Wednesday 7/17/19=DJIA -62 NASDAQ -12
It was a sloppy day in the market, but many Best Stocks Now had a very good day. My biggest pct winners were MDB, ABT, SHOP, and AYX. CSX was down 10% on a missed EPS report. It looks like an over reaction by the market to me. I sent out tweets on the following stocks: COUP, GME, NEE, SHOP, ULTA, and ZEN.
I did quite a bit of buying today, including a brand new stock in the Ultra Growth Portfolio. Gold and Silver stocks had a very good day. Several look very tempting. I featured Abbott Labs on my show today.
The market is still dealing with yesterday’s news.
- All three major U.S. stock averages slip into the red after President Trump says he could slap more tariffs on China, reminding investors that a resolution to the China-U.S. trade dispute is still a worry.
- The Dow falls 0.1%, the Nasdaq declines 0.5%, and the S&P 500 slips 0.4%.
- Crude oil, which had been flat at about noon ET, slides 3.6% to $57.44 per barrel.
- The 10-year Treasury yield rises 2 basis points to 2.115%; earlier it had been up 4 bps to 2.131%.
- Dollar Index rises 0.5% to 97.38.
Here was the mood of the market as we awaited a new trading day.
- Mixed bank earnings and comments from President Trump that the trade war has a "long way to go" put a halt to the five-day rally in U.S. shares on Tuesday, though fresh records are back in focus.
- Dow and S&P 500 futures are up 0.2%, while contracts ties to the Nasdaq are pointing to gains of 0.3% at the open.
- A wave of quarterly reports from Netflix and other top-tier, high-growth companies starting today could fuel more stock gains or put an end to the market's recent strength.
- FAANGs and Microsoft account for about 17% of the S&P 500's $26T market cap, making reaction to their quarterly results key to Wall Street sentiment.
A weak print on housing starts.
- Housing Starts: -0.9% to 1.253M vs. 1.260M expected, 1.269M prior (revised from 1.265M).
- Building permits 1.220M vs. 1.300M expected and 1.299M prior (revised from 1.299M).
Powell reiterates uncertainties.
- Uncertainties surrounding the Federal Reserve's U.S. economic outlook have increased, Fed Chair Jerome Powell said at a conference in Paris today. No surprise there.
- His prepared remarks repeat many of his standard talking points -- baseline outlook is still for solid growth in the U.S.; uncertainties, especially over trade developments and global growth, are rising; and the FOMC is carefully monitoring developments.
- Also repeats that the Fed "will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective."
Libra news hurting bitcoin.
- Bitcoin (BTC-USD), down 8.0%, sinks to $9,606.54 as Congressional hearings over Facebook's Libra project end.
- Earlier, the biggest crypto by market cap, touched $9,491.02, its lowest point since June 20.
- Other crytos follow: Ripple (XRP-USD) falls 7.3% and Ethereum (ETH-USD) tumbles 13%.
Here is why ROKU had such a big day on Monday…
- Roku (NASDAQ:ROKU) shares rose to a record high today alongside reports that Amazon's Prime Day was very good to the company's technology.
- Amazon.com indicated that Roku's streaming devices were among the sale's best sellers, as were television sets featuring Roku streaming tech.
- Shares closed up 7.3% today.
- Shares have been a run since a relative bottom in December; they're up 265% YTD, up 184% over the past six months, and up 97.8% in the past quarter.
Visa continues to grow.
- Visa (NYSE:V) will bring Payworks' cloud-based solution for in-store payment processing together with its CyberSource digital payment management platform, creating an integrated payment acceptance system for merchants and acquirers.
- The combined capability will enable Visa’s clients to offer a unified payment experience whether their customers pay in-store, in-app, or online.
- The acquisition follows a partnership and investment Visa made in Munich-based Payworks in February 2018.
- Terms of the deal weren't disclosed.
Huge prime day.
- Amazon (AMZN -0.2%) says members purchased over 175M items during this year's Prime Day event.
- The company says sales topped the previous Black Friday and Cyber Monday totals combined, but doesn't break out specific numbers.
- The two days of the event were the largest ever for new Prime memberships.
- Small and medium-sized businesses "far exceeded" $2B in sales.
Bad news for Amazon however.
- Taking action to appease regulators, Amazon (NASDAQ:AMZN) has reached a deal with Germany's antitrust authority to overhaul its terms of service for third-party merchants.
- While neighboring Austria ended a similar probe, the EU opened a formal investigation of Amazon's "dual role" as both a merchant and a marketplace.
