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He Said, Xi Said: Trump says will meet with Xi, predicting talks will be "very successful"; Futures higher on news

May 14, 2019

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Market data as of 7am EST 

 

US Stocks Preview Ahead of the Open

  • President Trump's comments on meeting with President Xi at the G-20 have helped sentiment this morning with US futures are higher pre-market with front-month Dow Jones minis +0.69%, S&P 500 minis 0.89% and Nasdaq 100 minis +1.08%
  • President Trump said he plans to talk to China's President Xi when the 2 are at the G-20 Summit in Osaka, Japan in late June
  • Trump said he expects the talks will be "very successful" which animated European investors, sending markets there higher
  • Still, the US in preparing further tariffs on the $300 billion of Chinese imports that do not have tariffs yet
  • More on US-China: Sabers Rattle and Tariffs Fly - The latest in the US-China trade fight
  • Oil is higher this morning after Saudi Arabia said it suffered drone attacks at two of its pumping stations forcing it to suspend operations there as it assesses the damage
  • Multiple Federal Reserve officials have commented on potential fallout for the US economy from the trade war with China, 
  • Sell in May?Sell in May and Go Away? SPY Has Seen Outflows Every Day in May!
  • Looking at iron ore: The Ore Score: What in the World is going on with Iron Ore?
  • Our Top ETF ideas this week: Top ETF Ideas for the Week: Models Favor Small-Caps
  • The VIX is moving down this morning and is currently at 19.22 after closing at 20.55 yesterday
  • iShares MSCI Emerging Markets ETF (EEM) June 21 OTM Puts, SPDR S&P Oil & Gas Exploration & Production ETF (XOP) May 17 OTM Calls and iShares 7-10 Year Treasury Bond ETF (IEF) June 21 OTM Puts are the most actively traded options contracts in US pre-market trading this morning
  • US 10-Year Treasury Bonds are lower with yields up 0.89 basis points to 2.4104%
  • The US Treasury 2s-10s Spread has widened 0.69 basis points to 0.22%
  • WTI Crude is currently down -1.01% to USD$61.04/bbl with the Brent-WTI spread up USD$2.62 to USD$11.12/bbl
  • Gold is currently little changed -0.17% to USD$1297.68/oz

Stocks Trending in the News

 

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Global Consumer Stocks Trending in the News

  • Coca-Cola (KO) has a “clearly superior” growth outlook when compared to other consumer packaged goods companies, according to Morgan Stanley.   Coca-Cola was upgraded to overweight from equal-weight while its price target was hiked to $55 from $52.  Coca-Cola has “morphed into a structurally higher growth company” compared with its peers, Morgan Stanley adds.  Coca-Cola is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas
  • Ralph Lauren (RL) reported fiscal fourth quarter earnings that beat consensus.  Ralph Lauren reported fiscal fourth quarter adjusted EPS of $1.07, beating consensus of 90 cents.  Ralph Lauren boosted its quarterly dividend to 68.75 cents, up from 62.5 cents.  Total sales rose 1% in the quarter.  Ralph Lauren sees sales growth for fiscal 2020 of 2% to 3% in constant currency.  Ralph Lauren 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 (TSLA) is suffering in the US-China trade spat.  While cars are not on the list if imports being slapped with tariffs by China, many fear the day that will happen is getting close.  Analysts fear the next move on tariffs by China will include cars.  China broke ground on a battery factory in China early in the year any disruption between the countries is already negative, tariffs on their imports of cars would be disastrous.  Tesla is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Walmart (WMT) announced it will offer 1-day delivery on many of its most popular items, matching Amazon’s (AMZN) new offering.  Walmart said going to a 1-day service will actually save it money by streamlining shipping.  Amazon, in contrast, said it will spend $800 million to completely roll out its 1-day delivery.  Walmart’s service starts in Phoenix and will be rolled out to the rest of the country.  Walmart is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.  Amazon 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

