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- Global stocks are generally lower today, while the news from US-China talks has seemed positive, the lack of specifics today has led some to take profit after the recent strong rally
- The FOMC minutes released yesterday higlighted the Fed’s desire to go slow with rate hikes in 2019, saying the Fed “could afford to be patient about further policy tightening”
- The US goverment is no closer to reopening after President Trump and Congressional leaders met yesterday and came to no agreement, the shiutdown in well into its third week
- The VIX is little changed this morning and is currently at 20.8 after closing at 19.98 yesterday
- EEM February 19 OTM Calls, SPY January 19 OTM Puts and JNK March 19 OTM Puts are some of the most actively traded options contracts in the US pre-market
- US 10-Year Treasury Bonds are higher with yields down -1.43 basis points to 2.6957%
- The US Treasury 2s-10s Spread has widened 0.41 basis points to 0.16%
- WTI Crude is currently down 0.80% to USD$51.98/bbl with the Brent-WTI spread up USD$-.073 to USD$8.95/bbl
- Gold is currently little changed -0.02% to USD$1293.29/oz
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- Big Lots (BIG) was downgraded to neutral from buy at Goldman Sachs. Big Lots’ price target was cut to USD$34 from USD$48. The downgrade follow 2 disappointing quarters of results and concerns over margin compression. Big Lots is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
- Columbia Sportswear (COLM) was downgraded to hold from buy at Needham & Co. Needham believes Columbia is fully valued at this price level. Columbia Sportswear should hit its growth targets in 2019 but Needham thinks its multiple of 20.5 times earnings is not a good entry point. Columbia Sportswear is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
- Fast Retailing (TSE:9983) reported fiscal 1Q operating income that missed consensus. Fast Retailing fiscal 1Q operating income was 104.67 billion yen while 117.52 was consensus estimate. Fiscal 1Q net sales of 644.47 trillion yen came below 656.76 billion yen expected. Full year sales guidance of 2.3 trillion yen was maintained. Fast Retailing is rated “Neutral” in our Japan Large-Cap Global Top Stock Ideas.
- Ford (F) announced a major restructuring of its European operations as it looks to raise its stock price. Ford is in talk with its unions about jobs cuts that are likely to run into the thousands. Ford is likely close multiple production plants in Europe as part of the plan, specifics have yet to be announced. Ford is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
- Kering (ENXTPA:KER) had its rating cut by USB to neutral from buy. UBS lowered Kering’s price target to 450 euros from 575 euros. UBS says the Gucci momentum that Kering has seen is topping out and led UBS to cut some of its 2019 assumptions, causing the rating cut. UBS sees 11% organic growth in 2019. Kering is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
- Nike (NKE) is the focus of a EU tax investigation of companies that use Dutch law to lower their tax payments. The EU alleges Nike and others have used the Netherlands to set up structure that “unduly reduce their tax burden”, and that is unfair. The EU probe will focus on the structure of royalty payments and how they are taxed. Nike is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
- Samsung (KOSE:A005930) is set to unveil its new flagship S10 cell phone lineup on February 20th, the Wall Street Journal is reporting. Samsung will introduce a version of the phone that is foldable and fully functional. There will be 4 versions of the S10 unveiled on the 10th anniversary of the phone. Samsung is not rated in our Global Top Stock Ideas.
See also Stocks could be due for a correction of up to 20% ‘by fire or ice’: Morgan Stanley strategist
- European stocks are lower as the global rally pauses and investors look for further drivers after 4 days of strong gains
- UK Prime Minister Theresa May is considering a Plan B for Brexit as it appears clear Parilment will not pass her plan as presently designed, according to press reports
- Opposition Labor Party leader Jeremy Corbyn is calling for a general election to end the present impasse
- The Euro Stoxx 600 is currently down -0.36%, the FTSE 100 has declined -0.1%, the DAX has fallen -0.35%, and the CAC 40 is lower by -0.76%
- Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.52x
- Oil & Gas (-0.55%), Telecommunications (+0.08%), and Basic Resources (-0.76%) stocks are the top performers in the Euro Stoxx 600 today
- Automobiles & Parts (-0.85%), Food & Beverage (-0.15%), and Utilities (+0.58%) stocks are the worst performers in the Euro Stoxx 600 today
- 260 stocks in the Euro Stoxx 600 are at 4-week highs while 10 stocks are at 4-week lows
- 9 stocks in the Euro Stoxx 600 are overbought while 1 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 19.21 after closing at 19 yesterday
- EUR€ is currently little changed against the USD$ at 1.1533
- GBP£ is currently down -0.407% against the USD$ to 1.2737
- CHF is currently down -0.205% against the USD$ to 1.0241
- German 10-Year Bunds are higher with yields down -2.9 basis points to 0.25%
- UK 10-Year GILTs are higher with yields down -1.5 basis points to 1.246%
- Asia stocks were mixed overnight as the Asian Development Bank said it sees 6.3% GDP growth in China in 2019 amid current sanctions, 5.3% if the US places sanctions on all Chinese exports
- Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.47x
- 11 stocks in the Nikkei 225 hit 4-week highs while 0 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 neutral with the advance/decline ratio for the Hang Seng closing at 1.17x
- 22 stocks in the Hang Seng hit 4-week highs while 0 stocks reached 4-week lows
- 2 stocks in the Hang Seng closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure
- Japan 2-Year Government Bonds are higher with yields down -0.9 basis points to -0.149%
- Japan 10-Year Government Bonds are higher with yields down -0.8 basis points to 0.024%
- JGBs 2s-10s Spread has widened 0.09 basis points to 0.17%
- JPY¥ is currently down -0.166% against the USD$ to 107.99