Risk-Appetite Redux: Trade and Growth Concerns return to the fore as investors wonder if market rebound got ahead of itself
Jun 12, 2019
Market data as of 7am EST
US Stocks Preview Ahead of the Open
- Risk-appetite is noticeably less today with President Trump's tweets - surprise, surprise - rattling markets' confidence, front-month Dow Jones minis are -0.22%, S&P 500 minis -0.23% and Nasdaq 100 minis -0.41%
- President Trump again turned his fire at the Federal Reserve, tweeting that interest rates are "way too high"
- Trump says HE is holding up trade agreement: Who's holding up the US-China trade deal? "It's me!" President Trumps says today
- President Trump threatens China if Xi does not meet him at the G-20: Trade War Trash Talk: If you don't meet me, more tariffs for you!
- Oil demand continues to soften amid less trade and weak car sales, WTI crude is off 2.4% this morning trading below $52
- The United States is set to report the month/month change in CPI for May at 8:30 AM today. Economists expect a m/m change of 0.10% in May compared to 0.30% reported prior.
- Protests in Hong Kong over the new law allowing for extradition to mainland China are growing as authorities fill the financial district with tear gas
- Positive Sentiment Report: No Discount Needed for THESE Top Buy Consumer Stocks Trending by Positive Sentiment
- Options Update: Energy Options Expensive with Fall In Crude Oil Prices. Chevron Notable Outlier
- Financials stocks options: Financial Stocks Options Look Cheap As Interest Rates Are Set To Drop
- Asia ETF Flows: Asia Aversion: Investors Remain Cautious of Asian Stocks and Find Opportunity in India and Australia
- The VIX is little changed this morning and is currently at 16.07 after closing at 15.99 yesterday
- The number of bullish newsletter writers are back near 50% after dropping as low as 42.7% as of last week according to Investors Intelligence. The rise this week snaps a 5-week decline in sentiment.
- SPDR S&P 500 ETF Trust (SPY) June 12 OTM Calls & Puts, Southwestern Energy Company (SWN) September 20 OTM Puts and Cloudera, Inc. (CLDR) June 18 OTM Puts are the most actively traded options in today's pre-market
- US 10-Year Treasury Bonds are higher with yields down -2.26 basis points to 2.1205%
- After the recent sell-off, the commodity prices are now trading at the lowest prices relative to the S&P 500 in almost 50 years! YTD, the ratio is down 6.2%.
- Gold is currently up 0.63% to USD$1335.2/oz
- The US Treasury 2s-10s Spread has widened 1.83 basis points to 0.23%
Stocks Trending in the News
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Global Consumer Stocks Trending in the News
- Dave & Buster’s (PLAY) reported first quarter earnings in line with revenue that trailed. Dave & Buster’s posted first quarter EPS of $1.13, matching consensus. First quarter revenue of $363.6 million, trailing consensus of $371.6 million. Dave & Buster’s sees full year revenue of $1.3 billion to $1.39 billion, below consensus of $1.4 billion. Dave & Buster’s is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
- GrubHub Inc. (GRUB) shares surged higher after a report from GeekWire indicates that Amazon (AMZN) will shut down its restaurant food delivery service Amazon Restaurants. The report finds that Amazon Restaurants will be discontinued on June 24th and that its workplace lunch delivery service Daily Dish will close on June 14th. Still, Bloomberg analyst Andrew Eisenson believes, “GrubHub will likely continue to lose share amid intense competition from Uber Eats and DoorDash.” GrubHub is rated “Top Short” in our US Large-Cap 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.
