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China prepares to weaponize rare earth metals and global risk-off intensifies

May 29, 2019

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Market data as of 7am EST

 

US Stocks Preview Ahead of the Open

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

  • Abercrombie & Fitch (ANF) reported same store sales that missed consensus with a loss that came better than expected.  Abercrombie & Fitch reported same store sales growth of 1% while consensus was for 1.4%.  First quarter adjusted loss per share of 29 cents came better than the 43 cents expected.  Abercrombie & Fitch sees second quarter same store sales growth of 0% to 2%.  Abercrombie & Fitch is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Capri Holdings (CPRI) reported fiscal fourth quarter margins and Kors same store sales both missed consensus.  Capri Holdings reported fiscal fourth quarter total operating margin of ~3% while its own forecast was for 10.3%, the main reason for the miss was the Jimmy Choo unit.  Kors same store sales fell 1%, worse than the 0.6% drop expected.  Capri cut 2020 revenue guidance to $6 billion from $6.1 billion.  Capri Holdings is not rated in our Global Top Stock Ideas.
  • Casino (ENXTPA:CO) of France has decided to cancel its dividend in the wake of S&P cutting their credit rating by 2 notches to B.   Casino entered into “safeguard” during which it has 6 months to come up with a restructuring plan.  S&P said it has significant concerns about the governance at Casino and cited that a main reason for the cut to its rating.   Casino is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Costco (COST) was downgraded to hold from buy at Gordon Haskett.  Costco’s price target was cut to $255 at the same time.  Costco’s recent price rise makes its present risk/reward scenario less compelling.  The average price target in the market today is $255.  Costco is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Dick’s Sporting Goods (DKS) reported first quarter adjusted EPS that beat while increasing guidance.  Dick’s reported first quarter adjusted EPS of 62 cents, beating consensus of 59 cents.  First quarter adjusted same store sales were flat, beating consensus of a 1.2% drop.  Dick’s hiked full-year EPS guidance to $3.20 to $3.40, up from $3.15 to $3.35.  Full year same store sale are expected to grow 0% to 2%.  Dick’s Sporting Goods is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • General Mills (GIS) was downgraded to sell from neutral at Goldman Sachs.  General Mills was downgraded due to “mounting deceleration concerns among investors.”  Goldman added that the benefits General Mills is seeing from management initiatives is peaking now, making the coming quarters questionable.  General Mills is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Walgreens Boots Alliance (WBA) is considering closing up to 200 stores in the UK, Skynews in reporting.  The plan being considered by Walgreens would see it close some stores when the lease us up and in other cases closes Boots stores in town with more than one.  Walgreens had no comment.  Walgreens Boots Alliance is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  

Global Information Technology Stocks Trending in the News

  • FireEye (FEYE) announced it is acquiring Verodin, a leader in cybersecurity validation procedures.  FireEye is paying $250 million in cash and stock.  The acquisition is expected to be accretive immediately.  FireEye is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas 
  • Netflix (NFLX) said it will pull its production out of the state of Georgia if its recently passed abortion law goes into effect.  The legislation will become law in 2020 if it survives and in the meantime,  Netflix will continue filming there.  Netflix said it will work with the ACLU and other groups to fight the law in court.  Netflix is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas     

Global Industrials Stocks Trending in the News

  • Boeing’s (BA) 737 Max problems were known to Ethiopian Airlines pilots well before the crash, Bloomberg reports.  Documents from the crash investigation show one pilot had commented “it will be a crash for sure” unless there is additional training for pilots to deal with multiple system warnings that can come with the new MCAS system that was implicated in the recent crashes.  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 Power & Commodies Stocks Trending in the News

  • ArcelorMittal (ENXTAM:MT) said it will cut steel production across Europe to cope with sagging demand and growing imports to Europe.  Arcelor is cutting production in Spain, France and Germany.  Arcelor said this would be a temporary measure to cope with weak demand.  ArcelorMittal is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Devon Energy (DVN) sold its Canadian assets to Canadian Natural Resources (TSX:CNQ) for C$3.8 billion.  The Devon assets being acquired are located in the main region where Canadian National, making it a perfect acquisition for Canadian National.  The assets in the deal are producing 113,000 barrels per day.  Canadian National said it expects to develop C$135 million in synergies once the deal in completed by the end of 2019.  Devon Energy is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Canadian Natural Resources is rated “Neutral” in our Canadian All-Cap Global Top Stock Ideas.

 

 

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International Stock Markets Recaps

  • The Euro Stoxx 600 is currently down -1.23%, the FTSE 100 is down -1.3%, the DAX is down -1.11%, and the CAC 40 is down -1.59%
  • Telecommunications (-0.51%), Utilities (-0.54%), and Real Estate (-0.59%) stocks are the top performers in the Euro Stoxx 600 today
  • Basic Resources (-2.36%), Technology (-1.9%), and Oil & Gas (-1.78%) 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 0.07x
  • 47 stocks in the Euro Stoxx 600 are at 4-week highs while 93 stocks are at 4-week lows
  • 21 stocks in the Euro Stoxx 600 are overbought while 42 stocks are oversold according to the 16-day RSI Measure
  • The Nikkei 225 finished down --1.21%, the Hang Seng ended down -0.57%, the Hang Seng China Enterprise declined -0.25%, and the CSI 300 was -0.23%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.21x
  • 21 stocks in the Nikkei 225 hit 4-week highs while 14 stocks reached 4-week lows
  • 5 stocks in the Nikkei 225 closed overbought while 38 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 0.35x
  • 1 stock in the Hang Seng hit 4-week highs while 13 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 10 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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