Beat the Market

Market is nervous on the US-China Trade Talk, which has not show clear picture yet. Indices finished in red, semiconductor sector is sold off after AMAT ERs. 30-year +0.56%. 10-yr +0.32%. 5-yr +0.18%. TLT +0.86%. Crude -0.25% to $71.31. Gold +0.17% to $1,291.60. UUP +0.2%. Winners DE +5.8% on pledge to raise equipment prices to fight rising costs, despite the companies missed both top and bottom lines. XLI +0.6%: CAT +1.3%, BA +2.1%... MOMO +3.7%, however, rival YY -1% as HUYA dropped another 4.8%. PYPL +2% on $2.2B iZettle acquisition. Losers AMAT -8.3% after disappointing guidance, SOXX -1.4%: LRCX -3.8%, KLAC -3.4%, STX -4.6%, WDC -2.1%... CPB -12.4% after reporting mixed ER, and CEO exit. FY2018 Guidance: Net sales: +10% to +11%; Adjusted EBIT: -8% to -6%; Adjusted EPS: $2.85 to $2.90 (-6% to -5%). Staples stocks has been under pressure this year as rate rises. JWN -10.9% after off-price sales disappoint. M manages to stay green. BIDU -9.5% as COO ...

As the negotiation kicks off, Trump says I 'doubt' China trade negotiations will succeed. Market is not happy, although indices recover from session lows. Treasury down again: 30-year -0.4%. 10-yr -0.03%. TLT -0.5%. Crude +0.14% to $71.59. Gold -0.09% to $1,290.30. UUP +0.12%. Mortgage rates surge to seven-year high in Freddie Mac survey. The 30-year fixed averaged 4.61% for the week, reaching its highest level since May, 2011, while the 15-year fixed averaged 4.08%. A year ago at this time, the 30-year and the 15-year fixed rates averaged a respective 4.02% and 3.27%. This is good news for banks, bad news for home builders. Winners Baozun +18.8% on Q1 beats, 16% Y/Y revenue growth. YY +3.5% received new Buy rating from Hua Tai with $126.5 PT. MOMO +2.7% . However, HUYA -11.1%. VLO +4.7% on Morgan Stanley upgrade ($140 PT). MPC +5.2%, PSX +3.6%... Losers WMT -1.9% despite ER beats and 33% growth in E-commerce. NTES -7.5% on mixed ER. Jefferies ha...

Bulls win today despite rising rates , as strong earnings from Tencent and Macy's boost investors confidence. 30-year -0.24%. 10-yr -0.15%. 5-yr -0.08%. TLT -0.38%. Crude +0.27% to $71.50. Gold -0.03% to $1,289.90. UUP +0.24%. Winners Macy's M +10.8% : Q1 EPS of $0.42 beats by $0.07. Revenue of $5.54B (+3.6% Y/Y) beats by $150M. Owned plus licensed comparable sales increased 4.2% during the quarter and owned basis comparable sales were up 3.9% to sail past analyst expectations. Operating income improved to 4.3% of sales from 4.1% a year ago. Macy's expects sales growth of -1.0% to +0.5% and lifts full-year EPS guidance to $3.75 to $3.95 for FY18 vs. $3.60 consensus, meaning forward PE will be only 8.6. Other retailers are also up: XRT +1.6% (retail ETF), UAA 8.7%, UA +6.9%, KSS +1.9%, JWN +2.4%, TGT +2.9%, COST +1.7% (very close to $200 now), WMT +1.9%, NKE +2.7%, LB +2.6%, GPS +1.3%... DIS +2% . As I said after earnings, the selloff after that was ridiculo...

