US Stocks
- US stocks index futures are declining, parring earlier AM gains as worries about a shutdown of the US government are causing jitters among US traders: front-month Dow Jones minis –0.11%m S&P500 minis –0.07% and Nasdaq 100 minis –0.04%
- According to Bloomberg, the NTM P/E for the S&P500 dropped nearly 4 pts so far this year — the S&P500 NTM P/E has only contracted a greater amount 6 times since this data has been recorded with a bear market in 5 of those 6 years
- SPDR S&P500 ETF (SPY) saw positive fund flows of USD$1.46 billion last week, an increase of +0.6% in total fund assets
- Emerging markets stocks ETFs experienced net fund flows of +USD$948.1 million – the 9th straight week of positive fund flows
- The VIX is little changed this morning and is currently at 22.36 after closing at 21.63 yesterday
- XOP February 2019 OTM Puts, December 17 & December 21 OTM Calls & Puts, EEM December 21 OTM Puts and QQQ December 21 OTM Puts are the most actively traded options contracts in the US pre-marke
- US 10-Year Treasury Bonds are higher with yields down -1.09 basis points to 2.8786%
- The US Treasury 2s-5s Spread has narrowed 0.16 basis points to 0%
- The US Treasury 2s-10s Spread has narrowed 0.06 basis points to 0.16%
- WTI Crude is currently up 1.25% to USD$51.81/bbl with the Brent-WTI spread up USD$1.17 to USD$9.81/bbl
- Gold is currently little changed 0.06% to USD$1239.81/oz
- Global oil prices are climbing following a report that shows US domestic oil rigs falling to the lowest level in 8 weeks while traders continue to digest the announcement that OPEC + Russia will cut production targets in CY2019
Stocks Trending in the News
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- Alphabet’s (GOOGL) Google announced a USD$1 billion expansion in New York City. Google will establish a new NYC campus called Google Hudson Square which will be in addition to its Google Chelsea campus. Google will double the number of employees in NYC post-expansion. Alphabet is rated “Neutral” in both our US Large-Cap and US Information Technology Global Top Stock Ideas.
- Asos Plc (AIM: ASC), the e-commerce retailer, has said the holiday shopping season has gotten off to a horrible start for the company. Asos said its Christmas season got off to poorly with a “significant deterioration” in November. Asos cut its full year forecast as it has been discounting in-stock merchandise to lower inventory. Asos is rated “Neutral” in our United Kingdom Global Top Stock Ideas.
- BHP Group (ASX: BHP) declared a special dividend of USD$1.02 per shares to be pain January 30th for holders January 11th. BHP’ special dividend represents the USD$5.2 billion residual balance after selling onshore US assets and buying back shares. After the dividend payout BHP will have returned USD$21 billon over the last 2 years. BHP Group is rated “Attractive” in our Australia Large-Cap Global Top Stock Ideas.
- Embraer’s (ERJ) approved its Commercial Aviation JV with Boeing (BA), it announced. Embraer said the value attributed by the parties to the JV is USD$5.2 billion. The new JV will hold 100% of the commercial aviation business. The deal still needs to be approved by the Brazilian government. Embraer is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas. Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
- Goldman Sachs (GS) is facing its first charges in Malaysia in the 1MDB scandal. Authorities are alleging that Goldman Sachs misled investors when it sold 1MDB bonds since it knew the proceeds would be misappropriated. Authorities are seeking fines well above the USD$2.7 billion of misused funds and USD$600mn is fees generated on the transaction. Goldman Sachs blames the scandal on “rogue employees”. Goldman Sachs is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
- Hennes & Mauritz (OM: HM B) reported sales figures that as it reduces its large inventory. H&M said sales rose 12% to 56.4 billion kroner (USD$6.2 billion) while consensus was for 56.1 billion kronor. H&M did not report profitability and analysts are questioning how much discounting H&M had to do in order to move the inventory. H&M will report full results on January 31st. Hennes & Mauritz is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
- JD.com (JD) coverage was reinstated today at GF Securities will an accumulate rating. JD.com’s price target was set at USD$27.75 implying 25% upside to its last closing price. JD.com is rated “Top Short” in our China All-Cap Global Top Stock Ideas.
- Lululemon Athletica (LULU) was upgrade today at Stifel to buy from hold. Lululemon Athletica’s price target of USD$151 was maintained. Stifel expects Lululemon Athletica double-digit sales growth to continue and sees upside to consensus estimates for 2019. Lululemon Athletica’s revenue targets are “low hurdles”, according to the report. Lululemon Athletica is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
European Stocks
- European stocks are declining to start the week and trading at session lows as a profit warning from Asos Plc (AIM: ASC) is spooking retail stocks
- The Euro Stoxx 600 is currently down -0.48%, the FTSE 100 has declined -0.34%, the DAX has fallen -0.28%, and the CAC 40 is lower by -0.48%
- Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.44x
- Oil & Gas (-0.4%), Telecommunications (+0.58%), and Basic Resources (+0.87%) stocks are the top performers in the Euro Stoxx 600 today
- Automobiles & Parts (+0.31%), Food & Beverage (-0.45%), and Utilities (+0.31%) stocks are the worst performers in the Euro Stoxx 600 today
- 25 stocks in the Euro Stoxx 600 are at 4-week highs while 88 stocks are at 4-week lows
- 13 stocks in the Euro Stoxx 600 are overbought while 34 stocks are oversold according to the 16-day RSI Measure
- VSTOXX, the European stocks equivalent of the VIX, is little changed this morning and is currently at 19.41 after closing at 19.16 yesterday
- EUR€ is currently up +0.292% against the USD$ to 1.1339
- GBP£ is currently up +0.326% against the USD$ to 1.2624
- CHF is currently up +0.329% against the USD$ to 1.0051
- German 10-Year Bunds are higher with yields down -0.4 basis points to 0.248%
- UK 10-Year GILTs are lower with yields up 1.9 basis points to 1.259%
Asian Stocks
- Asia stocks finished mixed in overnight trading as traders await more clarity on US-China trade negotiations
- The Nikkei 225 finished up +0.62%, the Hang Seng ended down -0.03%, the Hang Seng China Enterprise declined -0.07%, and the CSI 300 was -0.15%
- Investor sentiment for Japanese stocks finished neutral with the advance/decline ratio for the Nikkei 225 closing at 1.12x
- 8 stocks in the Nikkei 225 hit 4-week highs while 31 stocks reached 4-week lows
- 1 stock in the Nikkei 225 closed overbought while 13 stocks closed oversold according to the 16-day RSI Measure
- Investor sentiment for Hong Kong stocks finished neutral with the advance/decline ratio for the Hang Seng closing at 1.17x
- 1 stock in the Hang Seng hit 4-week highs while 2 stocks reached 4-week lows
- 0 stocks in the Hang Seng closed overbought while 3 stocks closed oversold according to the 16-day RSI Measure
- Japan 2-Year Government Bonds are lower with yields up 0.3 basis points to -0.151%
- Japan 10-Year Government Bonds are lower with yields up 0.6 basis points to 0.041%
- JGBs 2s-10s Spread has widened 0.3 basis points to 0.19%
- JPY¥ is currently little changed against the USD$ at 113.29
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