Market 2018-02-06 (XIV, MU, MOH, and more)

It is a choppy day. The early tradings are similar to yesterday --- opened low followed by a quick bounce. However, indices hung around afterwards and marched north around 2:30 pm. Dow +2.3% , S&P +1.7% & Nasdaq +2.1%. I think the -10% correction is over. The indices retreated back to pre-TAX-Reform level in the intraday low. However, it could remain the choppy way for near-term. Utilities has the worst performance, XLU -1.5% despite the broad market rally in late hours.

Treasurys: 30-year -0.9%. 10-yr -0.6%. 5-yr -0.4%. 10-yr note stays @ 2.8%.

Commodities: Crude -1.1% to $63.45. Gold -0.9% to $1,324. The American Petroleum Institute (API) reportedly shows -1.05M barrels of crude oil for the week ending Feb. 1 vs. last week's build of +3.23M barrels. Gasoline reportedly shows -227K barrels and distillates show a build of +4.52M barrels. I think refiners face margin challenges.

Yesterday, many analysts called for buying dip instead of being panic. Goldman's David Kostin isn't seeing a specific catalyst for the panicky action in stocks yesterday, but does note the stumble in markets is occurring when a high percentage of companies are in a blackout period for share repurchases. Kostin and team see no change to the fundamentals behind the bull market, and reiterate their year-end S&P 500 target of 2,850.

Credit Suisse says the last day of trading XIV will be 2/20.

Winners

MU +11.4% after the company hiked earnings estimate #. NVDA +5.6%, WDC +3.4%, 

GM +5.9% after reporting Q4 EPS of $1.65 beats by $0.27. Revenue of $37.7B (-5.5% Y/Y) beats by $1.15B. GM is better positioned than F for sure.

SWKS +10.4% after reporting ER beats. SWKS is one of Apple's supplier.

TRIP +14.7% continues its rally.

 CELG +2.7% after reporting that triplet therapy phase III shows treatment benefit in late-stage multiple myeloma study. IBB +2%, AGN +2% after reporting ER beats.

Losers

Molina Healthcare (MOH -5.9%) drops amid perceived risk to South Florida business. It that has been chosen as a candidate to negotiate the 2019 managed care contract for Region 11 of Florida Medicaid program, a contract Molina now holds (valid through year-end 2018) that contributes ~8% of the company's revenues.

 WFC -1.5% as the FED punishment headwind continues to hurt, although some analysts say there would be no "material damage to profit". I think it is a buying opportunity.

Earnings AH

Disney (DIS +1.4%) Q1 EPS of $1.89 beats by $0.28. Revenue of $15.35B (+3.9% Y/Y) misses by $100M. Revenue by segment: Media Networks, $6.24B (flat); Parks and resorts, $5.15B (+13%); Studio Entertainment, $2.5B (-1%); Consumer Products & Interactive Media, $1.45B (-2%). Operating income by segment: Media Networks, $1.19B (-12%); Parks and Resorts, $1.35B (+21%); Studio Entertainment, $829M (-2%); Consumer Products & Interactive Media, $617M (-4%). Shares +2% in AH.

Gilead Sciences (GILD +2.6%): Q4 EPS of $1.78 beats by $0.11. Revenue of $5.9B (-19.4% Y/Y) beats by $160M. Key product sales (M$): Genvoya: 1,060 (+88.3%); Truvada: 797 (-8.2%); Harvoni: 644 (-60.7%); Epclusa: 565 (-46.1%); Atripla: 440 (-27.5%); Descovy: 365 (+145.0%); Odefsey: 325 (+109.7%). 2018 guidance: Total sales $20-21B. GILD declares $0.57/share quarterly dividend, 9.6% increase from prior $0.52. Forward yield 2.84%. Payable March 29; ex-div March 15. Shares -0.7% in AH. 