  • Alphabet’s (GOOGL) Google is opening the Google Safety Engineering Center in Munich.  Google is creating a $10 million grant fund to hand out grants to groups focused on tackling hate and extremism.  Google will double the number of privacy engineers at the center to 200 making Munich a hub for privacy engineering.  Alphabet is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Apple (AAPL) suffered a setback at the Supreme Court today.  The Supreme Court ruled that consumers can move ahead with their case against Apple alleging that it used its market dominance to artificially inflate prices at its App Store.  Apple will now be under further pressure to cut its 30% commission it charges sellers on its App Store.  Consumers are seeking hundreds of millions of dollars in damages in the case.  Apple is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Facebook’s (FB) WhatsApp is encouraging users to update their software to the most recent version after finding a vulnerability in the software.  Facebook said it found a vulnerability that could allow hacking into it using commercially available software from Israel.  Tracking software can be installed on a phone with the vulnerability.  Facebook is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Take-Two Interactive (TTWO) reported fiscal fourth quarter earnings that beat consensus.  Take-Two reported fiscal fourth quarter of 78 cents, beating consensus of 74 cents.  Take-Two gave full year EPS guidance of $3.75 to $4.00, well below consensus of $4.84 and full year adjusted revenue of $2.5 billion to $2.6 billion, below consensus of $2.76 billion.  Take-Two Interactive is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Tencent Music (TME) reported earnings that beat consensus.  Tencent Music reported first quarter adjusted EPS of 72 RMB cents, beating 70 RMB cents consensus.  First quarter revenue of 5.74 billion yuan, below 5.8 billion consensus.  Tencent Music reported 654 million online music MAUs.  Tencent Music is rated “Neutral” in our China All-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Bayer (DB:BAYN) suffered a huge defeat in a Roundup case in California.  A jury in California awarded $2.055 billion when it ruled Bayer’s Roundup was responsible for the couple’s cancer.  This is the third defeat for Bayer in court and shareholders are revolting over its acquisition of Monsanto that brought with it 13,400 Roundup cases.  Bayer Interactive is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas
  • Deere & Co (DE) was downgraded to underweight from neutral at JP Morgan.  Deere also saw its price target dropped to $132 from $154 at the same time.  The new price target implies a 10% downside to the last price.  JP Morgan said the fundamentals of the US agro-business is rapidly deteriorating.  Deere & Co. is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.  

Global Healthcare Stocks Trending in the News

  • Insys Therapeutics (INSY) saw its price target slashed to $1 from $11 at Janney Montgomery.  Insys said it may need to file for bankruptcy in the wake of so many settlements for its sale of opioids.  Insys said it may not be able to complete the $150 million settlement it agreed to with the US Justice Department.  Insys is rated “Unattractive” in our SMID-Cap Global Top Stock Ideas
  • Mylan NV (MYL) is poised to bounce back after it hit a 7-year low, according to a note from Bernstein.  Mylan should be able to hit its guidance for 2019.  Bernstein noted the first quarter is normally a seasonally weak time so the weakness seen in its results is not the main concern.  A lack of strategic direction for Mylan is the main concern.   Mylan is rated “Unattractive” in our Large-Cap Global Top Stock Ideas

 

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International Stock Markets Recaps

  • The Euro Stoxx 600 is currently up +0.7%, the FTSE 100 is higher by +0.85%, the DAX has risen +0.5%, and the CAC 40 is up +1.08%
  • Basic Resources (+1.48%), Retail (+1.3%), and Automobiles & Parts (+1.22%) stocks are the top performers in the Euro Stoxx 600 today
  • Real Estate (-0.18%), Utilities (+0.25%), and Travel & Leisure (+0.25%) 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 5.06x
  • 24 stocks in the Euro Stoxx 600 are at 4-week highs while 322 stocks are at 4-week lows
  • 8 stocks in the Euro Stoxx 600 are overbought while 75 stocks are oversold according to the 16-day RSI Measure
  • The Nikkei 225 finished down --0.59%, the Hang Seng ended down -1.5%, the Hang Seng China Enterprise declined -1.53%, and the CSI 300 was -0.64%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.65x
  • 11 stocks in the Nikkei 225 hit 4-week highs while 103 stocks reached 4-week lows
  • 3 stocks in the Nikkei 225 closed overbought while 68 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 0.32x
  • 1 stock in the Hang Seng hit 4-week highs while 22 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 8 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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