Where do we go now? After record US close, global markets struggle for further upside in wake of negative European sentiment readings

by QuantalyticsResearch

US Stocks Preview Ahead of the Open

  • Global stocks and US futures are mixed this morning after yesterday’s record close of US stocks, in early trading with front-month Dow Jones minis +0.10%, S&P 500 minis -0.02% and Nasdaq 100 minis -0.03%
  • The US market is ripe for a melt-up, according to Bloomberg today, with valuations constrained and “afraid to miss out” flows likely to continue strong
  • Fear?  What Fear?: Like Cookie Monster with Chips Ahoy, Investors Gobble up Risk; VIX collapse since December one of quickest ever
  • Confidence in both the German and French economies fell; in Germany it fell despite expectations for an slight improvement while in France confidence in manufacturing fell to a 4-year low
  • Chinese Stimulus slow downRunning Dry: Is the Chinese Stimulus Spigot About to be Turned Off?
  • Check out these micro-caps: Micro-Cap, Mega-Opportunity: Check out the TOP BUY MICRO-CAP Stocks with Massive Potential
  • The VIX is little changed this morning and is currently at 12.40 after closing at 12.28 yesterday
  • Cenovus Energy (CVE) June 21 OTM Calls, iShares Core S&P 500 Index ETF (CAD-Hedged) (XSP) May 8 OTM Calls and iShares MSCI Emerging Markets ETF (EEM) June 21 OTM Puts are the most actively traded options contracts in US pre-market trading this morning
  • US 10-Year Treasury Bonds are higher with yields down -2.53 basis points to 2.5397%
  • The US Treasury 2s-10s Spread has widened 0.28 basis points to 0.2%
  • WTI Crude is currently up 1.07% to USD$66.4/bbl with the Brent-WTI spread down USD$-1.11 to USD$7.41/bbl
  • Gold is currently little changed -0.05% to USD$1271.76/oz

Stocks Trending in the News

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  • Anthem (ANTM) reported first quarter earnings that beat expectations.  Anthem first quarter EPS of $6.03 came ahead of $5.84 consensus.  Anthem first quarter revenue of $24.39 billion, a touch ahead of $24.19 billion consensus.  Anthem first quarter benefit expense ratio was 84.4%.  Anthem raised EPS guidance for the full year to $19.20 to $19.40, up from $19 to $19.30.  Anthem said it expects about $100 billion in operating revenue in 2019.  Anthem is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Boston Scientific (BSX) reported first quarter earnings that beat expectations.  Boston Scientific first quarter EPS of $0.35 came just below $0.36 consensus.  Boston Scientific first quarter revenue of $2.49 billion, a touch below $2.51 billion consensus.  Boston Scientific provided EPS guidance for the second quarter of $0.35 to $0.37, with full year EPS of $1.54 to $1.58.  Boston Scientific is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • E-Bay (EBAY) posted first quarter earnings that beat expectations.  E-Bay first quarter adjusted EPS of 67 cents beat consensus of 63 cents.  Net revenue of $2.64 billion beat $2.58 billion consensus.  E-Bay guidance for second quarter of 61-63 cents, above 59 cents consensus.  E-Bay expects revenue of $2.64 to $2.69 billion in the second quarter.  E-Bay is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Jet Blue (JBLU) reported first quarter adjusted EPS that beat consensus.  Adjusted EPS came at 16 cents while consensus was 12 cents.  Jet Blue operating revenue in the first quarter was $1.87 billion, in line with $1.87 billion consensus.  Jet Blue provided second quarter guidance for available seat miles, seeing that grow 4.5% to 6.5%.  Jet Blue sees revenue per seat mile growing 1% to 4% in the second quarter.  Jet Blue is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Northrop Grumman (NOC) reported first quarter sales that trailed expectations.  Northrop Grumman first quarter sales of $8.19 billion came just below $8.32 billion consensus.  Boston Scientific first quarter EPS came at $5.06, beating $4.85 consensus.  Northrop Grumman increased full year EPS guidance of $18.90 to $19.10, up from of $18.50 to $19.00.  Northrop Grumman is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Thermo Fisher (TMO) reported first quarter earnings that beat expectations.  Thermo Fisher first quarter EPS of $2.81 came ahead of $2.73 consensus.  Thermo Fisher first quarter revenue of $6.12 billion, a touch ahead of $6.02 billion consensus.  Thermo Fisher provided EPS guidance for the full year of $12.02 to $12.22.  Thermo Fisher said it expects revenue of $25.17 billion to $25.47 billion in 2019.  Thermo Fisher is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas
  • Texas Instruments (TXN) reported first quarter earnings that beat consensus with guidance in line.  Texas Instruments first quarter EPS if $1.26 beat consensus of $1.13.  First quarter revenue of $3.59 billion beat consensus of $3.48 billion.  Texas Instruments gave second quarter EPS guidance of $1.12 to $1.32 with revenue guidance of $3.46 billion to $3.74 billion, consensus is $3.66 billion.  Texas Instruments is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Wirecard (DB:WDI) will get a $1 billion investment from Softbank (TSE:9984).  Softbank is making the investment as it seeks more exposure to the payments sector.  Wirecard will gain access to Asian markets that is seeking.  The agreement could see Softbank acquiring up to 5.6% of Wirecard at a price that is 27% below market price.  The agreement involves the use of convertible bonds and could see Softbank as the second largest shareholder behind Wirecard’s founder.  Wirecard is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  Softbank is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas

International Stock Markets Recap

  • The Euro Stoxx 600 is currently up +0.17%, the FTSE 100 is down -0.27%, the DAX has risen +0.81%, and the CAC 40 is up +0.05%
  • Technology (+3.09%), Real Estate (+0.98%), and Construction & Materials (+0.7%) stocks are the top performers in the Euro Stoxx 600 today
  • Telecommunications (-0.91%), Oil & Gas (-0.9%), and Utilities (-0.83%) 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 0.99x
  • 148 stocks in the Euro Stoxx 600 are at 4-week highs while 38 stocks are at 4-week lows
  • 144 stocks in the Euro Stoxx 600 are overbought while 1 stocks are oversold according to the 16-day RSI Measure
  • The Nikkei 225 finished down –0.27%, the Hang Seng ended down -0.53%, the Hang Seng China Enterprise declined -0.57%, and the CSI 300 was +0.28%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.18x
  • 17 stocks in the Nikkei 225 hit 4-week highs while 6 stocks reached 4-week lows
  • 8 stocks in the Nikkei 225 closed overbought while 4 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 0.35x
  • 6 stocks in the Hang Seng hit 4-week highs while 12 stocks reached 4-week lows
  • 4 stocks in the Hang Seng closed overbought while 1 stocks closed oversold according to the 16-day RSI Measure
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