Indices drop as rates raise again. 10-year treasury yield jumps to 3.074%. TLT -1.13%. Crude +0.27% to $71.15. Gold -2.02% to $1,291.60, drops to lowest in 2018, as US dollar holds strength, UUP +0.6%. Winner Retail sales were up 4.7% in April Y/Y. Categories with strong growth included clothing/clothing accessories (+4.1% Y/Y) and furniture/home furnishing stores (+6.1% Y/Y). KSS +3.3%, BBBY +2.5%, GPS +2.6%, UAA +2.4%, NKE +1%, DKS +1%... Macy's ( M +1%) trades higher ahead of tomorrow's Q1 ER. Analysts expect the retailer to disclose revenue of $5.43B and EPS of $0.37. Full-year guidance from management will be a crucial test to see if new initiatives are starting to pay off. Consensus estimates are for Macy's to guide for revenue of $24.79B and EPS of $3.59. WDC +2.3%, MU +1.9% both continue to bounce back. Stifel raises its MU PT from $95 to $101. SQM +2.1% , Chinese lithium company Tianqi near deal to buy stake in Chile's SQM. ALB +1.6%. MAT +...

Market has a peaceful day, in contradiction to the bloody mess in Israel, or terrorist attack in France. Bonds yields inch higher : 30-year -0.11%. 10-yr -0.02%. 5-yr -0.02%. TLT -0.5%. Crude -1.18% to $70.52. Gold -0.31% to $1,318.20. UUP +0.12%. Winners: SYMC +9.6% bounces back after the free-fall last week amid Audit investigation. Retailers are recovering, TGT +3.8% as buying action picks up in the week ahead of the retailer's earnings report scheduled for May 23; Baird has an Outperform rating on Target and a price target of $85. GPS +4.1%, LB +2.8% ... WDC +2.9% on JPMorgan initiation with an Overweight rating (BUY), . MU +2.3%.  BABA +2.2% , it touched $200 today. YY +3% continued to bounce back. QD +6.3% also jumped. Biotech continues last Friday's rally, IBB +1%.  Also CVS +3.7%. Losers Xerox ( XRX -4.3% ) says it has reached a settlement agreement with investors Carl Icahn and Darwin Deason and will end its merger deal with Fujifilm...

Market is mixed today, not bad to end the week-long rally. Treasury yields have little change, TLT +0.25%. Crude -1.14% to $70.55. Gold -0.23% to $1,319.30, UUP -0.15% Key points from President Trump's speech detailing his plan to lower U.S. drug prices called American Patients First (lame name though): Bans pharmacist gag rule against advising patients on pricing. FDA will accelerate approval process for generics and biosimilars. Will "fix" price disparity between U.S. and foreign markets (specifics not provided). Most of the tough talk was directed at the middlemen who negotiate drug costs for insurance companies. Not including: call for Medicare to negotiate lower prescription drug prices. XBI +3%, IBB +2.7%, XLV +1.5%, CVS +3.2%, ESRX +2.6%... Winners As discussed above, a lot of healthcare sector winners: REGN +6.3%, VRTX +3.3%, ALGN +3.2%, BIIB +3.1% ... VZ +3% as JPMorgan boosts to Overweight on 5G. T +1.3%, CMCSA +1.1%. FB +0.8% conti...

Another day of broad rally, not only in stock market, but also bonds and commodities. Treasury: 30-year +0.44%. 10-yr +0.14%. 5-yr +0.04%. TLT +0.8%. Crude +0.35% to $71.39. Gold +0.6% to $1,320.90. Winners IQ +11.3% . GS initiated 2 days ago at Buy rating and $23 PT. It finished @ $20.72 today. BIDU +2.8%. UBNT +11% , after reporting Q3 EPS of $0.98 beats by $0.05. Revenue of $250.4M (+14.7% Y/Y) beats by $2.48M. New $200M buyback. CTL +7.5% after reporting Q1 EPS of $0.25 beats by $0.07. Revenue of $5.95B (+41.3% Y/Y) misses by $50M. Petrobras PBR +7.1% upgraded by BAML to Buy. NVDA +1.7% rised to all-time-high ahead of ERs. MU +3.2%, SOXX +1.8%. FB +1.6% carries its momentum after ER; AAPL +1.4% new All-time-high, GOOG +1.4% ... Losers LB -7.2% on updating Q1 earnings guidance to lower end. Other retailers are also affected: M -2.4%, KSS -1.4%, JWN -1.4%, GPS -1.4%... BKNG -4.7% despite ER beats. ALB -3.3% despite ER beats. Earnings in AH Nvidia...

