Bill Gunderson’s Daily Market Observations for Friday 8/30/19

Friday 8/30/19=DJIA -35  NASDAQ -42

Ulta Beauty gets clobbered.

Daily Wrap: Ulta Beauty was clobbered to the tune of -30% today. Makeup sales were very disappointing.  Workday also had a disappointing earnings report. It happens. I own them both. I will let the dust settle and see where we go from here with these two stocks. The volume in the market was very light today as we begin a three-day weekend. The rhetoric between us and China remained calm again today.

Trading: I did very little trading today. I bought one new position in my Emerging Growth Portfoliol. I was active on Stocktwits, Twitter, and Seeking Alpha today. The market was very dull, however.  I sent out tweets on the following stocks: CVNA and ARLP.

The futures were up good this morning.


More green on equity screens

  • Stocks across the globe mostly gained at the end of a week marked by renewed sentiment surrounding U.S.-China trade relations despite impending new tariffs.
  • U.S. stock index futures are riding the optimism, ahead by 0.6%, following yesterday's strong session that saw the Dow close up 326 points.
  • Weak German retail sales for July also reinforced expectations for a strong stimulus package from the ECB, while President Trump said that some trade discussions had taken place on Thursday, with more scheduled over the coming weeks.

The first hurricane of the season heads for Florida.



Florida braces for Hurricane Dorian

  • Hurricane Dorian is strengthening and is forecast to hit Florida as a Category 4 storm during the busy Labor Day weekend, becoming the first major hurricane to hit the area in 15 years.
  • American Airlines and Southwest are allowing travelers to change their Florida flights without fees ahead of the storm, potentially weighing on the carriers which have weathered a difficult summer.
  • Some of the nation's largest investor-owned hospitals are also gathering supplies in preparation, including Tenet Healthcare (NYSE:THC), HCA Healthcare (NYSE:HCA) and Universal Health Services (NYSE:UHS).
  • There's additional concern for insurers and orange juice farmers, while the oil industry watches if the storm will pass into the Gulf of Mexico.


A good global economic indicator.


Baltic Dry Index sails to five-year high

  • The Baltic Dry Index rose 4.44% to 2,378 points to make it seven days in a row of moving higher and record a five-year high.
  • Capesize rates were up 7.43% on strong miner interest and Handysize rates rose 1.35% on the day.
  • Related stocks: Diana Shipping (NYSE:DSX), DryShips (NASDAQ:DRYS), Eagle Bulk Shipping (NASDAQ:EGLE), Navios Maritime Holdings (NYSE:NM), Navios Maritime Partners (NYSE:NMM), Globus Maritime Limited (NASDAQ:GLBS), Safe Bulkers (NYSE:SB), Scorpio Bulkers (NYSE:SALT), Star Bulk Carriers (NASDAQ:SBLK), Golden Ocean Group Limited (NASDAQ:GOGL), Seanergy Maritime (NASDAQ:SHIP), Ge


Argentina defaults again.


S&P calls 'default' in Argentina

  • Argentina's decision to "unilaterally" extend maturities on its short-term debt constitutes a "default," according to Standard & Poor's, which slashed the country's long-term foreign and local currency issue ratings to CCC - "vulnerable to nonpayment."
  • The downgrade came after Argentine bond prices fell and country risk soared to levels not seen since 2005 on Thursday amid fears of a full-blown financial crisis.


Insider buying.


Fox shares rise as Murdoch buys $16M worth

  • Fox shares are higher after hours (FOX +6.8%, FOXA +2%) after the disclosure of a share purchase by Chairman Rupert Murdoch.
  • An SEC filing shows Murdoch bought 500,000 shares between Tuesday and Wednesday: 100,000 shares at an average price of $32.24 on Tuesday, and 400,000 shares at an average price of $32.01 on Wednesday.
  • That's a total outlay of just over $16.2M.
  • The moves leave him with beneficial ownership of 1,205,714 shares.


Another show coming.


Apple sets Sept. 10 event, likely for new iPhones

  • Apple (AAPL +1.6%) has sent out invitations for a Sept. 10 event, at which it's expected to announce its new iPhones.
  • But along with that, observers expect pricing details for its subscription television service, along with more general information about service launches.
  • Apple is reportedly considering a $9.99/month price for the television service.
  • Media reports have the company announcing three new iPhones, including a successor to the cheaper iPhone XR as well as two "pro" upgrades to the XS and XS Max.


Autonomous driving coming soon.


Mobileye breaks ground on Jerusalem facility

  • Intel's (NASDAQ:INTC) Mobileye lays the cornerstone for the new global development center in Jerusalem.
  • When completed, the facility will span 50,000 square meters above ground and 78,000 square meters below ground with space for as many as 2,700 employees.
  • The facility is scheduled to open in 2022.


The disaster du jour! I remain long.


Ulta Beauty EPS misses by $0.08, misses on revenue

  • Ulta Beauty (NASDAQ:ULTA): Q2 Non-GAAP EPS of $2.72 misses by $0.08; GAAP EPS of $2.76 misses by $0.04.
  • Revenue of $1.67B (+12.1% Y/Y) misses by $10M.
  • Shares -13.41%.



Makeup malaise hits Ulta Beauty and peers

  • Ulta Beauty (NASDAQ:ULTA) is in freefall after a soft Q2 earnings report and warning on a July to August slowdown in color cosmetics sales.
  • During the earnings call (transcript), Ulta execs stated that there's been a "disruption in the makeup category" that accelerated over the last several weeks. "After several years of very strong performance, growth in the makeup category has been decelerating over the last two years, but recently turned negative," noted Ulta CEO Mary Dillon.
  • Surveying the scene, Oppenheimer warns that the makeup malaise could last the balance of the year as the comparable sales marks will be tough to match, but sees value for long-term ULTA investors at the current trading price.
  • Shares of Ulta Beauty are showing a 24.88% loss in premarket action after the surprise guidance cut. Estee Lauder (NYSE:EL) is down 1.28% premarket and Coty (NYSE:COTY) is off 2.57%. Shares of e.l.f. Beauty (NYSE:ELF) are down 0.90% in the early session. Revlon (NYSE:REV) isn't trading yet.


The market did not react well to this report.


Workday EPS beats by $0.09, beats on revenue

  • Workday (NASDAQ:WDAY): Q2 Non-GAAP EPS of $0.44 beats by $0.09; GAAP EPS of -$0.53 beats by $0.05.
  • Revenue of $887.8M (+32.2% Y/Y) beats by $15.36M.
  • Shares -0.7%.
Bill Gunderson

Bill Gunderson

Bill Gunderson is a wealth manager, syndicated financial talk show host, and author of the Best Stocks Now -- one of the top 10 best selling financial aps in the world.

He is a frequent guest on local and national media, including CNBC, Fox Business, Fox News, Bloomberg, Barron's, Forbes, and others.

His wealth management business caters to high net worth individuals clients all over the world. He would be happy to look at your portfolio.

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