Market 2018-03-08 (CI, KR, and more)

Market holds in green today despite Trump announced tariffs on steel and aluminum, with temporary exemptions for Canada and Mexico and leaving door open for other counties. This water-down plan is exactly what Wall Street expected.

Crude -1.42% to $60.28. Gold -0.38% to $1,322.60. UUP +0.64%, TLT +0.57%.

Story-line

  • 3 Weeks ago: Wilbur Ross proposed the tariffs, 24% on steel and 10% on aluminum.
  • 1 Week ago: Trump announced he would force the tariffs, 25% and 10%. "24%" might be too difficult for him to remember.
  • 2 Days ago: Gary Cohn decided to quit.
  • 1 Day ago: Republicans spoke loudly against a wide range tariffs, suggesting to narrow down on "China" only. 107 House Republicans send letter to Trump on this concern.
Other News
China reported the trade surplus of $33.7B amid a staggering rise in export by 44.5%, while imports recorded 6.3% growth in February, a month affected by the Lunar New Year holiday shutdown.

Cigna (CI -11.5%) buy ESRX (+8.6%) for $57B, including $15B debt, $48.75/share cash offer and 0.2434 share.

IBM has at least 63 blockchain clients with more than 400 projects. The company also projects Revenue up in the low single-digits, EPS up in the high single-digits, and pre-tax income in the mid single-digits. Dividends expected to increase annually; the share count -2% annually amid $16B buyback plan.

GNC Holdings (GNC -2.6%) announces plans to expand its business in India. Shares +3.2% in AH.

Winners

ESRX +8.6%, as discussed above.

WDC +2.1% approaching $100. STX +4.6%, MU +2.3%...

Losers

KR -12.4% despite in-line EPS and rev beat, also in-line guidance FY19 identical-store sales growth of +1.5~2.0% and EPS of $1.95~2.15 vs. $2.10 consensus. Today's selloff is episode 2 following yesterday. Also on news: the board at Boxed Wholesale voted to turn down a $400M acquisition offer from Kroger The free-fall could be a buying opportunity.

COST -0.9% after reporting solid ER: comparable sales +8.4%, rev +10.9%, EPS +22%, E-commerce +28.5%. COST could have another boost later this year as they will open 1st store in Mainland China (Shanghai Pudong) (12 stores in Taiwan already)

YY (-5%) was more than 7% premarket after word that its Huya game live-streaming unit has definitive deals for equity financing from Tencent. A series B round wrapping today has raised about $461.6M. YY maintains control over Huya in the transaction, and Tencent gets a right (exercisable between the second and third anniversary of closing) to buy additional shares to reach 50.1% of voting power in Huya. However, shared were traded lower during the day for unknown reasons, the same pattern after ER. MOMO -3.5%.

American Eagle Outfitters (AEO -9.4%) despite ER beats: Q4 EPS of $0.44 in-line. Revenue of $1.23B (+11.8% Y/Y) beats by $20M.

Steel stocks lower today. X -2.9%, NUE -2.7%, CENX -7.5%...

Snap (SNAP -2.1%) is laying off "just over 120" workers, ~ 10% of the engineering department.

Earnings in AH

United Natural Foods (UNFI): Q2 EPS of $0.71 beats by $0.16. Revenue of $2.53B (+10.5% Y/Y) beats by $80M. UNFI is long-term partner with Whole Foods (Amazon). They may have reached long-term contract recently. Shares +9.6% in AH.

Marvell Technology Group (MRVL +2.7%): Q4 EPS of $0.32 beats by $0.01. Revenue of $615.4M (+8.7% Y/Y) beats by $4.41M. Shares -1.1% AH.

El Pollo Loco (LOCO -0.5%): Q4 EPS of $0.11 beats by $0.01. Revenue of $95.2M (+2.9% Y/Y) in-line. Shares +7.3% AH.

My Trades Today

  • Added more BGS
  • Sold 1/3 of CPTA

Earnings Tomorrow

  • pre-market:  AMWD, BIG

Comments

  1. UnknownMarch 8, 2018 at 2:55 PM

    Toys "R" Us is planning to liquidate its U.S. stores after the company is unable to find a buyer or reach a restructuring deal with creditors. MAT and HAS both down in AH

    ReplyDelete

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