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Morning Brief

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Data Dump Day-Investors await US Inflation, ECB rate decision and Fed minutes like a kid waiting for their iPad

Apr 10, 2019

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Market data as of 7am EST

 

US Stocks Preview Ahead of the Open

  • European stocks are rising, Asian stocks were mixed overnight while US stock futures are rising pre-market with front-month Dow Jones minis +0.22%, S&P 500 minis +0.26% and Nasdaq 100 minis +0.21%
  • The IMF cut its global growth forecast to 3.3% from 3.5%, its third cut to growth in the last 6 months; this is the lowest expected growth since 2009
  • Read more on the IMF reportIMF sees more tortoise, less hare ahead; lowers global growth outlook for third time in its World Economic Outlook 
  • We look at the upcoming earnings season: As the 1Q Earnings Train Barrels Towards Us, We Take a Quick Look at Expectations
  • US CPI for March is expected to come at 0.40% this morning, above 0.2% of the prior month
  • The European Central Bank (ECB) is expected to leave rates unchanged
  • Uber is set to seek a $10 billion valuation in its upcoming IPO, making it the biggest IPO of the year thus far
  • The IMF has frozen Venezuela's access to $400 million of special drawing rights as the political chaos there intensifies
  • The VIX is little changed this morning and is currently at 13.93 after closing at 14.28 yesterday
  • SPDR S&P500 ETF (SPY) April 10 OTM Calls, SPDR S&P Oil & Gas Exploration & Production ETF (XOP) September  20 Puts and iShares MSCI EAFE ETF (EFA) May 10 OTM Puts are the most actively traded options contracts in US pre-market trading this morning.
  • US 10-Year Treasury Bonds are higher with yields down -0.18 basis points to 2.4988%
  • The US Treasury 2s-10s Spread has widened 0.83 basis points to 0.16%
  • WTI Crude is currently down -0.65% to USD$63.98/bbl with the Brent-WTI spread up USD$0.93 to USD$6.77/bbl
  • Gold is currently little changed -0.03% to USD$1303.72/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

