• According to news reports, a meeting between US President Donald Trump and Chinese President Xi Jinping has been pushed back to the end of April. There was hope that both leaders would meet in March following a trip to Europe by Chinese President Xi.
• US stocks index futures are declining, well off early morning highs, with front month Dow Jones minis –0.18%, S&P 500 minis –0.13% and Nasdaq 100 minis –0.02%
• Despite yesterday’s rally in the S&P 500, the benchmark US index failed to break above 2,815 which is a technical resistance level that formed since October 2018. The S&P 500 has rallied 20% since hitting lows in December 2018 but the 2,815 appears to be a level where worries about decelerating global growth overwhelms any enthusiasm for US large-cap stocks
• Following the 2008 housing market collapse, US homeowners are finally seeing the equity in their houses surpassing mortgage debt. The trend started in 2011 with home equity values nearly doubling since hitting a lot in 1Q of CY2011.
• JP Morgan argues that greater institutional coverage of small-cap stocks will help drive higher valuations and lower volatility. Higher coverage should lead to higher liquidity.
• The VIX is little changed this morning and is currently at 13.6 after closing at 13.41 yesterday
• Eli Lilly (LLY) March 15 OTM Calls, General Electric (GE) March 15 OTM Puts, iShares MSCI Emerging Markets ETF (EEM) March 15 OTM Calls, and SPDR S&P Oil & Gas Exploration & Production ETF (XOP) June 2019/September19 OTM Puts are some of the most actively traded options contracts in US pre-market trading this morning.
• US 10-Year Treasury Bonds are lower with yields up 0.9 basis points to 2.6303%
• The US Treasury 2s-10s Spread has widened 0.9 basis points to 0.17%
• WTI Crude is currently up 2.44% to USD$58.26/bbl with the Brent-WTI spread down USD$-2.54 to USD$8.82/bbl
• Gold is currently down -0.82% to USD$1298.38/oz

Stocks Trending in the News

• AT&T’s (T) is hiking the price of its TV service for the second time since January. AT&T told a judge prices would fall if it were allowed to buy Time Warner during an antitrust case last year. But here were are with prices rising again, with many critics complaining that regulators are not protecting customers. AT&T is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
• Boeing (BA) has seen all of its 737 Mac aircraft around the world grounded. It has USD$600 billion in backlog of orders for the model and buyers are already suggesting they may cancel and opt for Airbus (AIR) models instead. There have not been any cancelations yet though a number of buyer have expressed the potential for canceling. Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
• Brookfield Asset Management Inc. (TSX: BAM.A) has agreed to purchase a majority stake in Oaktree Capital Group LLC (OAK), a combination that will rival Blackstone Group LP (OAK) as the world’s largest alternative asset manager. Brookfield will pay USD$4.7bn for a ~62% stake in Oaktree Capital Group. Combined, the firms will have roughly USD$475bn of assets under management that generates about USD$2.5bn of fee-related revenue. Brookfield Asset Management is rated “Unattractive” in our Canada All-Cap Global Top Stock Ideas. Oaktree Capital Group is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas. Blackstone Group LP is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas.
• Casino (ENXTPA:CO) announced it has increased its asset disposal plan to at least 2.5 billion euros by the first quarter of 2020. Casino completed it original 1.5 billion euro plan ahead of schedule and said it received additional indications of interest that led it to increase the size of the plan. Casino guided it looks to open 300 premium and convenience stores by 2021 and increase e-commerce sales to 30% of sales in 2021 up from 18% today. Casino is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.
• Dollar General (DG) reported fourth quarter EPS of USD$1.84 just a touch below USD$1.88 consensus. Dollar General reported same store sales growth of 4% beating consensus of 2.6%. Its quarterly dividend was hiked to 31 cents per share from 29 cents. Dollar General gave fiscal 2019 EPS guidance of USD$6.30-6.50, below consensus of USD$6.65. Dollar General 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.
• Facebook (FB) suffered large-scale outages for its Facebook and Instagram networks yesterday, with users unable to use the site fir up to 11 hours in various regions of the world. Sporadic outages still appear to happening but mostly the site seems to be back to normal. Facebook has already mentioned the possibility of refunding advertisers whose advertisement that were paid for were never broadcast. It is very unusual for such a mature site to be down do long. Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
• Microsoft (MSFT) announced it is working with Oxford Biomedica Plc (LSE:OXB) on developing better ways to repair genes in those with life-threatening diseases. Microsoft will contribute its Azure cloud and machine learning software to help Oxford increase the productivity and purity of the viruses it uses in the repair of malformed genes. The initial collaboration is for 2 years with the option to extend it. Microsoft is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas. Oxford Biomedica Plc is not rated in our Global Top Stock Ideas.

International Stocks Recap

• The Nikkei 225 finished down --0.02%, the Hang Seng ended up +0.15%, the Hang Seng China Enterprise up +0.36%, and the CSI 300 was -0.69%
• Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.8x
• 16 stocks in the Nikkei 225 hit 4-week highs while 25 stocks reached 4-week lows
• 3 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 neutral with the advance/decline ratio for the Hang Seng closing at 1x
• 4 stocks in the Hang Seng hit 4-week highs while 1 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 -0.8 basis points to -0.162%
• Japan 10-Year Government Bonds are lower with yields up 0.1 basis points to -0.041%
• JGBs 2s-10s Spread has widened 0.9 basis points to 0.12%
• China RMB 2-Year Government Bonds are higher with yields down -0.1 basis points to 2.659%
• China RMB 10-Year Government Bonds are lower with yields up 0.5 basis points to 3.152%
• China Government RMB 2s-10s Spread has widened 0.6 basis points to 0.49%

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