Market 2018-01-29 (GE, AAPL, WYNN, and more)

Market is broadly lower today, especially in Energy and Telecom Sectors. In my post yesterday, I have warned about the possible selling pressure from pension fund portfolio adjustments.

Dollar recovers a little (UUP +0.3%). Crude -1.06% to $65.44. Gold -0.81% to $1,341.10.

10 year treasury jumps to 2.7%, highest since April 2014. YTD it has raised from 2.4% to 2.7%. As FED cuts its balance sheet, treasury will probably go higher, which increases borrowing cost all across the economy.

Winners

Dr Pepper Snapple Group (DPS +22.4%) announces a merger with Keurig Green Mountain. Dr Pepper Snapple shareholders will receive $103.75 per share in a special cash dividend and retain 13% of the combined company.

MOMO +4.6%, it has gained 9.4% after I called it break out last Thursday.

GILD +4%, it also has a great run recently. Biotech Sector (IBB +0.4%) is doing well in today's selloff.

Hot Tech names, e.g. NFLX +3.6%, AMZN +1.1%, NVDA +1.5%, still attract investors.

LMT +1.8% after ER beats.

GE +0.9% following a positive mention from Mario Gabeli on CNBC. Gabelli said he now owns $40-50M GE shares; he thinks the stock at ~$16 is attractive and sees it rising to the low $20s in 2 years.

Losers

Apple (AAPL -2.1%) will halve its iPhone X production target to 20M units for 18Q1, according to Nikkei Asian Review sources. Apple suppliers moved lower on the news.

A leaked plan where the Trump administration would push for a nationalized 5G network would be bad for big carriers AT&T (T -1.5%), Verizon (VZ -1.1%), T-Mobile (TMUS -1%) and Sprint (S -1.9%) as they are working on building their own networks.

Home Builders suffer as mortgage rates go higher. ITB -2.8%, XHB -1.9%, LEN -4.1%, DHI -4%, PHM -3.2%.

F -4.6% after its China chief Jason Luo has resigned after leading the U.S. automaker’s Chinese operations for roughly five months. Ford's sales in China slipped 6% in 2017 compared with a 3% increase for the industry overall.

 SOHU -15.8% after reporting Q4 EPS of -$2.01 misses by $0.57. Revenue of $509.63M (+23.8% Y/Y) misses by $14.24M.

SOGO -9.3% reported 1st earnings after IPO: Q4 EPS of $0.10 beats by $0.03. Revenue of $277.79M (+61.9% Y/Y) misses by $2.66M.

WYNN -9.3% following -10% last Friday. More brokerage firms have turned cautious on it: UBS moving to a Neutral rating from Buy; Morgan Stanley giving a downgrade to Equalweight from Overweight; JPMorgan calling the casino operator the "single largest individual CEO dependency" name in the sector. JPM also points out that Wynn's name on his hotels could be a detriment to traffic. JPM predicts $150 in near-term. Share finishes @ $163.48. LVS +4.7%, MGM +2.7% seem to benefit.

VMware (VMW -16.6%) plunges after CNBC reported that the company could buy Dell in a reverse merger.

AH Earnings

SANM reports Q1 EPS of $0.48 misses by $0.05. Revenue of $1.74B (+1.2% Y/Y) misses by $20M. Shares -1% in AH. The ER miss has already priced-in after the company issued the warning on 1/21.

Hawaiian Holdings (HA) reports Q4 EPS of $1.10 beats by $0.02. Revenue of $686.55M (+8.5% Y/Y) beats by $5.03M. Shares +1% in AH.

My Trades Today


  • Bought back the shares of NTES @ $328 (sold 1/3 position last Friday)
  • Sold BGS @ $33.7
  • Add more PG @ $87

Earnings Tomorrow


  • pre-market:     GLW, MCD, PFE, ZBH
  • post-market:    AMD, BXP, EA, ILMN

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