  • Canada Goose (TSX:GOOS) announced it is opening 6 more stores around this world.  Canada Goose will open stores in Milan and Paris, in the US it will open a store in Minneapolis and in Canada it will open stores in Toronto, Edmonton and Banff.  Canada Goose presently operates 11 company stores.  Canada Goose is rated “Attractive” in our Canada All-Cap Global Top Stock Ideas.
  • Coty (COTY) commented on allegations against it, saying that plaintiff’s claims that Coty omitted certain information from its Schedule 14D-9 lack merit.  Coty said the legal analysis underlying the opinion is faulted and it intends to file the allegation in court.  Coty said similar suits will not be commented on if presented.  Coty is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Levi Strauss (LEVI) reported first quarter revenue growth of 7%, delivering $1.44 billion in revenue.  Levi Strauss reported first quarter EPS of 37 cents compared with a loss of 7 cents a year earlier.  Levi sees margins to remain flat or improve slightly.  Levi Strauss is not rated in our Global Top Stock Ideas.
  • Nordstrom (JWN) was upgraded to overweight from sector weight at KeyBanc.  Nordstrom shares have fallen 30% since November’s peak and KeyBanc thinks its weakness was “transient” and it “is undervalued at current levels.”  KeyBank notes the demand environment has improved since mid-March and it notes the strong growth in e-commerce expected.  Nordstrom is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Tesco (LSE:TSCO) updated guidance, saying it is on track to hit an operating margin of 3.5-4% for the current year.  Tesco is nearing the end of a 5-year turnaround plan in which it managed to cut $2 billion in costs from its operations.  Tesco is using its growing buying power to hold down costs and bolster profitability.  Tesco is rated “Neutral” in our United Kingdom All-Cap Global top Stock Ideas.
  • Under Armour (UAA) shares suffer after B. Riley FBR published a report saying the company fell in its annual athletic survey.  Under Armour continues to be a laggard behind larger competitors in the sector.  Under Armour got some good news when Texas Tech advanced to the NCAA finals (but lost), the first team sponsored by Under Armour in the tournament to do that.  Under Armour is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Alphabet’s Google (GOOGL) will be focused now on better monetizing Google Maps.  Maps is often called the least monetized asset in Google stable of units and they are looking to change that.  Maps is used regularly by over 1 billion people and Google is looking for ways to increase advertising there.  Analysts agreed there is a large opportunity and Google is committed to tapping it further.  Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  
  • Baidu (BIDU) was downgraded to perform from outperform at Oppenheimer while its $205 price target was removed.  Baidu will be weighed down by higher spending this year and Oppenheimer expects the stock to be range-bound until the end of the year.  The higher spending will benefit revenue only in 2020 and 2021, hence the reason for the downgrade.  Baidu is rated “Neutral” in our China All-Cap Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Goldman Sachs (GS) is returning to a business it has not touched in a decade-collateralized loan obligations (CLOs).  Goldman’s asset management unit GSAM has a platform called Battery Park to distributes deals to clients and is presently working on its first.  Demand has grown for CLOs and Goldman intends to increase its exposure there.  Goldman Sachs is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • American Airlines (AAL) issued a profit warning for the first quarter, saying the grounding of its 737 max fleet, as well as the government shutdown, is weighing on results.  American Airlines said revenue per seat will grow only 1%, down from 2% guidance.  Pre-tax margin will come between 2% and 4%, down from 2.5% to 4.5% guidance previously.  American Airlines is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas
  • Boeing (BA) saw the first month without an order for its 737 aircraft in over seven years.  The 737 Max is grounded worldwide in the wake of its second crash.  There are other models of the 737 for sale and none of them were bought by any airline this past month.  Boeing has accepted that its sensor caused the crash and has vowed to resolve the issue with the 737 Max.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas
  • Delta Airlines (DAL) reported first quarter EPS of 96 cents, beating consensus of 90 cents and beating its own guidance of 85-95 cents.  Adjust revenue grew 7.5% to $10.4 billion.  Delta sees second quarter EPS $2.05-$2.35 while consensus is $2.13.  Delta expects total adjusted revenue to grow 6-8% in the second quarter with adjusted TRASM up 1.5%-3.5%.  Delta Airlines is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas

Global Health Care Stocks Trending in the News

  • Indivior Plc (LSE:INDV) has been charged by the US with hiding the danger of the drug.  Indivior deceived doctors in the process, fueling the opioid epidemic in the US.  Indivior told doctors and US government health plans that its Suboxone Film was safe and not addictive, the lawsuit charges.  Indivior lost 75% of its value on the news  Indivior is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas and “Neutral” in our United Kingdom All-Cap Global top Stock Ideas. 

 

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International Stock Markets Recap

  • The Euro Stoxx 600 is currently up +0.25%, the FTSE 100 is higher by +0.08%, the DAX has risen +0.42%, and the CAC 40 is up +0.39%
  • Oil & Gas (+0.77%), Telecommunications (+0.32%), and Basic Resources (+1.02%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-0.31%), Food & Beverage (+0.29%), and Utilities (+0.35%) stocks are the worst performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.24x
  • 101 stocks in the Euro Stoxx 600 are at 4-week highs while 27 stocks are at 4-week lows
  • 36 stocks in the Euro Stoxx 600 are overbought while 5 stocks are oversold according to the 16-day RSI Measure
  • The Nikkei 225 finished down --0.53%, the Hang Seng ended down -0.13%, the Hang Seng China Enterprise declined -0.43%, and the CSI 300 was +0.26%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.18x
  • 21 stocks in the Nikkei 225 hit 4-week highs while 37 stocks reached 4-week lows
  • 12 stocks in the Nikkei 225 closed overbought while 5 stocks 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 0.39x
  • 13 stocks in the Hang Seng hit 4-week highs while 2 stocks reached 4-week lows
  • 14 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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