Global Stocks are mixed this morning as US stocks decline with worries about a potential fallout from criminal charges against Huawei Technologies.

by QuantalyticsResearch

 

US Stocks

  • US prosecutors have formally filed criminal charges against Huawei Technologies, raising fears about the potential for a breakdown in talks between US and China trade officials
  • Bloomberg suggests the rotation into defensive stocks which started in late CY2018 points to a market bottom and an end to the current correction in stocks valuations
  • S&P 500 stocks buying back their stocks is back in vogue with the S&P 500 buyback index up 16% since the S&P 500 hit its 12-month low on December 24th
  • Large-cap oil stocks will be under the microscope this earnings season following the margin crush in 4Q from falling oil prices in the quarter with a greater focus on capital allocation and dividends
  • While Bitcoin is viewed as an uncorrelated asset, historically, it has failed to properly serve as hedge against a falling S&P 500 — since July 2010, Bitcoin has only recorded positive returns in 3 of the 10 worst months for the S&P 500 (in terms of returns).
  • The VIX is little changed this morning and is currently at 19.05 after closing at 18.87 yesterday
  • SPY March 15 & June 21 OTM Puts, USO February 1 OTM Puts and EEM February 15 OTM Calls & Puts are some of the most actively traded options contracts in the US pre-market this morning
  • US 10-Year Treasury Bonds are higher with yields down -0.73 basis points to 2.7367%
  • The US Treasury 2s-10s Spread has widened 0.38 basis points to 0.16%
  • WTI Crude is currently down -2.8% to USD$51.99/bbl with the Brent-WTI spread up USD$3.69 to USD$8.01/bbl
  • NYMEX gasoline spreads, a measure of Refiner profitability, as dropped to an 8-year low following an unexpected build up in domestic motor fuel inventories
  • Gold is currently up 0.33% to USD$1307.6/oz

Stocks Trending in the News

Click name for Q-Factor breakdown, latest price details, more financial info and sentiment data.

  • 3M (MMM) reported fourth quarter adjusted EPS of USD$2.31 while consensus was for USD$2.28.  3M fourth quarter revenue came at USD$7.9 billion, missing consensus of USD$7.86 billion.  3M gave guidance for 2019 EPS of USD$10.45-10.90, down from USD$10.60-11.05.  3M is rated “Attractive” in our US Large-Cap Global Top Stock Ideas “Neutral” in our US Industrials Global Top Stock Ideas.
  • Biogen (BIIB) reported fourth quarter EPS of USD$6.33 while consensus was for USD$6.69.  Biogen fourth quarter revenue came at USD$3.53 billion, missing consensus of USD$3.39 billion.  Biogen gave guidance for 2019 EPS of USD$28-29.  Biogen is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Harris Corp. (HRS) reported fourth quarter EPS of USD$1.88 while consensus was for USD$1.90.  Harris Corp. fourth quarter revenue came at USD$1.666 billion, in line with consensus of USD$1.64 billion.  Harris Corp. is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials.
  • L3 Technologies (LLL) reported fourth quarter EPS of USD$3.10 beating consensus of USD$2.69.  L3 Technologies fourth quarter revenue came at USD$2.77 billion, above consensus of USD$2.66 billion.  L3 Technologies is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials.
  • PulteGroup (PHM) reported fourth quarter EPS of USD$1.11 while consensus was for USD$1.10.  PulteGroup fourth quarter revenue came at USD$2.99 billion, missing consensus of USD$2.91 billion.    PulteGroup is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Verizon (VZ) reported fourth quarter EPS of USD$1.12 while consensus was for USD$1.08.  Verizon fourth quarter revenue came at USD$34.28 billion, missing consensus of USD$34.44 billion.  Verizon gave guidance for 2019 EPS of ~USD$4.73.  Verizon is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Xerox (XRX) reported fourth quarter EPS of USD$1.14  while consensus was for USD$1.04.  Xerox fourth quarter revenue came at USD$2.53 billion, matching consensus of USD$2.56 billion.  Xerox gave guidance for 2019 EPS of USD$3.70-3.80.  Xerox is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology.

European Stocks

  • European stocks are advancing, bouncing back from yesterday’s decline
  • The UK Parliament is set to vote on the revised BREXIT proposal from UK Prime Minister Theresa May this evening
  • The Euro Stoxx 600 is currently up +0.61%, the FTSE 100 is higher by +1.3%, the DAX has fallen -0.01%, and the CAC 40 has risen +0.51%
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.8x
  • Oil & Gas (+0.92%), Telecommunications (+0.27%), and Basic Resources (+0.77%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-0.1%), Food & Beverage (+1.01%), and Utilities (+0.96%) stocks are the worst performers in the Euro Stoxx 600 today
  • European tech stocks are dropping following news that Taiwan Semiconductor Manufacturing Co (TSEC:2330, ADR: TSMC) suppliers have agreed to price cuts
  • 88 stocks in the Euro Stoxx 600 are at 4-week highs while 21 stocks are at 4-week lows
  • 21 stocks in the Euro Stoxx 600 are overbought while 4 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is little changed this morning and is currently at 15.65 after closing at 16.16 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1433
  • GBP£ is currently little changed against the USD$ at 1.3148
  • CHF is currently little changed against the USD$ at 1.0069
  • German 10-Year Bunds are higher with yields down -0.1 basis points to 0.204%
  • UK 10-Year GILTs are lower with yields up 0.7 basis points to 1.272%

Asian Stocks

  • Asia stocks finished mixed again, off intraday highs as the formal criminal charges against Huawei Technologies and negative guidance from Caterpillar (CAT) and Nvidia (NVDA) for their Chinese businesses put a crimp into investor enthusiasm
  • The Nikkei 225 finished up +0.08%, the Hang Seng ended down -0.16%, the Hang Seng China Enterprise declined -0.14%, and the CSI 300 was +0.32%
  • Since hitting their lows in December, Asian stocks have gained nearly USD$1.6 trillion in value though that rally is looking fragile with increasing worries about slowing economic growth in China
  • Hong Kong retailers lagged the recent rally in Hong Kong with weak, disappointing tourist spending from mainland China pressuring retailer valuations
  • Investor sentiment for Japanese stocks finished neutral with the advance/decline ratio for the Nikkei 225 closing at 1.1x
  • 65 stocks in the Nikkei 225 hit 4-week highs while 9 stocks reached 4-week lows
  • 0 stocks in the Nikkei 225 closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished positive with the advance/decline ratio for the Hang Seng closing at 1.27x
  • 29 stocks in the Hang Seng hit 4-week highs while 1 stock reached 4-week lows
  • 9 stocks in the Hang Seng closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure
  • Japan 2-Year Government Bonds are lower with yields up 0.7 basis points to -0.155%
  • Japan 10-Year Government Bonds are lower with yields up 0.7 basis points to 0.009%
  • JGBs 2s-10s Spread has little changed 0 basis points to 0.16%
  • JPY¥ is currently little changed against the USD$ at 109.45
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