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Earnings Infinity War: It's Strong Earnings vs Growth Concerns in an epic battle for investors' attention as US futures remain mixed

Apr 25, 2019

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Market data as of 7am EST

 

US Stocks Preview Ahead of the Open

  • Strong earnings results are battling growth outlook concern in an epic battle for investors' attention, in early trading with front-month Dow Jones minis -0.38%, S&P 500 minis +0.02% and Nasdaq 100 minis +0.24%
  • US Stocks continue to grind higher with US stocks outperforming their international peers by nearly 5% for the year.  This divergence will continue for the next few months as earnings expectations in the US are revised upwards.  Remember, it isn’t FOMO driving US stocks, it is earnings and feels like this rally has more to run.  Please see our video from yesterday to get our take why US stocks aren’t expensive and can continue to run. 
  • A report from the International Shopping Centers Associations shows Gen Z shoppers embrace shopping centers, having visited one at least once over a 3-month period, much more than other demographic groups
  • The United States will announce initial jobless claims data for the week ending April 20th, 2019 at 8:30 AM today. Economists expect initial jobless claims of 200,000 compared to 192,000 in the prior period.  
  • The United States will also announce preliminary Durable Goods Orders for March at 8:30 AM today. Economists expect the United States to report an increase of 0.80% compared to a decline of 1.60% in February.  
  • Oil is rising again this morning with Brent crude back above $75 again as the US tightens the screws on Iran oil exports
  • Is it FOMO Fever: Is FOMO Really Driving the Current Rally in the S&P 500 or is it Earnings?
  • Check out our newest Stock Model Portfolio: LET'S GET HIGH-High PERFORMANCE, of course!-with our new MARIJUANA POT-FOLIO Stock Model Portfolio!
  • Welcome to Silicon Valley: Golden State to Tax Golden Goose? "IPO Tax" to Address Income Inequality and Affordable Housing Shortfall floated in San Francisco
  • The VIX is little changed this morning and is currently at 13.21 after closing at 13.14 yesterday
  • Invesco DB US Dollar Index Bullish Fund (UUP) June 21 OTM Puts, iShares China Large-Cap ETF (FXI) May 17 Calls and SPDR S&P 500 ETF Trust (SPY) 26 April OTM
  • US 10-Year Treasury Bonds are lower with yields up 0.72 basis points to 2.5253%
  • The US Treasury 2s-10s Spread has widened 1.31 basis points to 0.21%
  • WTI Crude is currently down -0.84% to USD$65.84/bbl with the Brent-WTI spread up USD$1.86 to USD$8.78/bbl
  • Gold is currently little changed 0.08% to USD$1276.83/oz

Stocks Trending in the News

 

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Global Consumer Stocks Trending in the News

  • DR Horton (DHI) reported fiscal second quarter results that beat expectations.  DR Horton posted fiscal second quarter EPS of 93 cents, beating consensus of 86 cents.  Second quarter revenue of $4.13 billion beat $4.05 billion consensus.  Net orders grew 6% in the quarter.  DR Horton gave 2019 revenue guidance of $16.7 billion to $17 billion, below present consensus of $17.16 billion.  DR Horton is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Tesla (TSLA) reported a huge loss for the first quarter, much more than expected.  Tesla lost $494 million in the quarter, or $2.90 per share.  Consensus was for a $1.30 per share loss.  Tesla is planning to raise up to $2.5 billion in new equity this year.  For comparison, Tesla recorded only $2.2 billion in cash on its balance sheet at the end of the quarter.  Tesla reiterated its plans to deliver 360,000 to 400,000 cars in 2019.  Tesla said it will shoot to be cash flow “neutral” this year whereas past guidance was to be earing profits past this quarter.  Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology Stocks Trending in the News

  • Facebook (FB) reported first quarter revenue that beat consensus.  Facebook posted first quarter EPS of $0.85, ex-legal expenses it would have been $1.89.  Facebook first quarter revenue of $15.08 billion beat consensus of $14.97 billion.   Facebook reported a $3 billion expense charge in the quarter related to FTC legal issues.  Facebook reported 1.56 billion daily active users in the quarter.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Lam Research (LRCX) reported fiscal third quarter EPS of $3.70 which consensus of $3.38.  Lam Research fiscal third quarter revenue of $2.44 billion consensus of $2.40 billion.   Lam Research  gave fourth quarter EPS guidance of $3.20 to $3.60.  Lam Research is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Microsoft (MSFT) reported fiscal third quarter EPS of $1.14 which beat consensus of $1.00.  Microsoft fiscal third quarter revenue of $30.57 billion beat consensus of $29.86 billion.  Cloud revenue of $9.65 billion beat $9.3 billion, growing 41% y/y.  Microsoft is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • PayPal (PYPL) reported first quarter adjusted EPS of $0.78 which beat consensus of $0.68.  PayPal first quarter revenue of $4.13 billion matched consensus.   PayPal gave second quarter EPS guidance of $$0.68 yo $0.78.  PayPal said 40 million users used its Venmo service at least once a month.  PayPal is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Visa (V) reported fiscal second quarter EPS of $1.31 which consensus of $1.24.  Visa fiscal second quarter revenue of $5.5 billion came in line with consensus of $5.47 billion.   Visa posted payments growth of 8% in the quarter.  Visa is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.

