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Which way is up? Global markets directionless in week dominated by Central Bank interest rate decisions

Jun 17, 2019

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Market data as of 7am EST

 

US Stocks Preview Ahead of the Open

  • Global markets are trading without direction to start the week with interest rate decision set to dominate headlines, front-month Dow Jones minis are +0.03%, S&P 500 minis +0.05% and Nasdaq 100 minis +0.15%
  • Hong Kong suspended the proposed law that would allow extradition to mainland China, but still, almost 2 million protestors took to the street, putting the Chinese government in a tough spot
  • US Commerce Secretary Wilbur Ross said over the weekend he expects President Trump and President Xi to talk at the G-20 next week and agree to restart talks, but nothing can be guaranteed
  • The Federal Reserve meets this week and despite all the talk over an interest rate cut, a cut is not expected on Wednesday
  • In the absence of an interest rate cut, the wording of the Fed's communication is expected to be dovish
  • Central Bank decisions will also come in Japan, England, Brazil, Norway, Taiwan, and Indonesia
  • China has hot confirmed a meeting with President Trump, we ask the question: To Xi or not to Xi: Will he meet with Trump at the G-20?
  • More on Friday's data on the US economy: 
  • Empire Manufacturing Index for June is due today with 10.5 expected, down from 17.8 in May 
  • The VIX is little changed this morning and is currently at 15.62 after closing at 15.28 last week
  • iShares MSCI Emerging Markets ETF (EEM) June 21 OTM Calls, iShares MSCI EAFE ETF (EFA) June 21 OTM Calls and Invesco QQQ Trust (QQQ) July 21 OTM Calls are the most actively traded options in today's pre-market
  • US 10-Year Treasury Bonds are lower with yields up 2.94 basis points to 2.1098%
  • The US Treasury 2s-10s Spread has narrowed 0.9 basis points to 0.23%
  • Saudi Arabia said it hopes that OPEC can agree to extend production cuts through the second half of 2019
  • WTI Crude is currently up 0.44% to USD$52.51/bbl with the Brent-WTI spread down USD$-2.63 to USD$9/bbl
  • Gold is currently down -0.51% to USD$1334.81/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) shares soared on a report one of its competitors is unable to meet surging demand for its meatless products.  Bloomberg reported multiple fast food chains that sell Impossible Burgers, a Beyond Meat rival, were experiencing shortages.  Beyond Meat is the best performing IPO of 2019, having risen more than 500%.  Beyond Meat is not rated in our Global Top Stock Ideas

Global Information Technology Stocks Trending in the News

  • Alibaba (BABA) plans to split its stock 8-for-1 as it prepares to list its shares in Hong Kong.  The plan will be proposed and put to a shareholders vote on July 15.  Alibaba is said to have already filed confidentially for a $20 billion stock sale in connection with its Hong Kong listing, though it has yet to confirm that publicly.  If confirmed, it would be one of the largest listings ever in Hong Kong.  Alibaba is rated “Attractive” in our China All-Cap Global Top Stock Ideas
  • Corning (GLW) laid out a new growth strategy for investors today for 2020-2023.  Corning is targeting 6% to 8% compound annual sales growth focused on organic growth.  Corning is also targeting 12% to 15% compound annual EPS growth with strong sales growth, improving margins.  Corning expects dividends per share to grow 10% annually over the same period.  Corning is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Walt Disney (DIS) continues to dominate the summer box-office in 2019, will not other studios able to match its success.  There have already been a number of sequel or prequel releases that have flopped while Disney enjoys success.  Sequels are generally a reliable generator of ticket sales but this season it is only Disney that has been able to spark interest in sequel releases.   The one exception was the X-Men sequel that Disney released but was developed by Fox (FOXA) and was acquired in the recent deal with Disney.  Walt Disney is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  Fox is not rated in our Global Top Stock Ideas 
  • Dish Network (DISH) is in the lead to scoop up asset from Sprint (S) and T-Mobile (TMUS).  Both carriers need to shed assets in order to gain approval for their merger from the US Justice Department, WSJ reports.  Dish has been the biggest critic of the merger and now its CEO is saying the best way for it to happen is by Dish acquiring some of the assets the regulators want it to shed.  Dish is looking to acquire the prepaid mobile unit as well as spectrum to go with it.  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.  Sprint is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  T-Mobile is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
  • General Motors (GM) is considering a plan to produce an electric version of its Hummer SUV, according to Bloomberg.  The idea being considered would see GM bring the Hummer name back as a way to tap into the demand for rugged SUVs but avoid the gas-guzzling complaints of the past.  The Hummer plan would be part of CEO Mary Barra’s plan to transform GM into a “all-electric future.”  General Motors is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Sprint (S) and T-Mobile (TMUS) are close to seeing their proposed merger approved by US authorities, with conditions, according to a report in the New York Times.  The main condition is the sales of certain assets that would permit the creation of a rival carrier.  Critics see the merger of Sprint and T-Mobile as bad for consumers as it would cut the number of national carriers to 3 from 4.  Sprint is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  T-Mobile is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • Airbus (ENXTPA:AIR) announced plans to develop its longest range single-aisle jet, matching Boeing’s (BA) plans to develop the same type of plane.  Airbus made the announcement as Boeing remain distracted with its 737 Max problems.  Airbus will call the new model the A321XLR, which would be an upgrade to its A321 Neo.  The A321XLR would replace Boeing 757s that are soon to exit service.  The new plane should arrive in 2023.   Airbus is rated “Neutral” in our European Large-Cap Global Top Stick Ideas.  Boeing is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.   
  • American Airlines (AAL) mechanics must stop their work slowdown, according to a judge’s ruling from Friday.  The judge ruled that the mechanics’ union must stop slow-walking repairs as a way to gain leverage in its negotiations with American.  The mechanics’ union is the only union to not have an updated contract since American merged with US Airways in 2013.  American Airlines is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.   

