Market Insider I Stocks making the biggest moves midday: Caesars, Deere, Hostess, Sally Beauty

Fred Imbert

3-4 minutes

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A Dunkin’ location in Brooklyn, New York.
Scott Mlyn | CNBC

Check out the companies making headlines midday Monday:
Ulta Beauty, Sally Beauty — Shares of the beauty products companies fell after Amazon launched its own beauty store for professionals. Ulta shares slid more than 3% while Sally Beauty’s stock dropped more than 12%.
International Paper — International Paper shares fell 2.6% after a Stephens analyst downgraded the stock to equal weight from overweight, citing unpredictability in containerboard pricing, which the analyst said had decreased investor confidence.
Bristol-Myers Squibb — The pharmaceutical company’s stock dropped more than 7% after Bristol announced its $74 billion acquisition of Celgene has been delayed until the end of the year or in early 2020. The two companies had said the deal would close in the third quarter of 2019. Bristol also reported disappointing phase 3 results for its liver cancer drug, CheckMate-459.
Dunkin’ Brands — The fast-food restaurant company’s stock increased 2% after analysts at Wedbush upgraded it to outperform from neutral. They cited improved sales growth due to successful operations and marketing.
Deere — Shares of farming equipment maker Deere rose 2% after Jefferies upgraded the stock to buy from hold and raised it price target to $190 from $150. The firm said that despite five years of depressed agriculture fundamentals and recent trade tensions threatening business, the farming cycle is turning and Deere is well positioned.
Electronic Arts — Shares of Electronic Arts rose 2.5% in after Stephens designated the stock a “best idea.” The second season of the gaming company’s Apex Legends is set to begin next month, and Stephens estimates the game could bring in $150 million in revenue. Stephens has a price target of $120 per share on EA, more than 20% above its current price.
United Technologies — United Technologies climbed 1.6% after Cowen upgraded the industrial company to outperform from market perform. Cowen cited potentially improving margins in United’s aerospace business and the proposed merger with Raytheon as reasons for the upgrade, writing: “UTX’s demonstrated ability to combine technologies in its integrated 787 electrical power/environmental control system win bolsters our confidence it can do the same with RTN.”
Hostess Brands — Hostess Brands ticked up 2.3% after a UBS analyst upgraded the snack company to buy from neutral. The analyst identified three reasons for the upgrade: accelerating sales trends, the recent acquisition of a Chicago Bakery facility and strong free cash flow growth.
Caesars Entertainment — Caesars shares surged 16.9% after the casino operator agreed to be bought out by Eldorado Resorts for $17.3 billion in cash and stock, including debt.

—CNBC’s Marc Rod, Jesse Pound, Elizabeth Myong and Mallika Mitra contributed to this report.

Article I Opinion I Technical indicators are bullish as stock market benchmarks attempt new highs

Lawrence G. McMillan

10-13 minutes

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The prospect of lower interest rates in Europe and the U.S. has driven the stock market into a bullish stampede. And, now, overbought conditions are beginning to appear.
However, from a broader perspective, there is too much talk on financial TV about euphoria and how the rally can’t last. That kind of talk raises the possibility of much higher prices before a meaningful correction sets in. But those things are too vague to measure; we will stick with our indicators, which are still bullish.
The S&P 500 Index SPX, -0.01% broke out to a new all-time high — and did it strongly, blasting through the old highs at 2,940-2,950 points. The Dow Jones Industrial Average DJIA, +0.14% is not far behind. The Nasdaq Composite Index COMP, -0.11% as well as the Invesco QQQ Trust exchange traded fund QQQ, -0.10% are a bit further behind, although not much. But the broad-based small-caps, such as the Russell 2000 RUT, -0.69%  and a popular ETF based on it, the iShares Russell 2000 IWM, -0.77%  are way behind. (More about that later.)
The question remains whether this increase is just going to be another failed attempt at the highs or not. Most of these charts have obvious triple tops (even SPX) and perhaps even quadruple tops (the Dow, for example). Once again, we have arrived at the highs with a lot of firepower already having been spent. As it turns out, the market pullback in May was a correction — reloading for just this, an attempt at new all-time highs. We’ll see if SPX can hold these new levels. The entire May correction of just over 200 SPX points (which in its own right was pretty fast — occurring in a mere month) has been completely reversed in only 13 trading days.
There should now be support on the SPX chart at 2,890-2,900 points, the area that was most recently overcome as resistance. Below there, it’s a sharp drop down to major support at 2,720-2,730 (the March and June lows).
There is no formal resistance, since we are at all-time highs. In these situations, we often rely on the +4σ “modified Bollinger Band” (mBB) as a sort of resistance area. Well, we’ve already broken through there. SPX closed above that band on June 20, and thus a new mBB sell signal will be forthcoming. For the most part, these mBB signals have been successful. (See SPX chart; red letters indicate a successful signal, while blue letters are losing trades.)

The equity-only put-call ratios remain strongly on buy signals. Whereas we saw heavy put buying all through May and even into June, we now are seeing heavy call buying. These ratios will remain on buy signals as long as they continue to decline on their charts.
Market breadth was having trouble gaining traction on this rally, but it has finally come around. Both breadth oscillators are moving deeper into overbought territory, now that SPX has broken out to new all-time highs. That is a good thing, in that we want to see these oscillators in an overbought state when the SPX is embarking on a new rallying phase. As I said, the breadth oscillators were a little late getting into the game this time, but now they are positive. It would take at least a couple of strong negative breadth days to generate a sell signal from these levels.
There are three indicators that we watch for negative divergences, especially when the SPX is at or near new all-time highs: cumulative breadth, new highs vs. new lows, and SPX versus the Russell 2000.
Cumulative breadth using NYSE-based data made new all-time highs on three days last week. In terms of “stocks only” data (usually the more realistic measure), cumulative breadth is not yet at a new all-time high, but it’s almost there. In other words, there is no negative divergence here.
New highs are dominating new lows, in terms of all three data sets. The weakest of the three is the Nasdaq, and the strongest is the NYSE-based data (with “stocks only” in between). So this indicator, which is often an early-warning system, shows no signs of bearishness at this time.
The third measure — SPX versus RUT — is still a major negative concern. Consider the accompanying chart. It is the price of IWM (the Russell 2000 ETF) divided by the price of SPY (SPDR S&P 500 ETF Trust). You can see that the ratio between the two peaked in June 2018 and has been declining ever since. Even this last broad rally in stocks has barely lifted this ratio off its lows. In particular, since late February, SPY has been trouncing IWM. Usually this is not a good thing, but it sometimes takes a while to take effect.

This brings us to volatility. VIX VIX, -0.13%  is hovering at somewhat higher levels than in past summers, but as long as VIX is not trending upward, it’s a positive sign for the stock market. The 200-day moving average (MA) of VIX is still edging higher. So that intermediate-term concern is still in place. But as long as VIX is closing below that 200-day MA, there will not be a major correction in stocks. A close above that MA, though, should be taken as a warning sign.
The construct of volatility derivatives remains somewhat bullish, although not rampantly so. The front-month VIX futures contract is now July, and it is trading with a premium to VIX, as are the other futures contracts. Their term structure slopes upward, although not very steeply (a concern, perhaps?). Also, the CBOE Volatility Index term structure slopes slightly upward (although VIX9D has probed above VIX several times in recent days, even with SPX rallying strongly).
So, while not bearish, the whole volatility complex is not as bullish as it has been. This is unusual and should not be ignored. If VIX closes above 17 and/or the term structures invert, those will be bearish signals.
In summary, our indicators are mostly bullish, so we are bullish for the short term as well. There are some concerns regarding overbought conditions and perhaps volatility, but right now they have not materialized into anything meaningful. However, given that the broad market has failed at or near current levels several times in the past, sell signals, if they arise, should be heeded.

Source: MarketWatch

Market Insider I Stocks making the biggest moves premarket: Caesars Entertainment, Dunkin', Spotify, Deere & more

Fred Imbert

3-4 minutes

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Video slot machines at Caesars Palace in Las Vegas, Nevada.
George Rose | Getty Images

Check out the companies making headlines before the bell:
Caesars Entertainment — The casino operator’s stock surged more than 16% in the premarket after Caesars agreed to be bought out by Eldorado Resorts for $17.3 billion in cash and stock, including debt.
Dunkin’ Brands — An analyst at Wedbush upgraded Dunkin’ Brands to “outperform” from “neutral,” and raised his price target on the stock to $92 per share from $76 a share. The analyst said Dunkin’s same-store sales are at an inflection point “that is underappreciated by the Street.” Dunkin’ shares rose 1.3% to $80.55 per share.
Hostess Brands — Hostess Brands was upgraded to “buy” from “neutral” by an analyst at UBS. The analyst cited accelerating sales, the acquisition of a Chicago Bakery facility and strong free cash flow growth for the upgrade. Hostess shares climbed 1.4% in the premarket.
Deere — Jefferies upgraded the tractor maker to “buy” from “hold,” noting that a “tightened global crop supply demand balance and positive momentum in farmer net income support double-digit large equipment growth through 2020.” Deere shares rose 1.4%.
Spotify Technology — The music streaming service’s stock slid 3.6% after Evercore ISI downgraded it to “underperform” from “in line.” The firm also cut Spotify’s price target to $110 per share from $125 a share. “We simply do not see a path by which SPOT can generate the level of gross profit demanded by Street estimates over the medium-term,” Evercore ISI said.
International Paper — International Paper shares fell 1.2% after being downgraded by an analyst at Stephens to “equal weight” from “overweight.” The analyst said the downgrade reflects uncertainty around “containerboard pricing pronouncements.”
Alphabet — An analyst at MoffettNathanson trimmed his price target on the tech giant’s stock to $1,250 per share from $1,290 a share, citing a “growing lack of conviction that Google can maintain their historic 20%+ revenue growth.” Alphabet shares slipped 0.1% to around $1,123 per share before the bell.
United Technologies — United Technologies was upgraded to “outperform” from “market perform” by an analyst at Cowen. The analyst noted United’s proposed merger with Raytheon favors the Dow member, adding its decline since the deal’s announcement “offers a win-win for attractive standalone valuation or merger benefits.” United Technologies shares climbed 1.1%.
Electronic Arts — Stephens named the video game maker its “best idea in the space” ahead of the Apex Legends Season 2 release on July 2. The research firm said Fortnite’s popularity has “hit a lull,” giving EA an opportunity to “capture momentum” with its Season 2 release.
Disney — Pixar’s “Toy Story 4” hauled in $118 million in sales in its opening weekend, breaking a franchise record but falling short of expectations. Analysts had forecast the company would make at least $150 million in its first weekend.
—CNBC’s Michael Bloom contributed to this report.

Source: CNBC

News,I Market News I Why Safe Haven News,I Market News I Why Safe Haven Gold ETFs Are Soaring as Trump-Xi Trade Talks LoomGold ETFs Are Soaring as Trump-Xi Trade Talks Loom

By Matthew Johnston

4-5 minutes

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Gold ETFs, widely regarded as safe havens when equities are expected to fall, are soaring in tandem with the precious metal itself even as stocks reach record highs. The SPDR Gold Shares ETF (GLD), VanEck Vectors Gold Miners ETF (GDX), SPDR Gold Minishares Trust (GLDM), iShares Gold Trust ETF (IAU) and the GraniteShares Gold ETF (BAR) have all taken off over the past month as gold reaches highs not seen since 2013, according to Barron’s.
One of the main drivers of the recent gold rush is the continuing uncertainty surrounding the U.S.–China trade war and the potential economic fallout. All eyes will be on U.S. President Donald Trump and Chinese President Xi Jinping as the two leaders are expected to meet at some point during the G-20 summit, which is set to kick off Friday in Japan. An unfruitful meeting could result in additional tariffs, adding further weight on global trade and equity prices, while providing gold, gold stocks and gold ETFs with a significant boost. 

What It Means for Investors

Investors tend to flock to assets considered safe havens when the economic outlook begins to darken and the downside risks to stock prices multiply. The ongoing trade conflict between the world’s two largest economies has been the main catalyst to that darkening outlook, as forecasts of economic growth and corporate earnings show signs of weakness.
Although gold is not the only available safe-haven asset, there are a number of reasons it’s attracting a lot of investor cash right now. Government and investment-grade corporate bonds are often seen as safer than equities. Bonds offer yield, but those yields have been at historic lows over the past decade.
Even one of the safest of safe assets, U.S. Treasuries, is looking less attractive after dovish comments made by the Federal Reserve at last Wednesday’s monetary policy meeting sent the benchmark 10-year Treasury yield below 2%, to levels not seen in several years, according to The Wall Street Journal.
Meanwhile, gold rallied as the prospect of looser monetary policy weakened the outlook for the U.S. dollar. A cheaper greenback is bad for dollar-denominated assets, making them less attractive. But it’s good for gold, whose price tends to move in the opposite direction as the dollar. It’s also good for assets tied to the strength of gold, like gold stocks and the gold ETFs that hold them.
The VanEck Vectors Gold Miners ETF has risen nearly 20% since the start of the year and over 23% in the past month alone. It contains shares of 46 major gold miners, including Newmont Goldcorp (NEM), Barrick Gold (GOLD), Newcrest Mining (NCM.Australia), Franco-Nevada Corp. (FNV), and Agnico Eagle Mines Ltd. (AEM).
The iShares Gold Trust ETF is up 9% both since the start of the year and over the past month. The fund tracks the price of gold through holdings of physical gold bullion in a trust, with each share of the trust representing one-tenth of an ounce of gold.

Looking Ahead

The performance of gold and gold ETFs will depend, in large part, on the outcome of future trade negotiations and whether existing tariffs are lifted or new ones are imposed. “Tariffs can be thrown around as an economic bomb for anything now,” Peter Boockvar, CIO at Bleakley Advisory Group, wrote in a note. “Gold is finally back above $1,300, and I’m shocked it’s not much higher.”
Having written his note at the end of May, Boockvar has less reason to be shocked with the price of gold now hovering around $1,400 an ounce. If the Trump–Xi negotiations turn sour and gold prices skyrocket, he might just forget he was ever shocked at all. 

World News I Pompeo visits Saudi Arabia as U.S. prods Iran for talks

reuters.com

Stephen Kalin

3-4 minutes

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RIYADH (Reuters) - U.S. Secretary of State Mike Pompeo met with Saudi Arabia’s king and crown prince on Monday amid heightened tensions with Tehran after President Donald Trump called off a military strike to retaliate for Iran’s downing of a U.S. drone.

FILE PHOTO: U.S. Secretary of State Mike Pompeo speaks to the media at Joint Base Andrews, Maryland, U.S. June 23, 2019, before boarding a plane headed to Jeddah, Saudi Arabia. Jacquelyn Martin/Pool via REUTERS

Pompeo thanked King Salman for meeting him on “such short notice” at their talks in the Saudi city of Jeddah, according to a pool report of journalists traveling with him. In reply, the king called Pompeo a “dear friend”.
Pompeo then met Crown Prince Mohammed bin Salman, the kingdom’s de facto ruler, for a working lunch.
The top U.S. diplomat had told reporters before departing on a trip to Saudi Arabia and the United Arab Emirates that Washington wanted talks with Tehran, even as it planned to impose new economic sanctions.
“We’ll be talking with them about how to make sure that we are all strategically aligned, and how we can build out a global coalition, a coalition...that understands this challenge,” Pompeo said.
Relations between longtime foes Iran and the United States have deteriorated since Trump withdrew Washington a year ago from a 2015 accord that curbed Tehran’s nuclear program in exchange for easing sanctions.
Tensions have flared following attacks in recent weeks on oil tankers in the Gulf which the United States blames on Iran, the shooting down of the drone last week, and repeated attacks on Saudi airports and oil installations by Yemen’s Iran-aligned Houthis.
Washington and Riyadh have publicly accused Tehran of being behind the tanker attacks near the Strait of Hormuz. Iran has denied involvement in the blasts.
The UAE has called for a de-escalation following the attacks, including on four vessels off its coast last month which an initial investigation said was carried out by a state actor without naming a country.
Pompeo is expected to discuss “ways to support maritime security” when he meets Abu Dhabi’s crown prince, the U.S. Mission to the UAE tweeted.
There was no public indication of whether Pompeo would raise with Saudi leaders the murder of journalist Jamal Khashoggi last year inside the kingdom’s Istanbul consulate. A U.N. report last week called for the crown prince and other senior officials to be investigated given credible evidence against them.
The Trump administration is pressing the Saudis to show “tangible progress” toward holding to account those behind the killing and wants them to do so before the one-year anniversary of his death on Oct. 2, a senior administration official told Reuters this month.
But Trump told NBC on Sunday he did not discuss the murder in a recent phone call with the crown prince. Asked if the FBI should investigate, he responded: “I think it’s been heavily investigated.”
The murder tarnished the crown prince’s international standing. The CIA and some Western countries believe he ordered the killing, which Saudi officials deny.

Reporting By Stephen Kalin in Riyadh and Maha El Dahan and Sylvia Westall in Dubai; Editing by Raissa Kasolowsky and Peter Graff

Source: Reuters

Futures Indication I Dow futures higher amid growing tensions between Iran and the US

Silvia Amaro

1-2 minutes

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U.S. stock index futures were higher Monday morning, as traders monitor geopolitical tensions, in particular between the United States and Iran.
At around 05:23 a.m. ET, Dow futures rose 51 points, indicating a positive open of more than 17 points. Futures on the S&P and Nasdaq were both seen marginally higher.

Investors are following developments in the trade war between the U.S. and China, after the Chinese government said it would like Washington to stop “inappropriate” action against Chinese firms.
However, market players are also heavily focused on geopolitics and in the escalating tensions between Iran and the U.S. Over the weekend, President Trump announced that the U.S. will impose “major” additional sanctions on Iran on Monday but Iran dismissed the threat as “just propaganda.”
On the data front, the calendar is thin with Dallas Fed manufacturing data due at 10:30 a.m. ET.
There are no major corporate earnings to note.

Source: CNBC