Market 2018-01-19 (AMZN, AAPL, IBM, and more)

Market has another strong week, despite the possible government shutdown starting this midnight. Dow Jones manages to stay above 26,000. Dollar continues its slide. UUP YTD -1.7%, after 9.2% drop last year. Weak dollar may boost exports and corporate earnings. However, it could accelerate inflation and hurt US economy in a long run.

Crude -0.58% to $63.58. Gold +0.41% to $1,332.60.

Amazon (+0.1%) will increase the monthly price of Amazon Prime from $10.99 to $12.99, an 18% increase. Although Wall Street praises such move in early hours, I believe this may turn low-incomers away to Walmart. Share price erased almost all the early gains to finish flat.

Big price moves are mainly affected by earnings and ratings.

Winners

Financial Sector is strong, RF +2.9%, Q4 EPS of $0.27 beats by 1 cent. Revenue of $1.47B (+5.8% Y/Y) beats by $30M. MS +2.9%, GS +2.1%, C +1.2%, FRC +4.6%.

 NVDA +2.5% to finish above $230, after BofA raises its PT to $275 from $251. AMD +1%.

SQ +5.7%, Nomura lifts his PT from $48 to a Street-high $64. I think it is rising too fast.

MOMO +4.3% with strong volume, signal of possible breakout. YY +1.6%.

KSS +4.1%, PT is raised by Jefferies to $100 from $66. M +1.5%, JWN +1.5%.

Lowe's (LOW +3.5%) has gotten a PT hike from BTIG, to $115 from $95. HD +1.5%.

Nike (NKE +4.8%) is off to a strong start after Wedbush upgrades shares to Outperform from Neutral with PT of $74 from $57.

CMG +1.8% after Raymond James upgrades shares to Market Perform from Underperform.

NTES +1% received praise from GS with a Street-high $432 PT.

Caterpillar (CAT +0.9%) PT hiked to $192 at Credit Suisse.

Losers

GE -3% is bleeding again after Deutsche Bank analyst John Inch says that GE's current cash squeeze and growing liquidity pressure may force the company to raise equity capital.

IBM -4%, despite ER beat yesterday. FY18 guidance is a little disappointed: Operating EPS flat on the year to “at least $13.80” (consensus: $13.92). FCF expected at about $12B. IBM expects a headwind from cash tax payments to the tune of about $600M year-to-year. Analysts are also concerned about the margin erosion. I am still bullish on IBM as their cloud buniness is growing 22%, overall revenue is finally growing and the company is focusing on innovations. The P/E ratio is relatively low among Tech giants. Dividend and buyback program provides protection to shareholders.

Apple -0.4%, suppliers drop as key analyst (KGI Securities analyst Ming-Chi Kuo) lowers iPhone X lifetime sales forecast from 80M to 62M units. Qorvo (QRVO -3.3%), Cirrus Logic (CRUS -3.7%),  Skyworks Solutions (SWKS -3%), Broadcom (AVGO -1.3%), and Lumentum (LITE -5.5%). 

AXP (-1.8%) also falls after ER beat amid the suspension of buyback program (due to big tax-purpose writedown).

Zillow (Z -3.2%) receives Hold rating from Stifel with $38 PT.

MU (-2.8%) and WDC (-0.9%) struggle today with average volume.

My Trades Today

Added more LIT @ $38.1

Sold FRC @ $89.6 to take 4% profit overnight (bought @ $86.2 yesterday)

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