- Mattel (MAT) continues to be in the sights of MGA Entertainment, its closely held rival. MGA has been trying to merge with Mattel for some time and MGA’s CEO said he may consider a hostile takeover if Mattel does not respond to his latest moves. Mattel recently launched a film division as part of its turnaround and does not seem to be interested in any tie up with MGA and rejected its latest overtures. Mattel is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
- National Beverage (FIZZ) shares tanked after Business Insider reported on a new lawsuit that the company may be facing. The new lawsuit claims that National Beverage’s president claimed its sparkling water cans were free of BPA months before that was, in fact, the case to create positive buzz for the company. National Beverage had no comment on the story. National Beverage is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
- Tesla (TSLA) shareholders rejected new corporate governance measures that were put to a vote. Tesla’s board had proposed measures in April to give shareholders a greater say in company decisions. The moves came in the wake of the SEC accusing CEO Elon Musk of making misleading statements above Tesla’s plans to go private. The measures would have shortened directors’ terms and made it easier for shareholders to pass corporate measures. Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
- Volkswagen (XTRA:VOW3) and Ford (F) are near to completing an agreement to collaborate on self-driving cars, Bloomberg reports. The report notes that the majority of the points have been agreed to and a formal announcement could come as soon as July. The companies envision a comprehensive agreement that would create a global powerhouse in self-driving cars. Volkswagen is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Ford is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
Global Information Technology Stocks Trending in the News
- Apple (AAPL) is in talks to acquire Intel’s (INTC) modem unit, according to the website The Information. The news comes 2 months after Apple said it would stop using Intel’s modem in its products. Intel in turns said it would quit the business. Intel spent over a billion dollars trying to develop modems, to no avail. The last generation of iPhones used Intel modems but the next will not. Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas. Intel is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
- Cisco (CSCO) was downgraded to market perform from outperform at William Blair. Cisco will see increasing competition in the coming year and the tailwinds that helped this past year will disappear. William Blair sees “signs of tightening demand,” especially when compared to 2019. Cisco is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
- NXP Semiconductors (NXPI) was upgraded to overweight from equal-weight at Morgan Stanley. NXP saw its price target hiked to $114 from $99 as well. Morgan cites NXP’s attractive valuation and lower inventory levels. NXP’s valuation discount to its rivals is the biggest in its history, Morgan notes. NXP Semiconductors is not rated in our Global Top Stock Ideas
- Facebook (FB) announced a new paid research effort called Study. Facebook will compensate users who download the Study app and it will record what apps you use and how you use them. Facebook wants the data on its competitors and is willing to pay users for it. Facebook did not yet say exactly what the compensation would be. Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
Global Financial Stocks Trending in the News
- Deutsche Bank (DB: DBK) has told about 1,000 of its investment banking clients that they must provide more detailed information on ownership. Deutsche Bank is trying to close gaps in its compliance practices that were recently uncovered. Deutsche Bank has told these clients that failure to provide the requested documents will result in those clients being cut off. Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
Global Industrial Stocks Trending in the News
- Boeing’s (BA) 737 Max aircraft should be flying again by December, according to a senior FAA official. The comments were made in an interview at a safety conference in Germany. It is not possible to give an exact date given the nature of the work Boeing is doing but the official said December is very probable for the 737 Max return. Boeing is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.
International Stock Markets Recaps
- The Euro Stoxx 600 is currently down -0.38%, the FTSE 100 is down -0.69%, the DAX is down -0.39%, and the CAC 40 is down -0.56%
- Utilities (+0.11%), Banks (-1.2%), and Basic Resources (-0.86%) stocks are the top performers in the Euro Stoxx 600 today
- Retail (-0.3%), Health Care (+0.45%), and Construction & Materials (-0.92%) 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 0.48x
- 155 stocks in the Euro Stoxx 600 are at 4-week highs while 7 stocks are at 4-week lows
- 21 stocks in the Euro Stoxx 600 are overbought while 3 stocks are oversold according to the 16-day RSI Measure
- The Nikkei 225 finished down --0.35%, the Hang Seng ended down -1.73%, the Hang Seng China Enterprise declined -1.18%, and the CSI 300 was -0.76%
- Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.39x
- 43 stocks in the Nikkei 225 hit 4-week highs while 1 stock reached 4-week lows
- 4 stocks in the Nikkei 225 closed overbought while 0 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 0.02x
- 10 stocks in the Hang Seng hit 4-week highs while 0 stocks reached 4-week lows
- 1 stock in the Hang Seng closed overbought while 1 stock closed oversold according to the 16-day RSI Measure
*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio