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What trade war? Global markets rally, risk-on rules again today, as investors act like trade war was just a bad dream...

Jun 11, 2019

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Market data as of 7am EST

 

US Stocks Preview Ahead of the Open

  • Global markets are rising again today as risk-on returns in full effect, US futures are higher with front-month Dow Jones minis are +0.44%, S&P 500 minis +0.45% and Nasdaq 100 minis +0.60%
  • The US said it has "grave concerns" over the Hong Kong law that would allow extradition to mainland China, increasing pressure as more massive protests there are expected
  • The US has increased the presence of the US Coast Guard in the South China Sea in response to China's neighbor's requests for help with China's aggressive moves in waters these neighbors claim as theirs
  • There are 10 British Conservatives vying for Theresa May's job with Brexit as the main issue, as expected
  • Germany's gauge of investors views of the market (different than views on the broader economy) hit its lowest level since 2010 
  • President Trump threatens China again: Trade War Trash Talk: If you don't meet me, more tariffs for you! 
  • Financials stocks options: Financial Stocks Options Look Cheap As Interest Rates Are Set To Drop
  • Top Trending Stocks: Financials and Health Care at the Forefront of Top Trending Stocks by Positive Sentiment
  • SPDR S&P 500 ETF Trust (SPY)  June 10 OTM Calls & Puts, iShares MSCI Brazil ETF (EWZ) June 28 OTM Puts and iShares MSCI Emerging Markets ETF (EEM) August 16 OTM Puts are the most actively traded options in today's pre-market
  • The VIX is little changed this morning and is currently at 16.07 after closing at 15.94 yesterday
  • US 10-Year Treasury Bonds are lower with yields up 2.42 basis points to 2.1726%
  • The US Treasury 2s-10s Spread has widened 0.02 basis points to 0.25%
  • WTI Crude is currently down -1.35% to USD$53.26/bbl with the Brent-WTI spread up USD$1.56 to USD$10.17/bbl
  • Gold is currently down -0.42% to USD$1322.35/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

  • Beyond Meat (BYND) was downgraded to hold from buy at JP Morgan after its 572% rise in price.  JP Morgan was the lead underwriter in the IPO of Beyond Meat.  JP Morgan said in its downgrade that Beyond Meat shares are getting overvalued, with a $10 billion enterprise value and trading at 27 times 2020 sales.  JP Morgan insisted its call is just a valuation call.  Beyond Meat is not rated in our Global Top Stock Ideas.
  • Crocs (CROX) said it does not anticipate that the US-China trade war will have a material effect on its business.  Crocs said if the 25% tariffs were put in place it would take about a $5 million hit.  Crocs is working to reduce its exposure to China, it presently imports 30% of its production from China and that is expected to drop to 10% in 2020.  Crocs is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Hudson’s Bay (TSX:HBC), owner of Saks Fifth Ave, received a proposal from a group of its shareholders including its Chairman, to take the company private.  The group is offering C$9.45 per share, a 48% premium to Friday’s close, for a total value of about C$1.74 billion.  The group of shareholder represents 57% of outstanding shares of the Hudson’s Bay.  Hudson’s Bay has struggled to improve performance in recent years and has shed a number of assets.  Hudson’s Bay is rated “Attractive” in our Canada All-Cap Global Top Stock Ideas
  • Kraft Heinz (KHC) rose sharply after the company published its long-delayed 10-K and its restatements of results came in line.  Kraft Heinz completed its internal investigation over procurement issues and there were no additional surprises.  Its write-down of $15.4 billion did not change.  Kraft Heinz is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Lyft (LYFT) was upgraded to positive from neutral at Susquehanna.  Lyft saw its price target hiked to $80 from $57, implying a 41% upside for the stock.  Susquehanna sees a more rational competitive environment for Lyft going forward.  Lyft is not rated in our Global Top Stock Ideas.
  • Whirlpool (WHR) saw Italy scarp all its incentives after it announced it would close its plant in Naples, Italy.  The Italian government complained the Whirlpool has not lived been faithful to its agreement with the factory.  Italy will rescind the 15 million in incentives remaining, complaining the company already received 50 million euros of incentives since 2014.  Whirlpool is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas.

