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Apple results powering US futures higher, with US stocks set to open in record territory as investors await the Fed

May 01, 2019

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Market data as of 7am EST

 

US Stocks Preview Ahead of the Open

  • An upbeat forecast from Apple (AAPL) is likely to reignite tech stocks today as investors waiting for the Fed decision, futures are higher in pre-market trading with front-month Dow Jones minis +0.27%, S&P 500 minis +0.31% and Nasdaq 100 minis +0.68%
  • The Federal Reserve's FOMC will meet today and give its interest rate decision which the market believes will be no action 
  • Investors will be keen to hear from the Fed its outlook on the present muted inflation environment as well as its growth outlook
  • Most global stock markets are closed today for the May 1st Labor Day holiday
  • ADP Employment Change report is expected to report 180,000 jobs added
  • US Tech stocks are up 27%+ for 2019 and are drifting even higher this morning after Apple’s positive results 
  • Equity newsletter sentiment continues to inch higher, now sitting at a 7-month high according to Investors Intelligence
  • US Treasury Secretary Steve Mnuchin called the most recent talk with China "productive", read more on  US-China talks: US warships in Taiwan Straight can only mean one thing: US - China Trade Negotiations Resume this Week
  • Has the hour for small-caps arrived?  Don't Forget About Me! Small-Caps Have Trailed Their Big Brothers, But That May Soon Change
  • The VIX is little changed this morning and is currently at 13.21 after closing at 13.12 yesterday
  • SPDR S&P 500 ETF Trust (SPY) May 3, June 21 and December 20 OTM Puts and May 3 OTM Calls and iShares China Large-Cap ETF (FXI) June 21 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 -0.73 basis points to 2.4945%
  • The US Treasury 2s-10s Spread has narrowed 0.12 basis points to 0.23%
  • WTI Crude is currently up 0.65% to USD$63.91/bbl with the Brent-WTI spread little changed USD$-0.04 to USD$8.38/bbl
  • Gold is currently little changed -0.06% to USD$1282.74/oz

Stocks Trending in the News

 

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Global Consumer Stocks Trending in the News

  • Cengage (CNGO) and McGraw Hill will merge in an all stock deal that would create the second largest college textbook seller.  The new company, to be called McGraw Hill and trade under the ticker MHED, will have $3.2 billion in revenue and expects to wring $300 million in cost savings post-merger over 3 years.  The deal requires regulator approval and is expected to close early 2020.  Cengage is not rated in our Global Top Stock Ideas
  • Clorox (CLX) reported fiscal third quarter revenue and earnings were in line with consensus.  Clorox fiscal third quarter EPS of $1.44 came in line with $1.45 consensus.  Revenue of the third quarter of $1.55 billion came in line with $1.57 billion expected.  Clorox gave full year EPS guidance of $6.25 to $6.35, up from $6.20 to $6.40 previously.  Clorox expects sales growth of 2-3% for fiscal 2019.  Clorox is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas  
  • Hilton Worldwide Holdings (HLT) reported first quarter earnings above consensus with revenue in line.  Hilton first quarter adjusted EPS was 80 cents, ahead of 76 cents expected.  First quarter revenue of $2.2 billion matched consensus.  Hilton hiked full year EPS guidance to $3.74 to $3.84, up from $3.66 to $3.78.  Hilton Worldwide Holdings is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas  
  • Mondelez International (MDLZ) reported first quarter adjusted earnings that beat consensus.  Mondelez International posted first quarter adjusted EPS of 65 cents, beating consensus of 61 cents.  First quarter adjusted revenue of $7.02 billion came well above $6.55 billion consensus.  Mondelez International gave adjusted EPS growth guidance of 3%-5% for 2019 with organic net revenue growth of 2%-3%.  Mondelez International is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas
  • Molson Coors (TAP) reported earnings and revenue that trailed consensus.  Molson Coors first quarter underlying EPS was 52 cents, behind 58 cents consensus.  Revenue of $2.30 billion was a touch behind the $2.33 billion expected.  Molson reported a 4.7% drop in volume of beer sold worldwide.  Molson Coors is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas  
  • Tesla (TSLA) and the SEC have come to an agreement on the oversight of CEO Elon Musk’s tweet.  The two sides came up with a list of financial milestones the Musk is not allowed to tweet about.  The new deal has a list of specific items that Mr. Musk is not permitted to tweet about without first getting approval from Tesla lawyers.  The new deal has a list more extensive than the original deal signed by the parties.  Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Wynn Resorts (WYNN) was cleared by the state of Massachusetts to open a casino in the state in the wake of its sexual misconduct problems.  Massachusetts left in the place a $35 million fine related to the misconduct.  The approval contained a sharp rebuke of Wynn’s CEO’s response to the situation but did not thwart Wynn’s desire to open the casino.  Wynn Resorts is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Yum! Brands (YUM) reported first quarter earnings that came in line with sale growth that beat consensus.  Yum reported worldwide sales growth of 4%, well above 2.7% expected.  First quarter EPS of 82 cents came in line with 81 cents consensus.  Yum first quarter revenue of $1.25 billion matched consensus.  Yum saw its delivery initiatives bearings fruit in the quarter while Pizza Hut’s challenges remain.  Yum Brands is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas  

