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Oh What a Relief! Mexico avoids US tariffs with immigration deal, global markets pop champagne and rally

Jun 10, 2019

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Market data as of 7am EST

 

US Stocks Preview Ahead of the Open

  • The resolution of the trade dispute with Mexico (for now) is animating global markets which are higher this morning with front-month Dow Jones minis are +0.48%, S&P 500 minis +0.43% and Nasdaq 100 minis +0.56%
  • The US and Mexico came to an agreement that will avoid the US tariffs on Mexico that were due to start today
  • Treasury Secretary Steve Mnuchin said the "main progress" on talks with China will occur when President Trump meets with President Xi at the G-20 summit in Japan
  • Citigroup published a strategy note saying the S&P500 is heading for a "full scale bear market"
  • Emerging Markets ETFs saw the sixth week of outflows with $7 billion exiting them over the past week
  • UK manufacturing fell 3.9% in April, with vehicle production plummeting 24%
  • The VIX is little changed this morning and is currently at 16.12 after closing at 16.3 last week
  • SPDR S&P 500 ETF Trust (SPY)  June 10 OTM Calls & Puts, iShares Russell 2000 ETF (IWM) June 29 OTM Puts and Cloudera (CLDR) June 18 OTM Puts are the most actively traded options in today's pre-market
  • US 10-Year Treasury Bonds are lower with yields up 5.88 basis points to 2.1397%
  • The US Treasury 2s-10s Spread has widened 1.67 basis points to 0.25%
  • WTI Crude is currently up 2.66% to USD$53.99/bbl with the Brent-WTI spread down USD$-2.66 to USD$10.24/bbl
  • Gold is currently down -0.94% to USD$1328.29/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

  • Caesars Entertainment Group (CZR) in talks and close to a deal to combine with rival Eldorado Resorts Inc (ERI), according to press reports.  Caesars and Eldorado are trying to finalize a cash and stock offer that would result in Eldorado running the combined entity.  Caesars is one of the largest casino operators with over 50 casinos in 13 states.  Caesars has a market cap of $6 billion with $9 billion in debt while Eldorado has a market cap of $4 billion with debt of $3 billion.  No comment from either company.  Caesars is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.   Eldorado Resorts Inc is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Tyson Foods (TSN) has recalled more than 190,000 pounds of chicken fritter products, according to the USDA.   The chicken in questions was shipped to food service institutions and not sold through retail outlets.  Customers reported finding pieces of plastic in some chicken fritter bags.  Tyson Foods is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.

