Market 2018-02-20 (WMT, QCOM, and more)

As I said yesterday, market is trying to find direction this week. Nasdaq finishes nearly flat and Dow Jones loses 254 points (-1%), which is lagging today among indices amid Walmart (WMT -10.2%) reported slow online sales growth (23% vs 50% in previous quarter).

Best performers in Dow 30: INTC +1.7%, MSFT +0.8%, AXP +0.4%.

Tech is the only sector in green today, QQQ +0.2%.

Crude +0.13% to $61.63. Gold -1.77% to $1,332.20. UUP +0.6%.

News

An unidentified hacker or hackers broke into a Tesla-owned (TSLA -0.1%) Amazon (AMZN +1.4%) cloud account and used it to “mine” cryptocurrency, security researchers said. The breach also exposed proprietary data for the electric carmaker.

Alibaba (BABA +1.9%) buys a 15% stake in Chinese furniture chain Easyhome for $851M.

General Electric (GE -2.1%) is exploring a sale of its industrial gas engine business, worth up to $2B

Home Depot (HD -0.1%): Q4 EPS of $1.69 beats by $0.05. Revenue of $23.9B (+7.6% Y/Y) beats by $240M. Hike dividend by 16% to $1.03.

QCOM (-1.3%) says Broadcom offer "not even close". It also raised its bid for NXP Semiconductors from $110 to $127.5 per share.

Samsung slashes output of OLED panels in response to weak demand and iPhone X production cut.

KFC (YUM -0.2%) is forced to close hundreds stores in UK due to chicken shortage (logistic problem).

Winners

Noble Energy (NBL +11.1%) jumps after reporting ER beats and an upbeat outlook through 2020, expecting estimated cash flow from operations rising at a 35% compound annual growth rate at $50/bbl oil, and estimated volumes growing to 525K boe/day, a 20% compound annual growth rate from 2017.

YY (+1.4%) and MOMO (+4.2%) are traded higher amid bullish initiations at Citi. The firm's PT of $150 for YY, $41 for MOMO.

GOOG (+0.7%) as the company rolls out Google Pay, which includes Android Pay and Google Wallet.

Others: NVDA +2.1%, MU +1.6%, AMAT +3.2%, LRCX +2.9%, AMD +1.7%, SQ +1.9%...

Losers

A number of staples companies with a high degree of exposure to Walmart are lower: Pinnacle Foods (PF -3.7%), Clorox (CLX -2.2%), PG (-1.5%), Church & Dwight (CHD -2.8%), Hanesbrands (HBI -2.7%), B&G Foods (BGS -3%), Kraft Heinz (KHC -3%), Unilever (UL -2.2%).

The Walmart earnings report also has impacted the grocery and discounting sectors: Kroger (KR -4.2%), Smart & Final Stores (SFS -9.5%), Weis Markets (WMK -4.9%), Sprouts Farmers Market (SFM -3.8%), Target (TGT -3.8%), Dollar General (DG -3.2%), PriceSmart (PSMT -3.8%), Big Lots (BIG -2.8%) and COST (-1.8%).

Ubiquiti Networks (UBNT -25.3%) discloses that the SEC issued subpoenas to the company and some of the officers requesting documents and information. The subpoenas relate to a range of topics including “accounting practices, financial information, auditors, international trade practices, and relationships with distributors and various other third parties.”

Earnings in AH

Chicago Bridge & Iron (CBI -0.2%): Q4 EPS of $0.48 beats by $0.01. Revenue of $1.69B (-16.3% Y/Y) misses by $130M. Shares +0.4% in AH.

La-Z-Boy (LZB -0.7%): Q3 EPS of $0.51 beats by $0.05. Revenue of $413.64M (+6.1% Y/Y) beats by $10.91M. Share +2.1% in AH.

LendingClub (LC +4.6%): Q4 EPS of $0.01 misses by $0.01. Revenue of $156.5M (+19.9% Y/Y) misses by $1.54M. Q1 revenue expected to be $145M-$155M, shy of consensus $161M. Full-year 2018 revenue seen at $680M-$705M vs. estimates of $695.6M. Adjusted EBITDA seen at $75M-$90M vs. $44.6M in 2017. Share -8.7%.

Halozyme Therapeutics (HALO): Q4 EPS of $0.85 beats by $0.13. Revenue of $189.6M (+386.2% Y/Y) beats by $24.41M. Shares +2.6%.

Transocean (RIG): Q4 EPS of -$0.24 beats by $0.04. Revenue of $629M (-35.4% Y/Y) beats by $7.23M.

My Trades Today


  • Initiated position in WMT @ $94.4

Earnings Tomorrow


  • pre-market:   AAP, GRMN, LNG, SLCA, WWW
  • post-market:  AAOI, ANIK, CAKE, CAR, GPOR, JACK, NE, O, P, ROKU, SAM, TRN, WEN, WLL

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