Market 2017-10-10 (WMT, COST, TSLA, NVDA, UAL....)

(I will be on vacation for a week, during which period there will be no updates. I will update daily again starting from 10/18. Wish me good luck in Vegas!)

Catalan president declares 'deferred independence' in Spain. Then he steps back from the brink of crisis, seeking talks with the Spanish government rather than an immediate declaration of independence from Spain. I have no idea what is going to happen next.

According to Moody's, Americans earning between $25.3K and $43K devoted 15.6% of their income toward servicing debt in 2016 - the first increase in that ratio since 2010. Before worrying too much about lenders just yet, Moody's Shenn reminds that debt servicing levels remain "very manageable," noting growing wages, low interest rates, and longer term loans.

Redbook Chain Store Sales: +3.2% Y/Y vs. +4.1% last week. October sales are expected to increase 3.6%. Redbook Chain data (chart below) indicates retailers are probably doing fine after all.



WMT (+4.5%) flies to 52-week high, lifts retail peers (COST, TGT). WMT reiterates 2018 guidance expects sales to grow at or above 3% in 2019. Sales growth of eCommerce is anticipated to be ~40%. Plan to add 1K online grocery locations in the U.S. and fewer than 15 Supercenters in FY19. Walmart International is expected to open about 255 new stores, including a focus on Mexico and China. A new two-year $20B buyback shows their confidence and deep-pocket.

Morgan Stanley analyst Adam Jones takes his price target on Tesla (TSLA, +3.7%) to $379 from $317 to factor in the company's position with infrastructure in front of the "EV revolution." I have no idea --- what happen if no cars show up at those charge stations.

Nvidia (NVDA, +1.8%) announces partnerships with logistics company Deutsche Post DHL Group (DPDHL) and automotive supplier ZF to deploy a test fleet of self-driving delivery trucks starting next year.

UAL, AAL raise unit revenue guidance, all airlines have a nice day. I am still cautious about their Q3 earnings.

DIS is flat due to the wild fire near LA park, despite the new Star Wars trailer (the Last Jedi) released last night. The trailer is pretty good, cannot wait to see it in theater.

USO (+2.8%), UNG (+1.6%) bounce back. I expect they will stay in a narrow range for a while.

The price of iron ore has dropped below $60/metric ton on concerns that demand will suffer from an environmental crackdown in China and as supplies from top producer Australia have increased. Supply is strong, price pressure hangs.

My Trades Today

Sold all my position in UAL @ $58.2.

Double down ESRX to lower my average price to $58.6.

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