Global Industrial Stocks Trending in the News

  • 3M (MMM) reported first quarter earnings that trailed expectations.  3M reported first quarter adjusted EPS of $2.23, behind the $2.48 expected.  Revenue in the first quarter of $7.86 billion trailed the $8.02 consensus.  3M is realigning its business units from 5 to 4 and will eliminate 2,000 jobs worldwide, taking a $150 million charge.  3M cuts its 2019 EPS guidance to $9.25 to $9.75, a huge cut from $10.45 to $10.90.  3M is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • UPS (UPS) reported first quarter earnings that missed consensus as it suffered weather challenges in the quarter.  UPS reported first quarter EPS of $1.39, trailing $1.42 consensus.  UPS said poor weather cost it 7 cents per share in earnings.  First quarter revenue of $17.3 billion while consensus was for $17.78 billion.  UPS saw improvements in margin overseas and said this quarter should be the low point in earnings for the year.  UPS gave 2019 EPS guidance of $7.45 to $7.75.  UPS is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Deutsche Bank (DB:DBK) and Commerzbank (DB:CBK) have formally ended their merger talks.  Five weeks of talks could not yield a deal.  A host of economic and political concerns limited Deutsche Bank and Commerzbank from creating the national powerhouse the German Finance Ministry was pushing for.  Deutsche now must come up with its fifth turnaround plan since 2015 in the wake of the failed merger attempt.   In the end, the 2 banks simply agreed a merger would be too difficult.  Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  Commerzbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.

Global Power & Commodity Stocks Trending in the News

  • Hess Corp (HES) reported a surprise first quarter profit.  Hess posted a 9 cents per share profit while consensus was for a 27 cents per share loss.  Hess delivered greater than expected oil production in the Gulf of Mexico and the Bakken shale region. Hess Corporation is rated “Top Short” in our US Large-Cap Global Top Stock Ideas
  • Newmont Gold Corp (NEM) delivered first quarter earnings that beat expectations.  Goldcorp first quarter EPS of 33 cents came ahead of 27 cents consensus.  Revenue of $1.8 billion trailed $1.87 billion consensus.  Newmont reported 1.23 million ounces of production.  Newmont Gold Corp is rated “Attractive” in our US Large-Cap Global Top Stock Ideas

Global Healthcare Stocks Trending in the News

  • AbbVie (ABBV) posted first quarter adjusted EPS and revenue that beat consensus.  AbbVie reported first quarter EPS of $2.14, ahead of $2.06.  Revenue of $7.83 billion beat $7.78 billion consensus.  Despite increased competition for its best-selling drug Humira, AbbVie hiked EPS guidance to $8.73 to $8.83 fro 2019, up from $8.65 to $8.75; consensus is $8.69.  AbbVie’s psoriasis drug Skyrizi received FDA approval April 23rd.  AbbVie is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
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International Stock Markets Recap

  • The Euro Stoxx 600 is currently down -0.17%, the FTSE 100 is down -0.36%, the DAX is down -0.18%, and the CAC 40 is down -0.25%
  • Technology (-0.79%), Real Estate (-0.62%), and Construction & Materials (-0.72%) stocks are the top performers in the Euro Stoxx 600 today
  • Telecommunications (-0.5%), Oil & Gas (-0.11%), and Utilities (+0.66%) stocks are the worst performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.72x
  • 142 stocks in the Euro Stoxx 600 are at 4-week highs while 43 stocks are at 4-week lows
  • 116 stocks in the Euro Stoxx 600 are overbought while 6 stocks are oversold according to the 16-day RSI Measure
  • The Nikkei 225 finished up +0.48%, the Hang Seng ended down -0.86%, the Hang Seng China Enterprise declined -1.39%, and the CSI 300 was -2.19%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 3.17x
  • 25 stocks in the Nikkei 225 hit 4-week highs while 22 stocks reached 4-week lows
  • 8 stocks in the Nikkei 225 closed overbought while 8 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished negative with the advance/decline ratio for the Hang Seng closing at 0.39x
  • 5 stocks in the Hang Seng hit 4-week highs while 7 stocks reached 4-week lows
  • 1 stock in the Hang Seng closed overbought while 2 stocks closed oversold according to the 16-day RSI Measure

 

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

 

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