Stocks advancing as a risk on mood returns to global markets

by QuantalyticsResearch

US Stocks

  • US stocks index futures are advancing with front-month Dow Jones minis +0.29%, S&P 500 minis +0.15% and Nasdaq 100 minis +0.21%
  • US President Donald Trump is scheduled to give his State of the Union address to the US Congress this evening
  • Goldman Sachs argues that investors who missed the January 2019 rally, where the S&P 500 finished +8.0%, missed out on most of the returns for the year following an overreaction to decelerating growth in 4Q of CY2018.  Going forward, Goldman Sachs expects only modest returns.
  • Bloomberg analysts do a deep dive on earnings for the S&P 500, highlighting that earnings growth is expected to decelerate in CY2019 before rebounding in CY2020.  According to Bloomberg, a recovery in the acceleration of earnings growth for the S&P 500 in CY2020 will be key to supporting a continued rally in the benchmark US index.  Consensus expects an average EPS growth rate of +9.5% per annum through CY2020, well ahead of the +8.2% average annual growth rate for the past 5 years.
  • MKM argues utility stocks will regain the price momentum they lost during the post-Christmas rally with technical signals suggesting the sector is oversold
  • The MSCI All Country index, a proxy for global stocks, has already recovered 50% of CY2018’s losses YTD with the index now +8.35%
  • The VIX is little changed this morning and is currently at 15.5 after closing at 15.73 yesterday
  • eBay (EBAY) April 2019 OTM Call, HYG March 2019 & April 2019 OTM Puts, and XLF February 15 OTM Puts are some of the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are lower with yields up 0.53 basis points to 2.7288%
  • The US Treasury 2s-10s Spread has widened 0.32 basis points to 0.19%
  • WTI Crude is currently down -1.27% to USD$54.56/bbl with the Brent-WTI spread up USD$1.14 to USD$7.94/bbl
  • Gold is currently little changed 0.15% to USD$1314.21/oz

Stocks Trending in the News

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

  • Alphabet (GOOGL) reported fourth quarter EPS of USD$12.77 missing consensus of USD$13.04.  Alphabet fourth quarter revenue came at USD$39.29 billion matching consensus of USD$38.98 billion.  Alphabet reported USD$7 billion on capital expenditures, well above USD$5.2 billion expected. Paid clicks on Google properties grew 66% y/y.  Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Aramark (ARMK) reported FY1Q2019 adjusted EPS of USD$0.63 in line with analyst expectations for USD$0.61. Aramark generated USD$4.3bn of revenue in FY1Q2019 while consensus called for USD$4.19bn. Aramark expects FY2019 EPS to come between USD$2.30 and USD$2.40. Aramark is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Becton Dickinson & Co. (BDX) reported CY4Q2018 adjusted EPS of USD$2.70 in line with analyst expectations for USD$2.61. Becton Dickinson generated USD$4.16bn of revenue in CY4Q2018 while consensus called for USD$4.11bn. Becton Dickinson expects CY2019 EPS to come between USD$12.05 and USD$12.15. Becton Dickinson is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Centene Corp. (CNC) announced CY4Q2018 adjusted EPS of USD$1.38 while consensus was for USD$1.32. Centene Corp. reported revenue of USD$16.6bn in CY4Q2018 while analysts expected USD$16.33bn. Centene Corp. sees CY2019 split adjusted EPS between USD$4.11 and USD$4.31. Centene Corp. is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Entegris Inc. (ENTG) reported FY1Q2019 adjusted EPS of USD$0.47 in line with analyst expectations for USD$0.45. Entegris Inc. generated USD$401.6 mn of revenue in FY1Q2019 while consensus called for USD$391.4mn. Entegris Inc. expects FY2Q2019 EPS to come between USD$0.42 and USD$0.47. Entegris Inc. is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Estee Launder Cos. Inc. (EL) reported FY2Q2019 adjusted EPS of USD$1.86 well above analyst expectations for USD$1.55. Estee Launder Cos. generated USD$bn of revenue in FY2Q2019 while consensus called for USD$bn. Estee Launder Cos. expects FY2019 EPS to come between USD$4.92 and USD$5.00. Estee Launder Cos. is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Gilead Sciences (GILD) reported fourth quarter adjusted EPS of USD$1.44 missing consensus of USD$1.70.  Gilead Sciences fourth quarter revenue came at USD$5.8 billion beating consensus of USD$5.52 billion.  Gilead Sciences raised its quarterly dividend to 63 cents, up from 57 cents, and above 62 cents expected.  Gilead Sciences is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Seagate Technology (STX) reported fiscal second quarter adjusted EPS of USD$1.41 beating consensus of USD$1.28.  Seagate Technology fiscal second quarter revenue came at USD$2.71 billion matching consensus of USD$2.7 billion.  Seagate Technology is not rated in our Global Top Stock Ideas
  • Versum Materials (VSM) reported fourth quarter EPS of USD$0.55 matching consensus of USD$0.55.  Versum Materials fourth quarter revenue came at USD$339.5 million, matching consensus of USD$341.8 million.  Versum Materials is rated “Top Buy” in our US SMID-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.

European Stocks

  • European stocks are advancing to start the morning following better-than-expected regional PMIs readings
  • The Euro Stoxx 600 is currently up +0.95%, the FTSE 100 is higher by +1.44%, the DAX has advanced +1.21%, and the CAC 40 has risen +1.03%
  • Euro area January 2019 composite PMI revised to 51 vs an initial flash reading 50.7
  • Germany January 2010 composite PMI revised to 52.1 vs initial flash reading 52.1
  • France January 2019 composite PMI revised to 48.2 vs initial flash reading 47.9
  • U.K. January 2019 composite PMI comes in at 50.3 vs 51.4 estimate
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 5.52x
  • Oil & Gas (+1.87%), Telecommunications (+0.72%), and Basic Resources (+1.13%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (+0.91%), Food & Beverage (+0.48%), and Utilities (+0.06%) stocks are the worst performers in the Euro Stoxx 600 today
  • 100 stocks in the Euro Stoxx 600 are at 4-week highs while 23 stocks are at 4-week lows
  • 37 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 13.63 after closing at 14.21 yesterday
  • EUR€ is currently down -0.192% against the USD$ to 1.1416
  • GBP£ is currently down -0.253% against the USD$ to 1.3004
  • CHF is currently down -0.389% against the USD$ to 0.9982
  • German 10-Year Bunds are lower with yields up 1.4 basis points to 0.191%
  • UK 10-Year GILTs are higher with yields down -1 basis points to 1.267%

Asian Stocks

  • Asian markets were relatively quiet with most major regional stock exchanges closed for the Lunar New Year
  • Japanese stocks were little changed in a directionless trading overnight while Indian stocks closed positive following a volatile trading session

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