US Stocks
- Global stocks are advancing again today with US-China trade talks ending on what is reported to be a positive note, after the talks were extended an extra day
- Press reports are that the US and China are coordinating a final message, and will try to highlight where progress has been made; no statement has been issued yet
- Reuters is reporting that Fitch Rating’s head of sovereign ratings said that if the US shutdown goes on until March 1st and there is a problem with the debt ceiling later in the year, Fitch may need to consider a cut to the US AAA rating
- The US Federal Reserve will release the minutes of its last FOMC meeting; much has changed in the market since then and investors will be scouring the minutes for clues to their next move
- The VIX is little changed this morning and is currently at 20.41 after closing at 20.47 yesterday
- EEM March 19 OTM Puts, Verizon (VZ) January 19 Calls and AT&T (T) January 19 calls are some of the most actively traded options contracts in the US pre-market
- US 10-Year Treasury Bonds are lower with yields up 0.88 basis points to 2.7368%
- The US Treasury 2s-10s Spread has widened 0.05 basis points to 0.14%
- WTI Crude is currently up 2.6% to USD$50.80/bbl with the Brent-WTI spread down USD$-0.42 to USD$8.98/bbl
- Gold is currently down -0.33% to USD$1281.21/oz
Stocks Trending in the News
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- Advanced Auto Parts (AAP) was upgraded by Merrill Lynch to buy from neutral. Merrill Lynch hiked Advance Auto Part’s price target to USD$187, up from USD$160. Advance Auto Part’s average price target is presently USD$200. In the last week Barclay’s also upgraded Advance Auto Part to buy and raised its target to USD$205. Advance Auto Part is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.
- Delta Airlines (DAL) was downgraded at Imperial Capital to in-line from outperform. Imperial lowered Delta Airlines’ price target to USD$53 from USD$77. Delta Airlines’ consensus price target is presently USD$67.81. Imperial expects fewer fare hikes and an overall more challenging environment in 2019. Delta Airlines is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
- Facebook (FB) and Alphabet’s (GOOGL) Google are violating cyber laws in Vietnam, according to regulators there. Facebook and Google are allowing anti-government content on their sites, inciting anti-government sentiment, which is against Vietnamese law. Authorities said Facebook and Google have one year to fix the problems and must work with authorities to make that happen. Facebook is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas. Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
- Greggs Plc (LSE: GRG) reported 4Q sale-store-sales growth of 5.2% at company managed stores. Greggs raised its earnings forecast for pretax profit of 88 million pounds, up from 86 million pounds. Shore Capital reiterated its hold ratings, saying the company is fully valued at these levels. Greggs is rated “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas.
- Lennar (LEN) reported 4Q18 net earnings of USD$796.1 million or USD$2.42 per diluted share. Lennar delivered 14,15 new homes, up 64% y/y. Backlog of USD$6.6 billion is up 85% y/y. Total revenues of USD$6.5 billion is up 71% y/y. Lennar
- Tencent (TCEHY, SEHK: 700) will soon introduce its own digital assistant called “Xiaowei” for WeChat. Tencent is introducing the digital assistant that will link to a large variety apps, allowing users to do things like play music or order food. Tencent has not made clear how and when Xiaowei will be rolled out. Tencent is rated “Attractive” in our China All-Cap Global Top Stock Ideas.
- Weibo (WB) was downgraded yesterday by Morgan Stanley to equal-weight from overweight. Weibo is feeling the pinch of competition from smaller players and has seen margin compression, both were cited as reasons for the downgrade. Weibo’s next earnings report is February 12th. Weibo is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
European Stocks
- European stocks are rising, caught in the global stock updraft, fueled by hopes of progress from US-China trade talks
- The Euro Stoxx 600 is currently up +0.85%, the FTSE 100 is higher by +0.98%, the DAX has advanced +0.94%, and the CAC 40 has risen +1.09%
- UK Prime Minister Theresa May will spend the day trying to convince Parliament of the merits of her Brexit deal, there will be 5 days of deliberations before a January 15th vote
- Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 4.13x
- Oil & Gas (+0.94%), Telecommunications (-1%), and Basic Resources (+2.18%) stocks are the top performers in the Euro Stoxx 600 today
- Automobiles & Parts (+2.99%), Food & Beverage (+0.5%), and Utilities (-0.01%) stocks are the worst performers in the Euro Stoxx 600 today
- 204 stocks in the Euro Stoxx 600 are at 4-week highs while 11 stocks are at 4-week lows
- 9 stocks in the Euro Stoxx 600 are overbought while 0 stocks are oversold according to the 16-day RSI Measure
- VSTOXX, the European stocks equivalent of the VIX, is lower this morning and is currently at 18.85 after closing at 19.48 yesterday
- EUR€ is currently little changed against the USD$ at 1.1454
- GBP£ is currently little changed against the USD$ at 1.2736
- CHF is currently little changed against the USD$ at 1.0195
- German 10-Year Bunds are lower with yields up 6.8 basis points to 0.294%
- UK 10-Year GILTs are lower with yields up 1.3 basis points to 1.287%
Asian Stocks
- The Nikkei 225 finished up +1.1%, the Hang Seng ended up +2.27%, the Hang Seng China Enterprise up +2.22%, and the CSI 300 was +1.01%
- Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 4.23x
- 7 stocks in the Nikkei 225 hit 4-week highs while 1 stocks reached 4-week lows
- 0 stocks in the Nikkei 225 closed overbought while 1 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 24x
- 15 stocks in the Hang Seng hit 4-week highs while 2 stocks reached 4-week lows
- 1 stock in the Hang Seng closed overbought while 2 stocks closed oversold according to the 16-day RSI Measure
- Japan 2-Year Government Bonds are higher with yields down -0.4 basis points to -0.14%
- Japan 10-Year Government Bonds are lower with yields up 2 basis points to 0.032%
- JGBs 2s-10s Spread has widened 2.4 basis points to 0.17%
- JPY¥ is currently little changed against the USD$ at 108.86
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