Market 2018-03-05 (Tariffs or Not? SQ, MU, and more)

Market swings wildly again, from bear mood to bull, as investors interpreted Trump's latest tweets "Steel tariffs would come off if ‘new & fair’ NAFTA deal struck", hinting possible compromise. Nevertheless, uncertainty is always bad for companies, which should be avoided.

Crude +2.19% to $62.59. Gold -0.25% to $1,320.10. Treasury yields and Dollar have little change.

Dow Jones is lead by CAT (+3.2%) and BA (+2.3%). The only red is NKE (-1.3%).

In S&P 500, Utilities Sector (XLU +2%) is surprisingly the best among all.

News

Weather: more than 60K people in New York's Westchester County and 65K people in New Jersey were still without power as of midday today. Another winter storm is forecast to hit later this week, and the National Weather Service warns of up to a foot of snow in some areas is possible beginning late Tuesday night.

Piper Jaffray releases a new survey asking why people who currently own Apple (AAPL) iPhones didn’t upgrade to the iPhone X.  The answers: 31%, “it’s too expensive”; 44%, “my iPhone works fine”; 8%, “I prefer a larger screen.” The three iPhone models rumored to release this year include a more cost-friendly version of the X and a larger, phablet version.

Nordstrom (JWN -2.1%): the board has received -- and rejected -- an indicative proposal from the Nordstrom family to acquire the company. $50 per share offer is below today's closing price $51.9.

More on Tariff (Height Capital Markets Report)

The firm published its report this morning, which was almost exactly what I said last week on Mitbbs.

  • "We expect that the White House is pushing to finalize tariffs on steel and aluminum imports by the end of this week, likely in order to use any tariffs to bolster support for Republican Rick Saccone, who is running for the US House of Representatives in a special election in a district outside of Pittsburgh on March 13."
  • "We expect that goal is aggressive given the lack of progress on reviewing the legal and procedural elements of any proposed tariff, so it is possible the administration will be unable to finalize tariffs within that timeframe."
  • "We expect that the administration will include carve-outs to the tariffs, almost certainly company-specific and likely some limited country-specific exemptions. We believe this aggressive trade action is primarily driven by President Trump's personal desire to appear tough. The fact that Trump's announcement received such significant pushback is likely only strengthening his commitment to act."

Winners

All the big steel/aluminum users, BA +2.3%, CAT +3.2%, GM +0.8%, F +1.7%...

MU +5.9% to all-time-high. BAML report: semiconductor sales were +23% Y/Y in Jan. WDC +1.9%, LRCX +2.1%, INTC +1.6%...

SQ +9.6% to all-time-high on no particular news.

 YY (+1.2%) reported in AH: Q4 EPS of $2.27 beats by $0.43. Revenue of $557.4M (+46.0% Y/Y) beats by $5.71M. Shares +2.5% now. 

Losers

JD -1.8% keeps sliding after ER.

GILD -1%, it is traded in a narrow range these days.

My Trades Today

  • Sold half position in BGS @ $30.3 (bought @ $28 last week).

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