Global Information Technology Stocks Trending in the News

  • Alibaba (BABA) has chosen China International Capital Corporation (SEHK:3908) and Credit Suisse Group (SWX:CSGN) to lead its listing in Hong Kong, Bloomberg reports.  Alibaba has not finalized a fundraising target and press reports are that it could reach $20 billion.  A listing that size would be the largest in Hong Kong since 2010.  Alibaba is said to be preparing a formal listing filing for the next few weeks.  Alibaba is rated “Attractive” in our China All-Cap Global Top Stock Ideas.  China International Capital Corporation is rated “Unattractive” in our China All-Cap Global Top Stock Ideas.  Credit Suisse Group is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Analog Devices (ADI) was upgraded 2 notches by Goldman Sachs to buy from sell.  Analog Devices saw its price target hiked to $114 from $101.  Analog Devices will see rising gross margins from the $100 million in cost synergies expected from its cost reduction efforts.  Goldman sees the end of the cyclical correction approaching.  Analog Devices is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Dish Network (DISH) and AT&T’s (T) DirecTV are opening to a merger, according to a Bloomberg report.  Dish and DirecTV tried to combine 17 years ago but the FCC and Justice Dept would not approve the deal.  Since then a flood of competitors have sprouted and the concentration of market share of a proposed merger would be a shadow of what it was 17 years ago.  Both are losing subscribers in droves.  Neither has made a comment on the report.  Dish Network is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  AT&T is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Insys Therapeutics (INSY) filed for bankruptcy under the weight of opioid-related liabilities.  Insys recently agreed to a large settlement with the government over its probe into its sales practices.  Insys said the move will allow it to devise a plan to pay its liabilities and maximize value for shareholders.  Insys is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.
  • Microsoft (MSFT) will test its new videogame-streaming project in October.  Microsoft said the testing phase will allow users to stream any X-Box game to a mobile device, though Microsoft did not say which device(s).  At a press conference Microsoft showed 60 games it said will initially be able to be streamed.  Microsoft 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
  • Salesforce.com (CRM) has agreed to acquire Tableau (DATA) in an all-stock deal valued at $15.3 billion.  Salesorce.com is making the acquisition to bolster its data analytics offerings.  Salesforce.com is paying a 42% premium to Tableau’s Friday closing.  Tableau will continue to be run separately and remain based in Seattle.  Salesforce.com said the deal will cut earnings this year by 37 to 39 cents to $2.51 to $2.53.  Salesforce.com is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  Tableau is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • American Airlines (AAL) is considering acquiring Airbus’ (ENXTPA:AIR) proposed A321XLR as its long-haul single-aisle aircraft.  American would replace its fleet of aging 757-200s in what would be a blow to Boeing (BA).  American is evaluating the plane and as the largest airline in the world carries a lot of weight with its decisions.  Boeing is focused on getting the 737 Max back in the air and has not made any 757 related product decisions.  American Airlines is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.   Airbus is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Boeing is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.   
  • FedEx (FDX) said it would not renew its air cargo contract with Amazon (AMZN) and instead focus on “serving the broader e-commerce market.”  FedEx makes the move as Amazon moves farther into FedEx’s market.  Amazon has created Amazon Air to serve its own needs.  The contract with Amazon expires at the end of this month.  The move by FedEx was a surprise for the market.  FedEx is rated "Unattractive" in our US Large-Cap Global Top Stock Ideas and " Top Buy" in our US Industrials 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.   
  • United Technologies (UTI) and Raytheon (RTN) are merging in what will create the world’s second largest aerospace and defense company.  The deal will be an all-stock merger.  United Technologies recently existed the elevator business and is fully focused on defense now.  The combined company will have a market cap of over $100 billion. With annual revenue of over $74 billion.  United Technologies is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.  Raytheon is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.   

Global Financials Stocks Trending in the News

  • Apollo Global Management (APO) is in the lead to acquire Shutterfly (SFLY), according to a report in Reuters.   Reuters said the deal values Shutterfly at more than $2 billion though did not mention an acquisition price.  Reuters added that a deal could be announced as early as next week.  Apollo Global Management is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.  Shutterfly is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.

Global Power & Commodity Stocks Trending in the News

  • PG&E (PCG) cut electric to a resort area this weekend to avoid wildfires from its transmission lines.  PG&E had warned it would cut electric when the National Weather Service issues a red-flag warning that indicates a high chance of a wildfire due to dry conditions.  PG&E cut power to 22,000 customers who were forced to rely on generators.  PG&E is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas

 

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International Stock Markets Recaps

  • The Euro Stoxx 600 is currently up +0.13%, the FTSE 100 is higher by +0.43%, the DAX has risen +0.77%, and the CAC 40 is up +0.22%
  • Utilities (-0.67%), Banks (+0.67%), and Basic Resources (+1.04%) stocks are the top performers in the Euro Stoxx 600 today
  • Retail (+0.5%), Health Care (-0.02%), and Construction & Materials (-0.04%) 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 0.92x
  • 128 stocks in the Euro Stoxx 600 are at 4-week highs while 26 stocks are at 4-week lows
  • 20 stocks in the Euro Stoxx 600 are overbought while 11 stocks are oversold according to the 16-day RSI Measure
  • The Nikkei 225 finished up +1.2%, the Hang Seng ended up +2.27%, the Hang Seng China Enterprise up +1.86%, and the CSI 300 was +1.29%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 6.5x
  • 14 stocks in the Nikkei 225 hit 4-week highs while 4 stocks reached 4-week lows
  • 2 stocks in the Nikkei 225 closed overbought while 4 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished positive with the advance/decline ratio for the Hang Seng closing at 24x
  • 0 stocks in the Hang Seng hit 4-week highs while 12 stocks reached 4-week lows
  • 1 stock in the Hang Seng closed overbought while 5 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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