Market 2017-11-2 (Tax reform, and more)

President formally names Powell as Fed pick, which has already been priced in.

GOP rolled out their tax reform plan. Analysts think their math doesn't add up. The legislation will take months if not longer. Nevertheless, there are a lot of victims today. First of all, middle class will not benefit. Also homebuilders, hardware stores and private investment institutions are hurt.

Homebuilders Toll Brothers (TOL -6.1%) LEN (-3.3%), MDC, BZH, HOV, KBH, DHI, PHM, TMHC are tumbling thanks to the GOP tax plan which would seek to cap the amount of mortgage interest deductibility at $500K vs. the current $1M. ETF XHB (-2.7%) ITB (-2.5%). Hardware stores are also down, HD (-1.8%).

Private equity names are tumbling as the GOP tax plan would limit interest deductions of many companies to just 30% of EBITDA. APO -3.1%, Blackstone (BX -1.1%), KKR -2.3%.


Winners

JUNO (+21.8%) ER beats. upgraded to BUY with new price target of $65 by SunTrust.

SunPower (SPWR +15.7%) on Q3 profit; sees 'sustainable profitability" by H2 2018.

LB (+8.2%) reported sale growth in October.

YUM (+6.5%) Q3 EPS of $0.68 beats by $0.01. Revenue of $1.44B (-5.3% Y/Y) beats by $50M.

QCOM (+2.6%) Q4 EPS of $0.92 beats by $0.11. Revenue of $5.9B (-4.4% Y/Y) beats by $100M.

CHKP (+3.5%) jumps back after the drop yesterday. I haven't got the chance to buy below $100.

Most REITs up, as bond price drops.

Retailers up hope to benifit from tax relief, e.g., COST, WMT, TGT, KR, DG, DLTR. COST October sales solid +7.5% vs. +6.5% consensus.

Losers

FEYE (-10.3%) disappoint guidance.

TSLA (-6.8%) production delay delay delay, as always. Investors are finally tired this time.

CHK (-7.7%) dissapointing earnings.

FB (-2%) due to the increasing cost on security (damn Russians). Their earning capability is amazing, this may create buying opportunity.

TEVA (-20%) headwind on generic drug makers is getting stronger, stay aside.

AGN (-5%) reported mixed ER. Patent loss is troublesome. Biotech sector (ETF: IBB) down almost 10% in the past month although big Pharma companies reported mixed earnings.

FIT (-4.5%) Q3 EPS of -$0.01 beats by $0.03. Revenue of $393M (-22.0% Y/Y) beats by $1.3M. Despite the share drop today, I still hold my view on FIT (click HERE). I will probably buy back my shares (I sold yesterday) within next few days.

UAA, MAT continue their slide, as I predicted after their earnings. It is not bottom yet.

Earnings AH

AAPL Q4 EPS of $2.07 beats by $0.20. Revenue of $52.6B (+12.3% Y/Y) beats by $1.81B. 18Q1 guidance: revenue between $84 ~ $87B with gross margin 38-38.5%. +3.5% AH

AIG posted big loss, -3.6% AH

SBUX Q4 EPS of $0.55 in-line. Revenue of $5.69B (-0.4% Y/Y) misses by $110M. to sell the Tazo brand to Unilever (UL) for $384M. -6.9% AH 
I think it is entry point --- Starbucks long-term targets: Annual global comparable store sales growth of 3% to 5%; annual consolidated net revenue growth in the high single digits; annual EPS growth of 12% or greater; annual ROIC of 25% or greater.

DATA Q3 EPS of $0.08 misses by $0.01. Revenue of $214.92M (+4.3% Y/Y) misses by $4.52M. -11% AH
I will buy if it drops further to 60s.

P Q3 EPS of -$0.06 beats by $0.02. Revenue of $378.64M (+7.6% Y/Y) misses by $1.93M. -6% AH

HLF Q3 EPS of $0.82 misses by $0.06. Revenue of $1.09B (-2.7% Y/Y) misses by $10M. -6.4% AH

My Trades Today

Sold 20% O @ $55.4.

Bought more OHI and GILD.

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