Global Financial Stocks Trending in the News

  • Goldman Sachs (GS) announced that it will be combining 4 units that invest in private equity, real estate and hard-to-access deals.  The new unit is expected to hold about $140 billion in assets as Goldman tries to create a unit of the steady, income generating businesses that investors like.  This is the first signature move of Goldman’s new CEO.  Goldman Sachs is rated “Neutral” in our European Large-Cap Global Top Stick Ideas.

Global Power & Commodity Stocks Trending in the News

  • Keane Group Inc (FRAC) and C&J Energy Services (CJ) agreed to merge in an all-stock deal valued at $746 million.  The deal between the 2 oil-services companies is being described as a merger of equals.  Both companies have slumped over 60% this year amid an oversupply of pumping capacity.  Keane Group is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.  C&J Energy Services is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Pfizer (PFE) announced it is acquiring Array BioPharma (ARRY) in a deal valued at $10.6 billion.  Pfizer is paying $48 per share, a 62% premium to Friday’s close, to expand farther into cancer care.  Array focuses on drugs that target a mutation in genes that cause cancer.  Pfizer will get drugs already in use plus a strong pipeline of potential new drugs.  Pfizer is rated “Attractive” in our European Large-Cap Global Top Stick Ideas.  Array BioPharma is rated “Top Short” in our European Large-Cap Global Top Stick Ideas.

 

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International Stock Markets Recaps

  • The Euro Stoxx 600 is currently down -0.01%, the FTSE 100 is down -0.08%, the DAX has risen +0.05%, and the CAC 40 is up +0.23%
  • Utilities (-0.42%), Banks (+0.75%), and Basic Resources (-0.13%) stocks are the top performers in the Euro Stoxx 600 today
  • Retail (-0.2%), Health Care (-0.36%), and Construction & Materials (-0.11%) 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 1.24x
  • 59 stocks in the Euro Stoxx 600 are at 4-week highs while 33 stocks are at 4-week lows
  • 28 stocks in the Euro Stoxx 600 are overbought while 15 stocks are oversold according to the 16-day RSI Measure
  • The Nikkei 225 finished up +0.03%, the Hang Seng ended up +0.4%, the Hang Seng China Enterprise up +0.08%, and the CSI 300 was 0%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.33x
  • 13 stocks in the Nikkei 225 hit 4-week highs while 12 stocks reached 4-week lows
  • 2 stocks in the Nikkei 225 closed overbought while 2 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 1.27x
  • 4 stocks in the Hang Seng hit 4-week highs while 3 stocks reached 4-week lows
  • 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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