- U.S. lawmakers separately grilled the retail giant on Tuesday over how the company treats merchants, with Amazon associate general counsel Nate Sutton denying the company uses individual data to directly compete with smaller sellers.
- Amazon's (NASDAQ:AMZN) associate general counsel Nate Sutton denies the company uses individual data to directly compete with smaller sellers on the platform during a hearing before U.S. senators.
- Sutton says the same algorithm applies to the sales of all products.
- Amazon's use of data to game the marketplace is also behind the coming EU probe that Bloomberg sources say could start this week.
Will they beat or will they miss?
- Netflix (NASDAQ:NFLX) is scheduled to announce Q2 earnings results on Wednesday, July 17th, after market close.
- The consensus EPS Estimate is $0.55 (-35.3% Y/Y) and the consensus Revenue Estimate is $4.93B (+26.1% Y/Y).
- Over the last 2 years, nflx has beaten EPS estimates 63% of the time and has beaten revenue estimates 63% of the time.
- IBM (NYSE:IBM) is scheduled to announce Q2 earnings results on Wednesday, July 17th, after market close.
- The consensus EPS Estimate is $3.08 (flat Y/Y) and the consensus Revenue Estimate is $19.18B (-4.1% Y/Y).
- Over the last 2 years, ibm has beaten EPS estimates 100% of the time and has beaten revenue estimates 63% of the time.
- Over the last 3 months, EPS estimates have seen 1 upward revision and 17 downward. Revenue estimates have seen 0 upward revisions and 15 downward.
A very nice report for Abbott labs (ABT)
- Abbott Laboratories (NYSE:ABT): Q2 Non-GAAP EPS of $0.82 beats by $0.02; GAAP EPS of $0.56 beats by $0.08.
- Revenue of $7.98B (+2.7% Y/Y) misses by $20M.
- Shares +0.65% PM.
Tech stock of the day!
- ASML Holding (NASDAQ:ASML): Q2 GAAP EPS of €1.13 beats by €0.18.
- Revenue of €2.57B (-6.2% Y/Y) in-line.
- ASML (NASDAQ:ASML) +5.4% reports in-line Q2 revenue and an EPS beat. The Q3 view has net sales of around €3-3.27B (consensus: €3.27B) with gross margin of 43-44%.
- Key Q2 metrics: New lithography systems sold, 41 (Q2: 43); Used lithography systems sold, 7 (Q1: 5); gross margin, 43% (Q1: 41.6%).
- Management forecast: "For the remainder of the year we see further weakness in Memory, while Logic looks stronger. We expect that the increased demand in Logic will compensate for the decreased demand in Memory. The additional growth in Logic is driven by accelerated investments in 7 nm nodes and beyond."
EPS report of the day.
- Cintas (NASDAQ:CTAS) rises 6.0% in after-hours trading after fiscal Q4 adjusted EPS of $2.07 beats the average analyst estimate of $1.93 and improved from $1.77 in the year-ago period.
- Revenue for the quarter ended May 31, 2019 increased 7.4% Y/Y to $1.79B, beating the consensus estimate of $1.78B.
- Issues FY2020 revenue guidance of $7.24B-$7.31B; consensus estimate of $7.28B.
- Sees FY2020 EPS from continuing operations of $8.30-$8.45; compares with consensus estimate of $8.32.
- Fiscal Q4 gross margin of 45.9% increased from 45.1% a year ago, with uniform rental and facility services operating segment gross margin improving 100 basis points from FYQ4 2018 to 46.0% and first aid and safety services operating segment gross margin improving 70 basis points to 47.7%.
EPS miss of the day.
- CSX (NASDAQ:CSX): Q2 GAAP EPS of $1.08 misses by $0.03.
- Revenue of $3.06B (-1.0% Y/Y) misses by $80M.
- Shares -4%.
- CSX (NASDAQ:CSX) -4.8% after-hours as Q2 earnings fell short of analyst consensus estimates and revenues slipped 1% as Merchandise growth was offset by Intermodal weakness.
- Q2 expenses fell 3% Y/Y to $1.76B, driven by continued efficiency gains and volume-related savings, and operating income rose 2% to $1.31B from $1.28B in the prior-year quarter.
- CSX lowers FY 2019 revenue guidance, seeing a 1%-2% decline equating to $12B-$12.13B vs. $12.47B analyst consensus estimate and the company's previous outlook for full-year revenue to grow by low single digits.
CSX also says its operating ratio set a company Q2 record of 57.4%, improved from