Market 2017-10-24 (CAT, MMM, BIIB, and more)

CAT, MMM and GM all deliver solid earnings, which lift the whole market today.

Cash rotates into industrial, basic materials, energy, auto and financials. At the meantime, healthcare, telecommunications and utilities suffer. Healthcare, is hurt by BIIB ER; the other two, along with REIT and bonds, are usually defensive choices, all of which perform poorly this year.

Winners

CAT (+4.9%), they surprised the market with $1.95 EPS ($0.85 Q3 last year), Revenues +24.5% Y/Y. Outlook for 2017: Adjusted profit per share is now expected to be $6.25 (up from $5.00), on sales of $44B (confirming the high point of its $42B-$44B previously stated range). Share is almost doubled in a year with P/E ~21. I will not chase high.

MMM (+5.9%), revenues +6% Y/Y. Updated its outlook for 2017: Earnings are expected to be in the range of $9.00 to $9.10 per share (vs. $8.80-$9.05), with organic local-currency sales growth of 4%-5% (vs. 3%-5%).

GLW (+6.4%) reaches new high. Revenue +5.9% Y/Y. I like this stock, waiting for entry chance.

GM (+3%) They beat because of low expectations. Revenues -13.6% Y/Y due to the auto industry cycle (peaked last year). However, P/E as low as 7 and 3.4% dividend is attractive to some investors.

 USO (+1.1%) U.S. crude oil settles at $52.47/bbl, the highest finish since April 17, and Brent +1.7% to $58.33/bbl after Saudi oil minister Khalid al-Falih said his country would “do whatever it takes” to bring global crude inventories back to their five-year average. I expect crude price will keep recovering into 2018.

Losers

WHR (-10.6%) The company now expects FY17 EPS of $13.60 to $13.90 vs. $14.50 to $15.00 prior and $14.62 consensus. Whirlpool will stop supplying Sears with some products. Whirlpool management says margins are under pressure due to ongoing raw material inflation and an unfavorable product sales mix. Global cost-based prices increases are being pushed to Whirlpool customers in Q4 and Q1 of 2018. I expect the continuous weakness in WHR stock price into 2018.

 BIIB (-3.9%) Although ER beats (EPS +22%, revenues +4% Y/Y), investors are disspointed with the new drug sals in US. I expect BIIB will be traded $300-$340 for a while, before any news on their pipeline regarding Alzheimer's disease is released. Big Pharma/Biotech are mostly in red today.

ER in AH

CMG Q3 EPS of $1.46 misses by $0.17. Revenue of $1.13B (+8.7% Y/Y) misses by $10M. -8% AH now.

T Q3 EPS of $0.74 misses by $0.01. Revenue of $39.67B (-3.0% Y/Y) misses by $450M. -1.4% AH now.

AMD Q3 EPS of $0.10 beats by $0.02. Revenue of $1.64B (+25.2% Y/Y) beats by $130M. -6.7% AH now.

JNPR -6.7% AH following a Q3 earnings report that was mostly in line but guided Q4 low.

ILMN Q3 EPS of $1.11 beats by $0.12. Revenue of $714M (+17.6% Y/Y) beats by $20.73M. Shares +1.5% now.

IRBT Q3 EPS of $0.60 beats by $0.13. Revenue of $205.4M (+21.8% Y/Y) beats by $0.88M. +5% AH now.

My Trades Today

Day-trade UAL, $58.4 ---> $60

Day-trade CELG $119.6 ---> $121

Triple-down GE, average price down to $21.95

Add more O to lower average price to $55.6

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