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Battle Stations! Trade war back on! US threatening tariff hike this Friday, shattering the recent global markets calm

May 06, 2019

Actionable and Transparent Quantitative ResearchActionable and Transparent Quantitative Research
Actionable and Transparent Quantitative ResearchActionable and Transparent Quantitative Research

 

 

Market data as of 7am EST

US Stocks Preview Ahead of the Open

  • US futures are cratering this morning in the wake of President Trump's threat to hike tariffs, risk-off rules in pre-market trading with front-month Dow Jones minis -1.78%, S&P 500 minis -1.65% and Nasdaq 100 minis -2.07%
  • President Trump tweeted yesterday that he may hike tariffis to 25% this Friday on $325 billion of Chinese exports given what he sees as a lack of progress in talks
  • China seems to have been caught off guard-it plans to bring 100+ people in its delegation this week in Washington, a sign it believes a deal can be reached-or perhaps thought, until the tweets
  • Most global markets are lower this morning on reborn trade fears
  • We launched our WARREN BUFFET FUND and CNBC.com wrote about itThese are the stocks Warren Buffett would buy if he were a quant
  • Euro-area Composite PMI came at 51.5 fro April, another positive data point following those from last week, leading analysts to say the Euro economy could be bottoming out
  • The very best US LARGE-CAPsMay's Plays: These US LARGE-CAP TOP PICKS are what your portfolio needs NOW!
  • Oil is weaker to start the week, down over 1% with WTI trading ~$61.25
  • The VIX is little changed this morning and is currently at 13.21 after closing at 12.87 last week
  • Nio Inc (NIO) June 21 OTM Calls, Cenovus Energy Inc. (CVE) June 21 OTM Calls and iShares MSCI Emerging Markets ETF (EEM) 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 -1.64 basis points to 2.525%
  • The US Treasury 2s-10s Spread has narrowed 0.46 basis points to 0.19%
  • WTI Crude is currently little changed 0.21% to USD$61.94/bbl with the Brent-WTI spread down USD$-0.86 to USD$8.82/bbl
  • Gold is currently little changed 0.22% to USD$1281.96/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

  • Berkshire Hathaway (BRK) had its annual meeting this year and CEO Warren Buffett found himself on the defensive.  Berkshire Hathaway has trailed the S&P 500 for 10 years, a stretch that has never happened before.   Buffett is a big supporter if index investing and many were wondering if it might be better to buy an index fund as opposed to Berkshire Hathaway given the underperformance.  Buffett assured investors they should stick with him, assuring investors that performance will return.  Berkshire Hathaway is not rated in our Global Top Stock Ideas.
  • Chesapeake Lodging Trust (CHSP) will be acquired by Park Hotels & Resorts (PK) in a $2.7 billion cash and stock deal.  Park Hotels is paying a combined $31 per share for Chesapeake, an 8% premium to Friday’s close.   The deal will make Park Hotels the second largest lodging investment trust in the market.  Chesapeake will sell 5 hotels before the deal complete, leaving the new company with 66 hotels in 17 states.  Chesapeake Holdings is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  Park Hotels & Resorts is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas
  • Kraft Heinz (KHC) said it will need to restate its financial results for 2016, 2017 and 2018 after finding employee misconduct in the procurement process.  The misconduct caused the cost of goods to be inflated.  Kraft Heinz said the restatements will results in adjustments of less than 2%.  Kraft Heinz said its investigation is complete and there was no evidence that senior managers were involved.  Kraft Heinz is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas
  • Shake Shack (SHAK) reported sales growth that beat expectations and upped guidance.  Shake Shack first quarter same store sales grew 3.6%, well ahead of the 0.8% growth expected.  Revenue of $132 million beat $127 million expected.  Second quarter revenue guidance was hiked to $576 million to $582 million, up from $570 million.  Shake Shack is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Sysco (SYY) reported fiscal third quarter adjusted earnings that beat consensus.  Sysco reported fiscal third quarter adjusted EPS of 79 cents, beatings consensus of 70 cents.  Fiscal third quarter revenue of $14.7 billion trailed $14.77 billion.  Sysco is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas
  • Tesla Inc. (TSLA) shares traded higher after the company announced plans to raise roughly $2 billion of capital through debt and stock offerings. Tesla filed on Thursday to sell $1.35 billion in convertible debt notes and $650 million in equity shares. Dan Ives of Wedbush Securities explained that, “We view this as a clear net positive for Tesla.” Tesla is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Walt Disney (DIS) saw another strong weekend for its latest Avengers movie, “Averngers: Endgame.”  Disney saw total ticket sales pass the $2 billion mark, the first for a film in such a short amount of time.  It took just 11 days to hit that mark.  The last film to hit that mark took 47 days, it was “Avatar.”  This is the fifth movie to surpass $2 billion is ticket sales.  Walt Disney is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  

Global Information Technology and Communication Services Stocks Trending in the News

  • Activision Blizzard (ATVI) delivered first quarter earnings that beat expectations.  Activision Blizzard posted first quarter adjusted EPS of 31 cents versus 26 cents expected.  Adjusted revenue of $1.26 billion slightly beat consensus of $1.23 billion.  Activision Blizzard gave EPS guidance for the second quarter of 23 cents well below consensus of 37 cents.  Full year EPS guidance given was ~$2.10, below consensus of $2.19.  Activision Blizzard is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • Boeing (BA) limited the role of its own pilots in the final stages of approval for the 737 Max, according to the WSJ.  Boeing’s pilots were not aware of key functioning of the MCAS system implicated in its 2 crashes.  The lack of involvement by Boeing’s own pilots in the final stages is raising eyebrows and sure to gain more scrutiny from regulators.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas

Global Commodities & Energy Stocks Trending in the News

  • Occidental Petroleum (OXY) increased the cash portion of its bid for Anadarko Petroleum (APC) to 78% from 50% as it seeks to sweeten its offer.   Occidental Petroleum is looking to break up the deal Anadarko agreed to with Chevron (CVX).  Occidental said agreed to pay the $1 billion break-up fee that Anadarko will have to pay if it breaks off its deal with Chevron.  Anadarko said it will review the revised offer, but it reaffirmed its recommendation to shareholders to accept the Chevron offer. Anadarko Petroleum is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.  Occidental Petroleum is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Chevron is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
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International Stock Markets Recaps

  • The Euro Stoxx 600 is currently down -1.46%, the FTSE 100 is higher by +0.4%, the DAX is down -1.93%, and the CAC 40 is down -2%
  • Telecommunications (-0.26%), Media (-0.68%), and Food & Beverage (-0.7%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-3.24%), Technology (-2.23%), and Construction & Materials (-2.18%) 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 0.01x
  • 56 stocks in the Euro Stoxx 600 are at 4-week highs while 69 stocks are at 4-week lows
  • 66 stocks in the Euro Stoxx 600 are overbought while 12 stocks are 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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