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US Stocks Preview Ahead of the Open
- US stocks index futures are trending lower this morning, following global stocks, after weak US data on Friday fueled growing concerns of a slowdown in global growth, with front-month Dow Jones minis -0.17%, S&P 500 minis -0.13% and Nasdaq 100 minis -0.37%
- The US Yield Curve is inverted, with investors digesting the fact the this phenomenom usually points to a coming recession, adding to market woes today
- Globally, bond yields in many markets are at record lows, “sounding the same alarm” of a coming slowdown, according to a report in Bloomberg today
- Charles Evan, a voting member of the Fed’s FOMC, said he does not see any rate hikes until the second half of 2020, saying he wants to see evidence of inflation before any rate action
- US-China trade talks resume today with a cabinet-level US delegation arriving in China
- With less than 2 weeks to come up with a revised Brexit proposal, there could be another vote on Brexit this week if a new proposal is presented
- The VIX is little changed this morning and is currently at 16.48 after closing at 16.48 last week
- Coty (COTY) May 2019 OTM Calls & Puts, SPDR S&P 500 ETF Trust (SPY) April 19 Puts and iShares Emerging Markets (EEM) April 18 & May 2019 OTM Puts are the most actively traded options contracts in US pre-market trading this morning.
- US 10-Year Treasury Bonds are lower with yields up 2.66 basis points to 2.4656%
- The US Treasury 2s-10s Spread has widened 1.23 basis points to 0.13%
- WTI Crude is currently down -1.49% to USD$58.94/bbl with the Brent-WTI spread up USD$1.32 to USD$7.4/bbl
- Gold is currently little changed 0.25% to USD$1317.02/oz
Stocks Trending in the News
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- Akamai Technologies (AKAM) was downgraded to sell from hold at Deutsche Bank, Akamai saw its price target cut to USD$58 from USD$64. Deutsche downgraded the stock due to tough year-on-year comparisons and the strong possibility that it will lose market share in the coming year. Akamai Technologies is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
- Boeing (BA) and the fast-tracked certification of its 737-Max aircraft is under intense security from federal investigators in the wake of 2 crashed. Lawmakers in Congress are asking why the FAA has delegated some of the certification to Boeing itself, according the Wall Street Journal. Boeing for years lobbied Congress and the FAA to speed up the time it takes to certify a new aircraft. The approval of the most recent 737 will be taken apart step by step by investigators. Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
- Eli Lilly (LLY) is publishing more details pricing information on its insulin sales that have come under increased scrutiny. Eli Lilly has raised the list price considerably over the last few years, eliciting the ire of Congress, that has start to look into the pricing. Eli Lilly said despite the list price hikes, after discounts and rebates, its actual sale price has fallen 8% over the last 5 years. Eli Lilly is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
- Lululemon (LULU) was downgraded to neutral from outperform at Wedbush today. Wedbush cut Lululemon’s price target to USD$155 from USD$176. Lululemon is likely to have had a turbulent February, like the rest of retails, and is expected to have softening revenue growth as compared with the start of the year. Lululemon reports fourth quarter results on March 27. Lululemon is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
- GM (GM) plans to invest USD$1.8 billion in US manufacturing plants in 5 US states, including Ohio. A total of 700 jobs will be added as part of the investments. GM made the announcement at one of its Ohio plants, the same week President Trump lambasted the company for closing a different plant in Ohio. GM is investing in an electric vehicle plant while closing a plant that builds small cars than Americans have been shunning. GM is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas
- Naspers (JSE:NPN) will separate its holding in Tencent (TCEHY, SEHK:700), now valued at USD$133 billion, in a separate listing on the Euronext exchange in Amsterdam. Naspers holds 31% of Tencent and the holding’s value has long dwarfed the value of Naspers itself. The new listing is meant to attract more international investors. Naspers is not rated in our Global Top Stock Ideas. Tencent is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
- Thermo Fisher (TMO) is acquiring Brammer Bio for USD$1.7 billion in cash. Thermo Fisher is looking to expand its reach in the gene and cell-therapy business where Brammer Bio is strong. Thermo Fisher expects the acquisition to add 10 cents a share to adjusted earnings in the first full year of ownership. Thermo Fisher is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
- Trinity Industries (TRN) was downgraded by Buckingham Research to neutral from buy. Trinity also saw its price target cut to USD$26 from USD$32. Buckingham warned of a deterioration in lease rates for both railcars and sand cars, seeing a low single digit drop in rates. An environment of generally weak railcar demand was cited as a reason for the downgrade. Trinity Industries is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.
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International Stock Markets Recap
- The Euro Stoxx 600 is currently down -0.25%, the FTSE 100 is down -0.08%, the DAX is down -0.02%, and the CAC 40 is down -0.01%
- Utilities (-0.03%), Banks (+0.42%), and Basic Resources (-0.43%) stocks are the top performers in the Euro Stoxx 600 today
- Retail (-0.68%), Health Care (-0.58%), and Construction & Materials (-0.12%) 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 0.59x
- 81 stocks in the Euro Stoxx 600 are at 4-week highs while 93 stocks are at 4-week lows
- 38 stocks in the Euro Stoxx 600 are overbought while 12 stocks are oversold according to the 16-day RSI Measure
- The Nikkei 225 finished down –3.01%, the Hang Seng ended down -2.03%, the Hang Seng China Enterprise declined -2.48%, and the CSI 300 was -2.37%
- Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.01x
- 55 stocks in the Nikkei 225 hit 4-week highs while 22 stocks reached 4-week lows
- 14 stocks in the Nikkei 225 closed overbought while 5 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 0.04x
- 8 stocks in the Hang Seng hit 4-week highs while 5 stocks reached 4-week lows
- 4 stocks in the Hang Seng closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure