TheChek News Flow

The stock market wavered between modest gains and losses on Friday, ultimately closing little changed to preserve the week's solid gains. The S&P 500 (+0.2%) and Nasdaq Composite (+0.2%) eked out small gains, while the Dow Jones Industrial Average (-0.1%) and Russell 2000 (-0.4%) edged lower.

There was little conviction among investors ahead of the three-day weekend, and the mostly in-line economic data released today didn't generate much buzz. Retail sales increased 0.3% m/m in January, as expected, continuing a trend of modest discretionary spending. 

Investors did lean defensively, though, evidenced by the gains in the Treasury market and the leadership from the S&P 500 real estate (+1.1%) and utilities (+0.7%) sectors. The defensive posture could have been attributed to some precaution in front of the long weekend considering that the market is sitting on handsome gains this month despite the coronavirus. 

Cyclical sectors showed relative weakness with the energy sector (-0.8%) declining the most today.

NVIDIA (NVDA 289.79, +19.01, +7.0%) and Expedia Group (EXPE 122.80, +12.21, +11.0%) stood out with huge gains after reporting solid earnings reports. Roku (ROKU 130.25, -8.80, -6.3%) was up as much as 8.7% following its results, but shares sold off and closed lower by 6.3%.

Separately, the White House is considering tax incentives for middle-class Americans to purchase stocks, according to CNBC. The package could be unveiled in early fall prior to the presidential election. 

U.S. Treasuries, as previously stated, had a good session, driving yields lower across the curve. The 2-yr yield declined five basis points to 1.42%, and the 10-yr yield declined three basis points to 1.58%. The U.S. Dollar Index increased 0.1% to 99.12. WTI crude rose 1.0%, or $0.53, to $51.93/bbl. 

Reviewing Friday's economic data, which featured the Retail Sales report for January:

• Total retail sales increased 0.3% m/m in January, as did retail sales, excluding autos. Both were in-line with expectations. There were slight downward revisions to the December data.
  • The key takeaway from the report is that discretionary spending was modest in January, which will contribute to a sense that Q1 GDP growth was apt to be modest even without any impact from the coronavirus.
• Import prices were flat month-over-month in January and were up 0.2% excluding fuel. Export prices were up 0.7%, which was also the case excluding agricultural products. On a year-over-year basis, import prices were up 0.3%, and down 0.9% excluding fuel. Export prices were up 0.5%, and up only 0.2% excluding agricultural products.
  • The key takeaway from the report is that there were no inflation alarm bells in it for the Federal Reserve.
• Industrial production declined 0.3% m/m in January, as expected, following a downwardly revised 0.4% decline (from -0.3%) in December. Total capacity utilization was 76.8%, as expected, following an upwardly revised 77.1% (from 77.0%) in December.
  • The key takeaway from the report is that the weakness in production stemmed largely from a drop in production at Boeing and warmer-than-normal temperatures that reduced heating demand and weighed on the output of utilities.
• The preliminary University of Michigan Index of Consumer Sentiment for February increased to 100.9 (Briefing.com consensus 99.2) from the final reading of 99.8 for January. That was just shy of the expansion peak of 101.4 seen in March 2018.
  • The key takeaway is that positive consumer attitudes continue to be underpinned by a favorable move of the outlook, which is tied in large part to feeling of job security and income growth prospects.
• Business inventories increased 0.1% in December, as expected, while the November reading was unrevised at -0.2%.

As a reminder, the market will be closed on Monday for Washington's Birthday. 

• Nasdaq Composite +8.5% YTD
• S&P 500 +4.6% YTD
• Dow Jones Industrial Average +3.0% YTD
• Russell 2000 +1.1% YTD

Starboard Value (Jeffrey Smith) discloses updated portfolio positions in 13F filing: New MD SPY positions, Increased EBAY SCOR ACM BOX CERN holdings

 Highlights from 2019 Q4 filing as compared to Q3 2019:

• New positions in: MD (~3.88 mln shares), SPY (~2.56 mln)
• Increased positions in: EBAY (to ~7.45 mln shares from ~3.67 mln shares), SCOR (to ~2.98 mln from ~0.02 mln), ACM (to ~5.98 mln from ~5.48 mln), BOX (to ~7.27 mln from ~6.97 mln), CERN (to ~3.53 mln from ~3.33 mln)
• Maintained positions in: GCP (~5.32 mln shares), AAP (~2.57 mln shares), MGLN (~2.37 mln shares)
• Closed positions in: PRGO (from ~4.1 mln shares), RPM (from ~0.32 mln)
• Decreased positions in: NLOK (to ~26.67 mln shares from ~43.33 mln shares), MGM (to ~0.3 mln from ~2.75 mln), IWN (to ~0.98 mln from ~1.78 mln), IWR (to ~1.03 mln from ~1.12 mln)

Pershing Square (Bill Ackman) discloses updated portfolio positions in 13F filing: New A position, Lowered SBUX holding

Highlights from 2019 Q4 filing as compared to Q3 2019:

• New positions in: A (~3.25 mln shares)
• Increased positions in: HHC (to ~2.2 mln shares from ~1.19 mln shares)
• Maintained positions in: QSR (~15.08 mln shares), HLT (~10.56 mln shares), LOW (~8.61 mln shares), BRK.B (~4.02 mln shares), CMG (~1.72 mln shares)
• Decreased positions in: SBUX (to ~5.46 mln shares from ~9.31 mln shares)

Greenlight Capital (David Einhorn) discloses updated portfolio positions in 13F filing: New DXC position, Closed out VOYA DDS positions

Highlights from 2019 Q4 filing as compared to Q3 2019:

• New positions in: DXC (~0.81 mln shares)
• Increased positions in: CC (to ~6.81 mln shares from ~6.48 mln shares), SATS (to ~0.68 mln from ~0.59 mln)
• Maintained positions in: GRBK (~24.12 mln shares), GM (~6.15 mln shares), CNX (~5.88 mln shares), CCR (~5.49 mln shares), BHF (~3.57 mln shares), ADNT (~2.51 mln shares)
• Closed positions in: VOYA (from ~0.32 mln shares), DDS (from ~0.3 mln)
• Decreased positions in: ATUS (to ~2.16 mln shares from ~3.19 mln shares), SGMS (to ~1.13 mln from ~1.49 mln), AER (to ~3.2 mln from ~3.48 mln), TPX (to ~0.27 mln from ~0.47 mln), CEIX (to ~0.61 mln from ~0.68 mln)

Berkshire Hathaway (Warren Buffett) discloses updated portfolio positions in 13F filing: New KR BIIB positions, Increased OXY SU GM RH holdings

Highlights from 2019 Q4 filing as compared to Q3 2019:

• New positions in: KR (~18.94 mln shares), BIIB (~0.65 mln), VOO (~0.04 mln), SPY (~0.04 mln)
• Increased positions in: OXY (to ~18.93 mln shares from ~7.47 mln shares), SU (to ~15.02 mln from ~10.76 mln), GM (to ~75 mln from ~72.27 mln), RH (to ~1.71 mln from ~1.21 mln)
• Maintained positions in: BAC (~925.01 mln shares), KO (~400 mln shares), KHC (~325.63 mln shares), AAPL (~245.16 mln shares), AXP (~151.61 mln shares), USB (~132.46 mln shares), BK (~79.77 mln shares), DAL (~70.91 mln shares)
• Decreased positions in: WFC (to ~323.21 mln shares from ~378.37 mln shares), GS (to ~12 mln from ~18.35 mln), TRV (to ~0.31 mln from ~5.96 mln), PSX (to ~0.23 mln from ~5.18 mln), AAL (to ~42.5 mln from ~43.7 mln)

Duquesne (Stanley Druckenmiller) discloses updated portfolio positions in 13F filing: New FCX EEM SNAP positions

Highlights from 2019 Q4 filing as compared to Q3 2019:

• New positions in: FCX (~4.57 mln shares), EEM (~4.07 mln), SNAP (~1.96 mln), IWM (~1.55 mln), JPM (~1.29 mln), DISH (~0.97 mln), WFC (~0.87 mln), BAC (~0.76 mln), MPC (~0.74 mln), TCDA (~0.69 mln)
• Increased positions in: GE (to ~16.66 mln shares from ~14.85 mln shares), WDAY (to ~1.52 mln from ~0.68 mln), FB (to ~0.71 mln from ~0.14 mln), HDB (to ~1.29 mln from ~0.85 mln), GOLD (to ~4.27 mln from ~3.92 mln), UBER (to ~0.48 mln from ~0.17 mln), RETA (to ~0.43 mln from ~0.17 mln) NFLX (to ~0.58 mln from ~0.35 mln), AEM (to ~0.75 mln from ~0.59 mln), FIS (to ~0.18 mln from ~0.13 mln)
• Maintained positions in: ATVI (~1.65 mln shares), ABT (~0.92 mln)
• Closed positions in: V (from ~0.55 mln shares), OKTA (from ~0.24 mln), SHOP (from ~0.21 mln), EXP (from ~0.08 mln), NEWR (from ~0.05 mln), ISRG (from ~0.03 mln), W (from ~0.03 mln)
• Decreased positions in: MSFT (to ~1.62 mln shares from ~3.99 mln shares), PLAN (to ~0.26 mln from ~1.32 mln), SE (to ~1.75 mln from ~2.44 mln), BABA (to ~0.05 mln from ~0.48 mln), NOW (to ~0.08 mln from ~0.51 mln), COUP (to ~0.15 mln from ~0.57 mln), SMAR (to ~0.06 mln from ~0.39 mln), AYX (to ~0.11 mln from ~0.43 mln), MELI (to ~0.02 mln from ~0.17 mln)