatively impact F5.” F5 Networks 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. VMWare is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Facebook (FB) shares rose following a report from the Wall Street Journal that the company plans to launch a digital currency to be unveiled next week. According to the Wall Street Journal report, about a dozen notables such as Visa, Mastercard, PayPal, and Uber have all agreed to back the company, each investing roughly $10 million. The companies that invested will all join a consortium responsible for governing the cryptocurrency, which is expected to be a stablecoin pegged to a basket of fiat coins. Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • IBM (IBM) demonstrated its debating program that used artificial intelligence and crowdsourced response to provide pro and con arguments about a subject.  IBM collected over 1,000 opinions on whether or not marijuana should be legalized.  Within an hour IBM’s Debater Program correlated them into coherent pro and con arguments.  The project is not ready for commercial use yet and is intended to help corporations in decision making.  IBM is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas
  • Sony (SNE) is being called upon to break itself up once again by activist hedge fund Third Point.  Third Point is again complaining that Sony’s stock is undervalued and breaking up the company could unlock value.  Third Point has a $1.5 billion position in the stock and said in a letter that Sony needs a less complex structure and should spin off its semiconductor unit.  Sony is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas.
  • Sprint (S) and T-Mobile (TMUS) are close to seeing their proposed merger approved by US authorities, with conditions, according to a report in the New York Times.  The main condition is the sales of certain assets that would permit the creation of a rival carrier.  Critics see the merger of Sprint and T-Mobile as bad for consumers as it would cut the number of national carriers to 3 from 4.  Sprint is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  T-Mobile is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Walt Disney Co (DIS) saw its price target hiked to $165 from $140 at Loop Capital.  Disney saw its buy rating reiterated.  Disney should see strong performance from its Disney+ streaming service and Loop expects its to perform better than the market is expecting.  Loop writes that it believes Disney will be successful in transforming itself into a direct-to-consumer video provider and will be revalued higher by the market.  Walt Disney is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology 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
  • UBS Group AG (SWX: UBSG) has reportedly asked Chief Economist Paul Donovan to take a leave of absence as the Swiss bank reviews controversial comments made by Donovan. Donovan reportedly made a reference to “Chinese pig” in an inflation report that sparked controversy on Chinese social media. Both UBS and Donovan have since apologized for the comments. UBS is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Commodities & Power Stocks Trending in the News

  • Ashland Global (ASH) was downgraded to neutral from overweight at JP Morgan.  Ashland saw its price target cut to $82, implying just 2.4% upside.  Eminence Capital has taken an 8.3% stake in Ashland and is seeking talks with the board to discuss “operational and strategic opportunities,” according to a 13-D filling.  They apparently do not include a merger or attempt to acquire a controlling stake.  Ashland Global is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas
  • Transocean (RIG) was downgraded to neutral from buy at Citi.  Citi cites intense cash burn at Transocean as well as the potential for an oversupplied market in 2020.  Citi is cautious on offshore drillers overall with all expected to see cash burn continuing into 2021.  Transocean is not rated in our Global Top Stock Ideas.
  • Vale (VALE) often did not have all the required stability certificates for its dams, a WSJ report highlights today.  Vale often did not have the full documentation for years and is presently investigating the stability of one of its dams in Canada.  In January, a dam collapsed at a Vale mine in Brazil, killing 270 people, a leading it to review all of its dams.  Vale is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas

Global Real Estate Stocks Trending in the News

  • Ashford Hospitality Trust (AHT) shares slid the most intraday in nearly a decade after cutting its dividend in half from $0.12/share to $0.06/share. CEO Douglas A. Kessler said in regards to the dividend cut, “For some time, our dividend has significantly exceeded what we would have needed to distribute form a taxable income standpoint. This adjustment effectively preserves capital for more advantageous purposes.” Ashford Hospitality Trust is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.

 

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US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 0.28 basis points to 1.83%
  • US 5-Year Treasury Bonds are higher with yields down -0.36 basis points to 1.83%
  • US 10-Year Treasury Bonds are higher with yields down -1.24 basis points to 2.08%
  • The US Treasury 2s-5s Spread has narrowed 0.64 basis points to 0%
  • The US Treasury 2s-10s Spread has narrowed 1.52 basis points to 0.24%
  • US Treasury 5s-10s Spread has narrowed 0.88 basis points to 0.25%

Currencies

  • EUR€ is down 0.612% against the USD$ in after hours to 1.1207
  • GBP£ is down 0.734% against the USD$ in after hours to 1.2581
  • CHF is down 0.527% against the USD$ in after hours to 1.0009
  • JPY¥ is up 0.157% against the USD$ in after hours to 108.55

Commodities

  • WTI Crude is up 0.44% to USD$52.51/bbl with the Brent-WTI spread up USD$0.47 to USD$10.4/bbl
  • Gold is little changed -0.07% to USD$1341.39/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
Facebook Inc Communication Services 149 2.27%            3,577,513
Ventas Inc Real Estate 60.6 2.22%                597,560
CF Industries Holdings Inc Materials 43.3 1.99%                382,188
Weyerhaeuser Co Real Estate 24.1 1.82%                917,047
Fortune Brands Home & Security Inc Industrials 42 1.79%                181,475
 
Underperformers Sector Price 1D % Chg Volume
F5 Networks Inc Information Technology 163 -5.66%                348,309
Broadcom Inc Information Technology 257 -5.59%            2,329,038
Noble Energy Inc Energy 22.7 -5.01%                877,576
Allergan PLC Health Care 153 -4.19%                471,951
IPG Photonics Corp Information Technology 126 -3.90%                134,962

 

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