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US stocks futures edging higher as investors continue to digest slew of global data and Brexit uncertainty

Mar 13, 2019

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Actionable and Transparent Quantitative ResearchMarket data as of 7am EST

US Stock Market Preview Ahead of the Open 

  • US stocks index futures are higher pre-market with front-month Dow Jones minis +0.09%, S&P 500 minis +0.17% and Nasdaq 100 minis +0.19% 
  • In the US the market will see PPI, Durable Goods and Construction Spending data released this morning giving investors further insight into the outlook of the US economy
  • Stock newsletter sentiment broke its 9-week streak of increases in bullish sentiment as reported by Investor Intelligence, with the reading falling to 52.4% from 52.9% this week 
  • China is leading the global push to ground the Boeing’s (BA) 737 Max in the wake of the most recent crash while the FAA has refused to order its grounding lacking proof of a problem 
  • The UK Parliament will vote today on whether or not to leave the EU without a deal after PM Theresa May’s most recent Brexit proposal was rejected by Parliament last night.  If the vote to leave without a deal fails, as expected, there will be another vote on Thursday to ask the EU for more time to come to an acceptable Brexit deal 
  • OPEC members are telling Wall Street players this week that if the US passes the law allowing it to sue OPEC-the so-called NOPEC law-them the first casualty will be shale producers because every member will maximize production, sending the price of oil lower 
  • The VIX is moving up this morning and is currently at 16.28 after closing at 13.77 yesterday
  • Eli Lilly (LLY) March 15 OTM Call, SPY March 13 OTM Calls & Puts, and Gerdau (GGB) March 15 & 21 OTM Calls & Puts are some of the most heavily traded options in the US pre-market this morning. 
  • US 10-Year Treasury Bonds are lower with yields up 1.98 basis points to 2.6213%
  • The US Treasury 2s-10s Spread has widened 0.76 basis points to 0.16%
  • WTI Crude is currently little changed 0.14% to USD$56.87/bbl with the Brent-WTI spread little changed USD$0.21 to USD$9.68/bbl
  • Gold is currently up 0.54% to USD$1308.61/oz

Stocks Trending in the News

 

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Global Consumer Stocks Trending in the News

  • Adidas (DB:ADS) gave growth guidance for 2019 that disappointed investors.  Adidas said sales growth will be no more than 5% in the coming year, down from 8% in 2018.  Sales in Europe will be flat with the popularity of its retro styles waning in 2019.  Adidas will have trouble supplying North America and expects sales growth of 1-2% in the region.  Adidas is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Carnival Corp. (CCL) was upgraded to buy from hold at Goldman Sachs.   Goldman cited an attractive valuation as compared to the S&P 500 as it raised the price target to USD$65 from USD$63.  Goldman said it sees accelerating net unit growth” that should “propel fundamentals.”  Carnival is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Inditex (BME:ITX), owner of Zara, reported operating profit that rose only 1% to 4.36 billion euros for 2018, coming below the 4.41 billion consensus.  Inditex was targeting same store sales growth of 4-6%.  Inditex saw greater competition in the fourth quarter and was forced to cut prices significantly to clear inventory.  Inditex is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Juventus (BIT:JUVE) soccer team saw its shares soar after it beat Spain’s Atletico Madrid to advance to the Champion’s Cup quarter final.  Cristiano Ronaldo scored 3 goals in the team’s 3-2 aggregate win.  Juventus rose 30% on news of the win.  Juventus is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.
  • Lumber Liquidators (LL) announced it has resolved the outstanding securities fraud investigation by the SEC and US Department of Justice.  Lumber Liquidators agreed to pay USD$33 million for filing a misleading statement to investors regarding its laminate flooring from dryer.  Lumber Liquidators is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Rite-Aid (RAD) announced its CEO is leaving the company as are 2 other senior executives amid poor performance for the company.  Rite-Aid also announced the closure of 400 stores, over a fifth of its stores.  Rite-Aid has struggled in recent years and the changes are designed to jump-start the company’s turnaround.  Rite-Aid is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology & Communication Services Stocks Trending in the News

  • Momo (MOMO) was upgraded to overweight from equal-weight at Morgan Stanley.  Momo also had its price target hiked to USD$44 from USD$33.  In the wake of Momo’s recent results, Morgan Stanley sees significant upside for average revenue per user in the coming year.   Average user time is at record levels in the first quarter and is expected to rise further.  Momo is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Roku (ROKU) was downgraded at Loop Capital to sell from hold.  Loop writes that the run-up in Roku has given it an “excessive valuation.”  Roku’s price target was maintained at USD$45.  Loop notes that while Roku could go from expensive to more expensive, it can no longer justify its hold rating, resulting in the downgrade to sell.  Roku is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Spotify (SPOT) has filed an anti-trust complaint with the European Union against Apple (AAPL).  Spotify is alleging that Apple is constantly changing the rules for third-party apps as well as charging a 30% tax on all third-party music apps that compete with Apple’s iTunes.  Spotify calls it an “untenable” situation and cites this as its reason for the complaint.  Spotify is not rated in our Global Top Stock Ideas.  Apple is rated “Neutral” 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

  • Wells Fargo (WFC) CEO Tim Sloan spent 4 hours in front of Congress today testifying in front of the House Financial Services Committee.   Lawmakers grilled him on the state of Wells Fargo with many expressing concern that the bank has not rectified all its problems.  Some even suggested Wells Fargo should be broken up, describing the bank as “too big to manage.”  Wells Fargo is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Boeing’s (BA) has seen more countries ground its 737 Max in the wake of the recent crash.  The FAA reiterated that the jet is airworthy, and no US airlines have stopped flying the planes.  The head of the FA in the US said, “Thus far, our reviews show no systematic performance issues and no basis to order the grounding of the aircraft.”  Boeing’s CEO spoke to President Trump yesterday, assuring him the 737 Max is safe.  Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Akorn (AKRX) rose sharply on speculation Baxter (BAX) would make a bid for the company amid the M&A activity in the sector recently.  Baxter, however, put out a statement saying it is not in talks with Akorn.  It added that it has no plans to make an offer for Akorn as had been reported.  Akorn is rated “Top Short” in our US SMID-Cap Global Top Stock Ideas.  Baxter is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

 

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International Markets Recap

  • The Euro Stoxx 600 is currently up +0.15%, the FTSE 100 is down -0.02%, the DAX is down -0.08%, and the CAC 40 is up +0.25%
  • Banks (+0.44%), Basic Resources (+0.54%), and Chemicals (+0.11%) stocks are the top performers in the Euro Stoxx 600 today
  • Personal & Household Goods (-0.02%), Food & Beverage (+0.16%), and Utilities (-0.16%) stocks are the worst performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is neutral with the advance/decline ratio for the Euro Stoxx 600 currently at 1.09x
  • 63 stocks in the Euro Stoxx 600 are at 4-week highs while 24 stocks are at 4-week lows
  • 38 stocks in the Euro Stoxx 600 are overbought while 12 stocks are oversold according to the 16-day RSI Measure
  • The Nikkei 225 finished down --0.99%, the Hang Seng ended down -0.39%, the Hang Seng China Enterprise declined -0.53%, and the CSI 300 was -0.83%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.17x
  • 36 stocks in the Nikkei 225 hit 4-week highs while 4 stocks reached 4-week lows
  • 10 stocks in the Nikkei 225 closed overbought while 1 stock closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished negative with the advance/decline ratio for the Hang Seng closing at 0.28x
  • 6 stocks in the Hang Seng hit 4-week highs while 0 stocks reached 4-week lows
  • 2 stocks in the Hang Seng closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure

 

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

  

 

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