Market 2018-01-22 (BIotech, Casinos, NFLX, and more)

Wall Street is having party again. Stock indices trade higher after senators reached deal to fund the government until 2/8. This will mark the 4th time of short-term extension since last Oct --- really lame, stupid and annoying.

IMF says US economy to grow nearly 3 percent in 2018 because of tax cuts.

Market is also boosted by biotech M&A --- two big deals worth more than $20B. IBB +3.1%. If you have followed me closely, I have mentioned Biotech M&A on 1/5 with a long list of candidates (LINK), also called that Biotech reversed the trend to bullish on 1/9 (LINK). Since then, IBB has gained +6.6%.

Crude +0.68% to $63.74. Gold +0.09% to $1,334.30.

Bitcoin dives again. European Union will follow South Korea and China on cryptocurrency regulation to prevent money laundering, terrorism financing on virtual currency platforms and also plans to set limits on cryptocurrency trading. The Friday-Saturday rally looks more like dead-cat bounce now.


Winners

BIVV (+61.9%) is bought by Sanofi (French company) for $11.6B ($105/share cash, 64% premium). BIVV is a spinoff from BIIB, which focuses on hemophilia treatments. I am extremely happy with this as I have been holding BIVV since the spinoff a year ago.

JUNO (+26.8%) is bought by CELG (+0.3%) (news came out 1 week ago) for $9B ($87/share cash), slightly lower price than what GILD paid for Kite. I have covered this trade before. I believe it is good opportunity to buy CELG around $100. Its recent acquisitions have rebooted its pipeline for future growth. EDIT +13.9%, BLUE +10.6%, CLLS +10.2%, SRNE +20.7%.

SQ (+6.4%) is pumped higher and higher.

HAL +6.4%, highest level in nearly a year following better than expected Q4 results: EPS of $0.53 beats by $0.07. Revenue of $5.94B (+47.8% Y/Y) beats by $310M. SLB +4.4%, NOV +2%, BHGE +2.5%, SPN +4.2%...

FB +2.3% finally shakes off recent headwind.

AMZN +2.5%, after a year delay, Amazon finally open its first automated grocery store - promising "no lines, no checkouts, no registers" - is opening to the public in Seattle. Alibaba opened similar stores in Hangzhou last year, which were not well received.

GNC jumps another 8% as short-squeeze continues.

WYNN (+8.7%) after reporting a 30% jump in Q4 revenue to $1.69B, EPS of $1.40 beats by $0.02. Expect good data from Sands and other casinos. LVS +3.5%, MGM +2.1%.


Losers

SANM (-23.6%) sinks after earnings warning. SANM now sees FQ1 (Dec.) adjusted EPS of $0.48 on revenue of $1.74B, compared with its previous guidance of $0.68-$0.74 EPS and revenue of $1.75B-$1.8B; analyst consensus for the quarter was $0.71 EPS earnings on sales of $1.77B. For FQ2 (Mar.), the company expects EPS of $0.40-$0.50 on revenues of $1.6B-$1.7B, below analysts consensus of $0.70 EPS and $1.73B in sales.

Piper Jaffray warns that Ulta Beauty (ULTA -3.7%) could sees some disruption as the selection of brands offered at stores is reset.The new mix of products could pressure margin and warns that the Drew Barrymore Flower Beauty launch might fall short of hyped-up expectations. PJ has a Neutral rating on ULTA and $230 PT.

GE -0.6% despite BHGE has a nice day.

PANW -2.1% after GS's downgrade from Buy to Neutral and PT from $171 to $168.


AH Earnings

Netflix (NFLX +3.2%): Q4 EPS of $0.41 in-line. Revenue of $3.29B (+32.7% Y/Y) beats by $10M. Share jumps another +8.8% AH.

TD Ameritrade (AMTD): Q1 GAAP EPS of $0.52 in-line. Revenue of $1.26B (+46.7% Y/Y) beats by $60M. Shares +2.5%. Another piece of news from TD: it launches 24-hour access to U.S. stock markets for selected customers from Sunday at 8PM ET and Friday at 8PM ET, 120 hours non-stop.

You can check my "Next Week Preview" for the coming Major Earnings.

Comments

  1. steve5611January 22, 2018 at 2:52 PM

    What's your trade today?

    ReplyDelete
    Replies
    1. UnknownJanuary 22, 2018 at 2:59 PM

      I haven't made any trade today. I missed the opportunity to add more CELG shares this morning. However, I have recently added more cash to my Robinhood account as I prepare for similar buying chances.

      Delete

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