US futures lower, anemic German Manufacturing PMI weighs on sentiment, as slowdown fears build
Mar 22, 2019
Market data as of 7am EST
US Stocks Preview Ahead of the Open
- US stocks index futures are trending lower this morning on weak German data, with front-month Dow Jones minis -0.42%, S&P 500 minis -0.40% and Nasdaq 100 minis -0.34%
- Germany reported Manufacturing PMI that cratered to 44.7, well below the 48 consensus as its economic contraction worsens
- The yield on Germany's 10-year bond, the benchmark of the EU, fell to 0% in the wake of the weak economic reading
- In the wake of the Fed announcement, President Trump said he hopes the Fed won't feel the need to raise rates anymore in 2019
- In the US today, investors will get data on US Manufacturing PMI which is expected to improve to 53.5 from 53
- US Services PMI is expected to come at 55.5, dropping from 56 in February
- US Home Sales are expected to grow 3.2% in February, better than the 1.2% drop in January
- UK PM Theresa May was given until April 12 by the EU to either get her proposal passed in Parliament of request a longer extension from the EU
- The VIX is little changed this morning and is currently at 14.05 after closing at 13.63 yesterday
- SPY SPDR S&P 500 ETF Trust March 22 & April 5 OTM Calls & Puts, GDX VanEck Vectors Gold Miners ETF May 17 Calls and Apple (AAPL) March 22 OTM Calls are the most actively traded options contracts in US pre-market trading this morning.
- US 10-Year Treasury Bonds are higher with yields down -4.64 basis points to 2.4905%
- The US Treasury 2s-10s Spread has narrowed 1.69 basis points to 0.11%
- WTI Crude is currently little changed 0% to USD$59.83/bbl with the Brent-WTI spread down USD$-1.58 to USD$6.64/bbl
- Gold is currently up 0.26% to USD$1312.71/oz
Stocks Trending in the News
Click name for Q-Factor breakdown, latest price details, more financial info and sentiment data.
Global Consumer Stocks Trending in the News
- Avon (AVP) are rising after the Wall Street Journals reports that Brazil’s Natura (NATU3) is in talks to acquire the company. Natura is discussing acquiring both the North American private-equity owned business as well as the London-based publicly traded business. Natura previously acquired the Body Shoppe. Avon announced a 10% cut in its workforce in January so a deal with Natura would not surprise the market. Avon is not rated in our Global Top Stock Ideas. Natura is rated “Top Buy” in our Brazil All-Cap Global Top Stock Ideas.
- Geely Automotive (SEHK:175) was upgraded to overweight from equal-weight at JP Morgan. Geely reported results that were in line with consensus, which for JP Morgan saw a pleasant surprise. JP Morgan said an aggressive new model pipeline should lead to market share gains over the coming year. Geely should be able to hike its dividend with the greater free cash flow it expects. Geely Automotive is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
- Nike (NKE) reported fiscal third quarter 2019 results that were generally in line. Nike fiscal third quarter EPS of 68 cents came above 65 cents consensus. Third quarter revenue of USD$9.61 billion trailed consensus of USD$9.65 billion. Nike’s CEO commented, “Our business momentum is being accelerated by our ability to scale innovation at a faster pace and expand new digital experiences around the world.” Nike is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
- Tiffany (TIF) reported fourth quarter results in line with consensus. Tiffany reported fourth quarter EPS of USD$1.67, matching consensus with revenue of USD$1.32, also matching consensus. Same store sales were flat (0%) with same store sales in Japan rising 3%, Americas 1% and the rest of the world flat. Tiffany is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
- Tesla (TSLA) is alleging that one of its Chinese engineers stole confidential information on its autopilot system and then left to join Chinese rival Xpeng Motors. Xpeng Motors in not being accused of any wrongdoing, with its CEO saying the company “plays by the rules.” He added a flow of talent between companies is normal given that both companies are innovators. Telsa is rated “Top Short” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
- Tyson Foods (TSN) is recalling 69,000 pounds of ready-to-eat chicken strips. Tyson Foods is recalling the chicken because they may contain pieces of metal. Tyson informed the US Department of Agriculture and they are coordinating the recall. Tyson Foods is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
Global Information Technology & Communication Services Stocks Trending in the News