Snap (SNAP +1.5%): Q4 EPS of -$0.13 beats by $0.03. Revenue of $285.69M (+72.4% Y/Y) beats by $32.74M. User growth also topped expectations, with daily active users +5% from Q3, adding 8.9M users to reach 187M; +18% Y/Y. Cash, equivalents and marketable securities came to $2.04B by year-end; free cash flow for Q4 was -$197.3M vs. a prior-year -$188.1M. Shares +20% in AH.

Chipotle Mexican Grill (CMG +1.3%): Q4 EPS of $1.34 beats by $0.02. Revenue of $1.11B (+7.8% Y/Y) in-line. Shares -2.7% in AH.

Beazer Homes (BZH +1%): Q1 EPS of -$4.08 may not be comparable to consensus of -$0.08. Revenue of $372.5M (+9.8% Y/Y) beats by $7.61M. Shares -3% in AH.

Akamai (AKAM +1.4%): Q4 EPS of $0.69 beats by $0.06. Revenue of $663.45M (+7.7% Y/Y) beats by $14.4M. Shares +7.6% in AH.

NETGEAR (NTGR +2%): Q4 EPS of $0.71 beats by $0.07. Revenue of $397.06M (+7.9% Y/Y) beats by $3.64M. Shares +5% in AH.

My Trades Today


  • Initiate position in WFC @ $56.4

Earnings Tomorrow


  • pre-market: HUM, KORS
  • post-market: NTES, PRU, TSLA, YELP, YUMC, ZNGA

Comments

  1. UnknownFebruary 6, 2018 at 3:54 PM

    Kostin 的market view 一向不准。GS commodity team是出名的反指，基本上都不对。increasing index volatility, extended valuation, small investor anxiety 等等这些难道不是8年牛市末期的征兆？大盘还谈不上稳定，今天道指有1000点左右的震荡。

    ReplyDelete
    Replies
    1. UnknownFebruary 6, 2018 at 4:22 PM

      我觉得目前还没有牛市结束的迹象，15年也这么调整了两次，再之前12年也有大的回调。当下唯一不利的消息是通货膨胀开始了。不过这几天原油又下去了，通货膨胀压力稍缓

      Delete
    2. UnknownFebruary 7, 2018 at 8:47 AM

      原油只是通货膨胀中的一小部分。原材料价格，劳动成本，零售价格上涨，还有一些行业劳力稀缺（比如建筑，运输）都要反应到FED的通胀预期和利率控制上。个人觉得原油是range bound，一方面OPEC还在控制产能，另一方面俄罗斯偷偷增产，SHALE在现在的原油价格下蠢蠢欲动，慢慢增产，还有税改后美元有上扬的压力，原油短期快速大涨机会不大，我觉得反而有向下的压力。

      Delete
    3. UnknownFebruary 7, 2018 at 8:49 AM

      不是说8年牛市马上结束，但是好像是在LAST INNINGS。潜在风险比潜在回报大。

      Delete
    4. UnknownFebruary 7, 2018 at 9:21 AM

      同意对原油的观点，我觉得今年油价应该就在$60-70这个区间内了，中国的产能控制对油价影响很大。你说得对，上周五就业报告出来引起大跌，就是因为预期劳动成本上升，通货膨胀压力加大。同时利率上升，美元贬值，市场害怕通胀爆发失控。牛市估计这两年内就到头了，不过上半年应该还不用担心

      Delete
    5. UnknownFebruary 7, 2018 at 10:04 AM

      你说这两天rebound的时候中概为什么这么差BABA, JD之类的都不行。是和中国有关，还是和狗狗脸书之类的疲软有关。BABA 是crowded long，表现不好有卖盘压力可以理解，蚂蚁金服的事spook了好多人也明白，但是JD不一样。什么EDU之类跟着一起跌。

      Delete
    6. UnknownFebruary 7, 2018 at 6:18 PM

      中概多数都有庄家在操纵，所以股价很难预测，经常在没有新闻的情况下上下翻腾，很容易就站岗了。不过账目好的股，站岗也无所谓，捂上一阵子就出水了

      Delete

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