Market 2018-02-16 (Steel/Aluminum, Trade-War, and more)

Dow Jones and S&P 500 finished green for their 6-day winning strike. Nasdaq (QQQ -0.4%) is running out of gas today. Russel 2000 (IWM +0.4%) finally outperforms the three indices.

JNJ (+1.5%), PFE (+1.5%) and UNH (+1.5%) lead Dow 30 today. CAT (-2.3%) and MCD (-1.9%) are the worst.

Crude +0.57% to $61.69. Gold -0.3% to $1,351.20. Dollar bounces back (UUP 0.7%) after hitting 3-year low yesterday.

Winners

Steel (SLX +2.7%) and aluminum (JJU +3.8%) shares are rallying as the U.S. Department of Commerce recommends tariffs: X +14.8%, AKS +13.6%, MT +3.3%, NUE +4.6%, CLF +7.4%; CENX +8.4%.

  • The DoC recommends a 7.7% tariff on all aluminum exports, with higher duties of 23.6% on products from China, Russian, Venezuela and Vietnam.
  • The Department also recommends global steel duties of 24% on all imports, with a ~53% tariff on steel imports from Brazil, China, India, Russia and several other countries.
  • Trump needs to decide on the proposal by April.
  • Who will be hurt in the trade-war? American agriculture, e.g., corn, bean, wheat, chicken ...

AbbVie (ABBV +3.3%) JAK1 inhibitor upadacitinib shows durable treatment effect in mid-stage Crohn's study. Yesterday the company announced a 35% increase in its quarterly dividend to $0.96. In addition, the board has authorized a new $10B stock repurchase program.

DE +1.6% after mixed ER, but good outlook. Company equipment sales are projected to increase by about 29% for fiscal 2018 and by 30%-40% for the second quarter compared with the same periods of 2017.

DIS +1.2% as "Black Panther" is a blockbuster hit in theaters.

Losers

Yamana Gold (AUY -9.6%) after reporting a large Q4 loss. GG -2.1%, NUGT -6.8%.

Campbell Soup (CPB -3.2%) reports organic net sales declined 2% in Q2, driven primarily by lower volumes. FY2018 Guidance: Net sales -1~+1%; Adjusted EBIT: -7~-5%; Adjusted EPS: $3.10~3.17 (+2~4%).

Kraft Heinz (KHC -2.6%) after disappointing ER. Share dipped to 52-wk low at early hours. KO & SJM are relatively better.

MAT -2.4%. Management sets medium-term objectives of  mid-to-high single digit revenue growth and an operating margin of 15% or higher.

My Trades Today


  • Bought TELL @ $9.96

Have a nice long weekend!

Comments

  1. UnknownFebruary 16, 2018 at 5:56 PM

    Wilbur Ross 靠restructure steel/coal companies 起家的，是死硬的贸易保护主义者。DoC recommend 惩罚性关税容易，实施起来很难，弄不好就要和中国贸易战。中国反击远不止一些基础行业，工业品化工品农产品农机之类的，更多的是汽车，高科技产品，电子产品，半导体，甚至航空业等等。这些行业对美国经济有关键影响，trump应该不傻。钢铁股今天一部分是short covering，一部分是speculative buying。不知道是不是put的好时机。

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