- Facebook (FB) said the passwords of hundreds of millions of its users were visible to employees of Facebook because of a flaw. Facebook said that while reviewing security in January it found that these passwords were stored in a readable format, in violation of its own procedures, and has since been fixed. The passwords, Facebook assures, were not visible to the public. Facebook says it has not found any unauthorized access to or abuse of these passwords. Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
Global Financials Stocks Trending in the News
- BlackRock (BLK) is set to acquire French analytics firm eFront for about USD$1.3 billion, according to a report from Bloomberg. BlackRock will make the acquisition to expand private equity and real estate analytics for its clients, the report notes. BlackRock is looking to add eFront to its suite of analytic offerings for its institutional clients. BlackRock is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
- Wells Fargo (WFC) put out a statement of support for its CEO Tim Sloan after media reports that it was looking to replace him. Wells Fargo said the board of directors is fully supportive of Mr. Sloan, with its head saying, “rumors that Wells Fargo’s board reached out to potential CEO candidates are completely false.” A number of politicians have recently called for the ouster of Wells’ CEO. Wells Fargo is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
Global Industrial Stocks Trending in the News
- Boeing (BA) saw the first cancellations of orders for its grounded 737 Max-8 jet. Garuda Indonesia, the flag carrier of Indonesia is looking to cancel its order of 49 737 Max jets, saying passengers have lost confidence in the jet in the wake of the crashes. Garuda informed Boeing of its desire on March 14th. Boeing is rated “Attractive” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.
- Fedex (FDX) was downgraded to neutral from outperform at Daiwa Securities. Daiwa sees growing risks to its Ground margin being under pressure in a slowing economy. Express margins should continue to expand, Daiwa adds. A weak international freight environment adds to the concerns. Fedex is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.
- UPS (UPS) is considering launching a vaccination service in the United States. The service would include the dispatch of nurses to homes to administer vaccines to patients, Reuters is reporting today. Merck (MRK) is reportedly in discussions with USP about participating in the project. UPS’ head of healthcare logistics strategy made comments about the project. UPS is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas. Merck is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
Global Commodities & Power Stocks Trending in the News
- Murphy Oil (MUR) in exiting Malaysia, selling its assets there to PTT (PTTEP) of Thailand for USD$2.13 billion. Murphy Oil is exiting Malaysia to focus on opportunities in the United States. Murphy said it will use USD$750 million of the proceeds to fund the expansion of its activities in the US. Murphy Oil is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
- Petrobras (PBR) is looking to raise USD$10 billion from the sale of refineries and it accelerates its focus on crude production, Bloomberg reports. The state-run oil company of Brazil is looking to sell at least half of its refining capacity, its CEO said, and a more detailed plan is due in the coming months. Petrobras holds 98% of the crude processing capacity and its CEO argues Brazil would do better with competition in the sector. Petrobras is rated “Attractive” in our Brazil All-Cap Global Top Stock Ideas.
International Stock Markets Recap
- The Euro Stoxx 600 is currently down -0.46%, the FTSE 100 is down -0.85%, the DAX is down -0.41%, and the CAC 40 is down -0.83%
- Oil & Gas (-0.65%), Telecommunications (0%), and Basic Resources (-0.33%) stocks are the top performers in the Euro Stoxx 600 today
- Automobiles & Parts (-0.72%), Food & Beverage (-0.43%), and Utilities (+0.34%) stocks are the worst performers in the Euro Stoxx 600 today
- Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.22x
- 86 stocks in the Euro Stoxx 600 are at 4-week highs while 49 stocks are at 4-week lows
- 77 stocks in the Euro Stoxx 600 are overbought while 2 stocks are oversold according to the 16-day RSI Measure
- The Nikkei 225 finished up +0.09%, the Hang Seng ended up +0.14%, the Hang Seng China Enterprise declined -0.23%, and the CSI 300 was -0.08%
- Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 1.81x
- 33 stocks in the Nikkei 225 hit 4-week highs while 17 stocks reached 4-week lows
- 10 stocks in the Nikkei 225 closed overbought while 3 stocks closed oversold according to the 16-day RSI Measure
- Investor sentiment for Hong Kong stocks finished neutral with the advance/decline ratio for the Hang Seng closing at 1.17x
- 14 stocks in the Hang Seng hit 4-week highs while 1 stock reached 4-week lows
- 3 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