Global Information Technology Stocks Trending in the News

  • Apple (AAPL) said it has a back-up plan in the event the trade war with China drags on.  Apple’s primary manufacturer, Foxconn  (TSEC:2354), said it has capacity outside of China to produce all the iPhones that are destined for the United States.  China is where most of Apple’s products are made presently.  Foxconn said it is ready to support Apple in whatever move it needs to make.  Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Foxconn is not rated in our Global Top Stock Ideas.
  • Cree (CREE) cut its revenue and earnings guidance in the wake of the restrictions on Huawei exports.  Cree said it does not anticipate shipping any added products for Huawei’s build out and cannot say when shipments will resume.  Cree cut fiscal fourth quarter revenue guidance to $245 million to $252 million, down from $263 million to $272 million.  Cree now expects fiscal fourth quarter adjusted EPS of 8 to 12 cents, down from 12 to 16 cents.  Cree is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Intel (INTC) is acquiring networking startup Barefoot Networks.  Barefoot Networks is focused on networking chips, a part of the chip market where Intel does not presently compete.  Intel plans to scale up production at Barefoot to better compete in the market for managing traffic over ethernet.  Intel is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.
  • Symantec (SYMC) was downgraded to equal-weight from overweight at Morgan Stanley.  Symantec will see “increased competition and management turnover represent risks to Symantec’s turnaround.”  Symantec saw its price target cut to $14 from $23, its new price target is a market low.  Morgan sees further downside for the stock.  Symantec 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

  • Thermo Fisher Scientific (TMO) and Roper Technologies (ROP) announced they have terminated the deal in which Thermo Fisher was due to acquire Gatan, Inc, a subsidiary of Roper.  Thermo Fisher and Roper said they terminated the deal given the challenges in getting the deal approved by regulators in the UK.  The supply contract that was already in place in which Gatan supplies Thermo Fisher will remain intact.  Thermo Fisher Scientific is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  Roper Technologies is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.      

Global Health Care Stocks Trending in the News

  • CVS Health Corp. (CVS) may be about to see its acquisition of Aetna (AET) rejected by a federal judge, the NY Post is reporting.  Reports say the judge in the case appears to be leaning towards not approving the merger due to its effects on competition in the market. Oral arguments are to be heard July 17th and ruling is expected shortly thereafter.  The report cites individuals close to the case as its source.  CVS is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Aetna is not rated in our Global Top Stock Ideas.

 

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International Stock Markets Recaps

  • The Euro Stoxx 600 is currently up +0.87%, the FTSE 100 is higher by +0.48%, the DAX has risen +1.25%, and the CAC 40 is up +0.77%
  • Utilities (-0.29%), Banks (+0.79%), and Basic Resources (+2.8%) stocks are the top performers in the Euro Stoxx 600 today
  • Retail (+0.49%), Health Care (+1.35%), and Construction & Materials (+1.16%) 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 3.35x
  • 95 stocks in the Euro Stoxx 600 are at 4-week highs while 5 stocks are at 4-week lows
  • 14 stocks in the Euro Stoxx 600 are overbought while 4 stocks are oversold according to the 16-day RSI Measure
  • The Nikkei 225 finished up +0.33%, the Hang Seng ended up +0.76%, the Hang Seng China Enterprise up +0.89%, and the CSI 300 was +3.01%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 3.79x
  • 40 stocks in the Nikkei 225 hit 4-week highs while 0 stocks reached 4-week lows
  • 4 stocks in the Nikkei 225 closed overbought while 1 stock 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 2.57x
  • 7 stocks in the Hang Seng hit 4-week highs while 1 stock reached a 4-week low
  • 1 stock in the Hang Seng closed overbought while 2 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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