Energy ( XLE +2% ) led stock market for another rally day, utilities extend yesterday's big drop XLU -0.7% . JPMorgan Chase CEO Jamie Dimon said that people should prepare for benchmark Treasury yields to rise to 4% . Treasury yields move higher: 30-year -0.46%. 10-yr -0.18%. 5-yr -0.09%. TLT -0.6%. Crude +3.04% to $71.16. Gold -0.13% to $1,312.00. Some traders are predicting $80~$85 crude price now. Who will benefit from high oil price? Shale players, Russian, Canada, Saudi Arabia.... Who will lose? Industrials (high energy/material cost), airlines (transportation), and us as consumers. Be careful that the inflation may be out of control if US starts War against Iran.  Winners MU +5% after analyst cites "exceptional" cloud computing business. NVDA +2.1% ahead of ER tomorrow. TRIP +22.8% after ER. LC +20.6% after ER, short-squeeze. EA +5.8% after reporting Q4 EPS of $1.95. TTWO +4.2%, ATVI +2.4%. QCOM +0.6% , adds another 2.2% in AH as the board a...

Pres. Trump confirms the U.S. will exit the Iranian nuclear deal. The U.S. will "institute the highest level of economic sanctions." Treasury: 30-year -0.17%. 10-yr -0.17%. 5-yr -0.09%. TLT -0.1%. Crude -1.5% to $69.67 . Gold +0.05% to $1,314.80. UUP +0.36%. Winners U.S. defense stocks rise on Iran deal exit, ITA +1.5% . N OC +3.8%, RTN +2.5%, LMT +2%, LLL +2.1%,  TXT +1.6%, GD +1.6%... BIDU +3.6% . Goldman Sachs reinstates Buy rating with $319 PT. OnDeck ONDK +9.2% after Q1 beats, FY view raised. Big banks fight back. Activist hedge fund ValueAct Capital Partners has invested $1.2B in Citigroup over the last few months: C +3.7%, MS +1.9%, JPM +1.5%, WFC +1%, BAC +1%. MLM +4.3% despite ER misses. Losers DISH -12.1% . Dish Network takes revenue hit as traditional subs drop. CMCSA -5.6% : Comcast is preparing to challenge Disney's $52.4B deal to acquire most of FOX's film and TV assets, Reuters reports. JD -4.6% as Q1 profits miss amid higher...

Tech continues to soar, Retailers suffer. The WSJ reports that China is near finalizing a $47.4B investment fund to finance semiconductor research and startup development. The move comes as China wants to increase its tech independence during a period of heightened relations with the US. A similar fund was launched in 2014 and raised $21.8B. SOXX +1%. Treasury yields have little change. TLT -0.16%. Crude +0.13% to $69.81. Gold +0.02% to $1,314.90. UUP +0.21%. WTI June crude oil jumped above $70/bbl intraday for the  first time since November 2014. Trump tweeted that he would announce his decision on Iran sanctions at 2 pm tomorrow from the White House; oil prices have run higher in recent days, partly on the belief that Trump will take a hard line on the deal. Winners Nvidia +4% as Bank of America Merrill Lynch reiterates its Buy rating with $300 PT. ER will be on Thursday. ILMN +4.9% reaches all-time high again. BABA +3.4% , will retest $200 soon. YY +7.4%,...