Global Information Technology Stocks Trending in the News

  • Advanced Micro Devices (AMD) delivered first quarter earnings and revenue in line.  AMD first quarter revenue of $1.27 billion matched consensus of $1.26 billion, growing 8%.  Adjusted EPS of 6 cents came a bit ahead if 5 cents expected.  AMD gave second quarter revenue guidance of $1.47 billion to $1.57 billion.  AMD is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. 
  • Apple (AAPL) reported fiscal second quarter earnings that beat consensus.  Apple first quarter EPS was $2.46, beating $2.36 consensus.  Apple saw revenue of $58 billion in the second quarter beating consensus of $57.49 billion.  Apple announced it would buy back $75 billion worth of stock.  Apple gave third quarter revenue guidance of $52.5 billion to $54.5 billion, well above consensus of $52.2 billion.  Apple said iPhone revenue dropped to $31.05 billion from $37.6 billion a year ago.  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 Industrial Stocks Trending in the News

  • L3 (LLL) reported first quarter earnings and revenue that beat consensus.  L3 first quarter revenue of $2.7 billion beat consensus of $2.52 billion.  EPS in the first quarter of $2.89 beat consensus of $2.49.  L3 gave full year revenue guidance of about $10.9 billion, below consensus of $11.06 billion with full year free cash flow expected to be $1.06 billion.  L3 is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas

Global Healthcare Stocks Trending in the News

  • Amgen (AMGN) reported earnings that beat expectations.  First quarter adjusted EPS of $3.56 beat consensus of $3.47.  Amgen first quarter revenue of $5.56 billion matched $5.57 billion consensus.  Amgen upped full year EPS guidance to $13.25 to $14.30, up from $13.10 to $14.30; full year revenue guidance is $22 billion to $22.9 billion.  Amgen is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • CVS Health Corp (CVS) reported first quarter earnings and guidance that beat consensus.  CVS delivered first quarter adjusted EPS of $1.62, ahead of $1.51 expected.  First quarter same store sales grew 3.8%, well above the 2.6% consensus.  First quarter revenue of $61.65 billion topped $60.24 billion consensus.  CVS gave bullish guidance, saying it sees full year EPS in the range of $6.75 to $6.90, up from $6.68 to $6.88.  CVS sees full year revenue of $251.2 billion to $254.4 billion, up from $249.9 billion to $254.3 billion.  CVS Healthcare is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Humana (HUM) reported first quarter earnings and revenue that beat consensus.  Humana posted first quarter adjusted EPS of $4.48, ahead of $4.29 expected.  Revenue in the first quarter was $16.11 billion, beating $15.76 billion consensus.  Humana hiked full year EPS guidance to $17.25 to $17.50, up from $17 to $17.50; present consensus is $17.45.  Humana is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas

 

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International Stock Markets Recaps

  • European (ex-UK) and Asian markets are closed for Labor Day today

 

 

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

 

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