Market 2018-03-21 (Rate Hike, Inflation, and more)

Market became very volatile after the rate hike, jumping to new session highs and then to session lows within 45 minutes.

Only 3 of the 11 S&P sectors finished higher, with energy (XLE +2.6%) shinning again, after the U.S. reported crude inventories fell by 2.6M barrels last week. On the flip side, consumer staples (-1.3%) ended at the bottom of the sector standings, weighed by General Mills' 8.9% drop after lowering its FY 2018 profit guidance, and techs (QQQ -0.43%) underperformed even as Facebook bounced +0.7%.

U.S. Treasury prices finished mixed, as the benchmark 10-year yield rose 3 bps to 2.91% while the Fed-sensitive two-year yield lost 3 bps to 2.31%.

Crude +2.91% to $65.39. Gold +1.69% to $1,333.80. US Dollar UUP -0.8%.

On the News

Zuckerberg finally responded to recent events "We have a responsibility to protect your data, and if we can't then we don't deserve to serve you." "I've been working to understand exactly what happened and how to make sure this doesn't happen again. The good news is that the most important actions to prevent this from happening again today we have already taken years ago. But we also made mistakes, there's more to do, and we need to step up and do it." FB was up to $173 at some point today.

Google is working on blockchain-related tech for its cloud business, according to Bloomberg.

OK, now we get the rate hike, what's next? Tomorrow Trump will roll out the plan of tariffs on $60B Chinese goods. It could be ugly.

Winners

FB +0.7% finally finds bottom. TWTR +4.4%, SNAP +3.6%...

Energy sector is strong, covering almost all the big winners: RRC, MRO, NFX, NBL, HP, APC, APA, HES, DVN....

 Tesla +1.9% shareholders approve to grant Musk $2.6B in stock options over 12 tranches in 10 years, tied to performance milestones.

CMG +4.5%.

MOMO +2.7%, however, YY -0.6%.

Losers

JWN -3.3% as company breaks off go-private talks with family.

GIS -8.9%, guiding 2018 earnings below consensus, despite ER beats. “Like the broader industry, we’re seeing sharp increases in input costs, including inflation in freight and commodities,” the company says. "We are moving urgently to address this increasingly dynamic cost inflation environment." This is alarming. Fed rate hike might be too slow too late. SJM -4.2%, K -4%, CAG -2.9%.

LUV -4.8% after lowering Q1 RASM outlook.

In After-hour

Five Below (FIVE -2.7%): Q4 EPS of $1.18 beats by $0.02. Revenue of $504.8M (+30.1% Y/Y) beats by $2.06M.

Guess (GES +3.6%): Q4 EPS of $0.62 beats by $0.08. Revenue of $792.16M (+17.5% Y/Y) beats by $36.52M. Shares +11% in AH.

My Trades Today

Sold half FB @ $172 to reduce weight back to normal
Sold YY @ $130

Comments

  1. UnknownMarch 21, 2018 at 7:06 PM

    AT&T/Time Warner looks set for win in antitrust case. DOJ has difficulties to convince the judge of the potential future harms of the merger. Judge Richard Leon joked: "I always tell people at parties, I don't have a crystal ball. In this case I have to get a crystal ball! Maybe at one of those secondhand stores somewhere!"
    This is a big deal, because it will affect other vertical merger cases, for instance, Disney/Fox. If T wins, DIS will win for sure, similar for CVS and CI.

    ReplyDelete
    Replies
    1. UnknownMarch 21, 2018 at 7:14 PM

      trump blocked the deal 觉得是他个人和CNN的仇怨。FB感觉要有一个business model相关的改变，那么对基本面的影响就不好说了。今天尾盘的回调难道是大家怕了trump明后天胡闹？

      Delete
    2. UnknownMarch 21, 2018 at 7:19 PM

      trump整天都是瞎搞，一会儿去恭喜习大大，一会儿恭喜普金，只要是独裁者他都要捧臭脚。本来内阁提议$30B Chinese goods，trump一拍脑门说，30B不够，我们要60B。明天凶多吉少

      Delete
    3. UnknownMarch 21, 2018 at 8:45 PM

      后来又说是50B，中国人说要从农产品上开始报复。他真的是老年痴呆了，还没见过像他这样傻到自己使劲砸自己的盘的。他可能不想干了。

      Delete

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