Unemployment rate drops to 3.9%; Salary +2.6% below expected , which ignites the stock market into rally mode today. The million dollar question is: how long will this rally last? As the trade war threat looms, I think it won't be long. Today's strong showing was not enough to offset weekly losses for the Dow and S&P, as each fell 0.2%, while the Nasdaq recorded a 1.2% gain for the week. TLT +0.15%, USO +1.95%, GLD +0.21%, UUP +0.12%. All Dow Jones companies post gain today except CVX (-0.4%) , led by AAPL (+3.9%). Buffett bought another 75M shares of AAPL in Q1, got completely out of IBM. This explained the performance of both AAPL and IBM in 2018. So what now? AAPL jumped 3.9% to all-time-high today. It is also actually good news for IBM, as the selling pressure becomes lower now. Winners AAPL and its suppliers. For instance, OLED reversed the big drop yesterday AH, finished +12.4% ; SWKS +4.3% despite downside guidance. BABA +3.5% after solid ER....

Stocks recover most of earilier selloff, as supported by 200-MA. It has been recent trend that stocks fail to rally after strong ERs, which indicates a few things:     1. A lot has been priced in;     2. Not much fresh cash to support rally --- investors are much more cautious now;     3. The outlook of economy is not clear, as trade-war looms. US-China negotiation kicked off in Beijing today. Market is watching the process very closely. Winners BA +2% lifts Dow Jones. CHD +3.6% on ER beats. PG +0.6%, CL +0.3%. VMC +7.5% after ER beats: Q1 EPS of $0.44 beats by $0.21. Revenue of $854.47M (+8.5% Y/Y) beats by $38.72M. MRO +6.2% as earnings, revenues, production all beat estimates YUM +3.1% bounces back from yesterday selloff. Baird upgrades YUM to an Outperform with $94 PT. NVDA +3% , Barclays upgrades Nvidia to Overweight with $280 PT . SOXX +0.6%. Losers TSLA -5.5% after another quarter of B$ loss. It is unusual that Elo...

Fed leaves rates unchanged, says inflation close to target. Not much new. Officials may have signaled their willingness to allow inflation to exceed their 2% goal somewhat by adding a reference to the “symmetric” nature of their target. The FOMC also noted the weakness in growth in the first quarter , removing a reference in the in March statement that the economic outlook had “strengthened in recent months.” Market was initially up before the late-hour selloff. Treasury yields have little change : 30-year -0.2%. 10-yr +0.03%. 5-yr +0.05%. Crude +0.7% to $67.72 . Gold -0.11% to $1,305.40. IDC: Smartphone shipments -2.9% in Q1 , due largely to a slowdown in China. Top vendors by shipment (market share / Y/Y change): Samsung, 78.2M (23.4% / -2.4%); Apple, 52.2M (15.6%/+2.8%); Huawei, 39.3M (11.8%/+13.8%); Xiaomi, 28M (8.4%/+87.8%); OPPO, 23.9M (7.1%/-7.5%); Others, 112.7M (33.7%/-18.5%).  Winners AAPL +4.4% after ER beats and dividend/buyback plans. Morgan Stanley’s Ka...

It has been quite busy lately. I am writing a short version today. Market is supported by Tech today. Nasdaq has a good start in May, led by Apple (AAPL +2.3%), Intel (INTC +3.3%) and Microsoft (MSFT +2%). Treasury yields rise again, which is behind the selloff this morning. Crude -1.69% to $67.41. Gold -1.01% to $1,305.90 . UUP +0.66%. PFE -3.3% as breast cancer drug disappoints. GRUB -8.4%  despite solid Q1 beats. Share price has been doubled in the past year. Shopify -4.7% despite ER beats. STX -6.4% on Tariff concerns, despite ER beats. Apple reported ER beats in AH, shares +3.8%. The recent ER rally is mainly due to the dividend hike and massive buyback plan ($100B). It will be interesting to see what is the plan to grow revenue in future. GILD reported ER losses, shares -5.5%. I believe this might be the turning point, as there is not much room for HCV drugs to fall. The company stands by their guidance published in Feb. SNAP -16% in AH as reve...