Bill’s Takes: June 4th 2019

Tuesday 6/4/19=DJIA +512 NASDAQ +194

The market exploded to the upside on Tuesday after Jay Powell assured the market that he stands ready to cut rates if the U.S. economy begins to falter.

 

Now a re-cap of Monday, bloody Monday:

Big techs battered by fears of increased U.S. government scrutiny

  • The Nasdaq Composite bore the brunt of today’s stock market losses on reports that the U.S. government was targeting various big tech companies for antitrust violations.
  • Nasdaq tumbled 1.6% to enter correction territory, trading more than 10% below its late April record high.
  • Alphabet shares sank 6.7% following reports that the Justice Department was preparing to launch an antitrust investigation of Google, while Amazon slid 5.4% and Facebook fell 7.7% following a WSJ report that the Federal Trade Commission could examine the companies’ practices, and Apple slipped 1.8% after Reuters reported the DoJ had received jurisdiction to investigate that company.
  • Communications services (-3.1%) was today’s biggest decliner among the S&P sectors, followed by technology (-1.7%) and consumer discretionary (-0.8%), but the other eight S&P groups all finished higher, led by materials (+3.1%).
  • Even so, continuing concerns about trade and growth helped limit buying conviction throughout the day.
  • Growing expectations for a rate cut, as well as general growth concerns, again sent Treasury yields tumbling, with the two-year note sinking 12 bps to 1.83% and the 10-year yield sliding 6 bps to 2.08%.

 

Semis bucked the downtrend, however:

Semis gain on Cypress sale, AMD deal

  • The Philadelphia Semiconductor Index gains 0.7% compared to the 0.9% drop for the tech sector (NYSEARCA:XLK).

 

 

I still love my AMD. So does the App:

Data from www.BestStocksNowApp.com

 

Now Apple is under DOJ scrutiny:

DoJ heading Apple antitrust probe – Reuters

  • Apple (NASDAQ:AAPL) drops 2% on a Reuters report that the U.S. Department of Justice will receive jurisdiction over a potential antitrust probe.
  • The DoJ and FTC recently held meetings to determine who would oversee broad investigations into the tech industry.
  • Last week, Bloomberg reported a similar DoJ arrangement for a Google probe.

I still own Apple in my Premier Growth (Buy and Hold) and in my Dividend and Growth portfolios.

Another Veggie burger to hit the market:

Nestle to sell veggie burger in U.S.

  • Nestle (OTCPK:NSRGY +2.1%) says it plans to launch a plant-based Awesome Burger product this fall through its Sweet Earth brand.
  • The Awesome Burger will be available at grocery stores, restaurants and universities.
  • The company introduced a veggie burger under its Garden Gourmet brand in Europe earlier this year.
  • Nestle’s veggie burger moves follow the positive consumer response to Beyond Meat’s (NASDAQ:BYND) products and the Impossible Whopper offered at Burger Kings in partnership with Impossible Foods (IMPSBL).

Nestle’s stock is “flame-broiling” right now:

I have an issue with its current valuation, however.   

Data from www.BestStocksNowApp.com

 

Never say “Forever.”:

Latest retail hit as Forever 21 explores restructuring

  • Forever 21 is in talks with potential lenders and restructuring advisers as it explores options for turning around its ailing business, Bloomberg reports.
  • The company is exploring financing that would shore up its liquidity and ensure founder Do Won Chang maintains control.
  • It’s also spoken with Apollo Global Management about lining up potential debtor-in-possession financing if it were to seek bankruptcy.

 

More mall carnage:

Eyes on clothing stocks after share price wipeout

  • J. Jill (NYSE:JILL) fell 73% in May, but as Mitch Nolen points out the the carnage across apparel store stocks was widespread.
  • Names in the sector that fell off by more than 25% per Nolen include Christopher & Banks (CBK-0.6%), Destination Maternity (DEST -3.8%), Abercrombie & Fitch (ANF -2.7%), Tilly’s (TLYS+2.8%), Tailored Brands (TLRD +10.5%), Lands’ End (LE -3.2%), Gap (GPS +1.3%) and Citi Trends (CTRN +2.8%).
  • Seeking Alpha author BOOX Research also has its eyes on the sector, calling L Brands (LB+0.6%), Gap and Hanesbrands (HBI +0.8%) interesting value picks at face value with attractive dividend yields. “L Brands with a P/E multiple of 9.9x, 0.5x price to sales, EV/EBITDA 6.3X, and a dividend yield at 8% (5.3% forward yield given recent cut) should pop up on many radars,” notes BOOX.

 

Keep your eye on this ETF:

Will he say anything about a rate cut?

  • Fed Chairman Jerome Powell will have a chance to say his latest thoughts this morning when he delivers the opening remarks to the “Conference on Monetary Policy Strategy, Tools And Communication Practices.”
  • The speech comes after St. Louis Fed President James Bullard said on Monday that unresolved trade disputes and below-target inflation “suggest that the central bank needs to tread carefully in order to help sustain the economic expansion” and indicated that a rate cut could be warranted.
  • Policymakers up to this point have largely stood by their outlook that interest rates were at an appropriate level and would likely remain unchanged throughout the year, although fed fund futures have steadily upped bets for a cut this year.

 

More trouble for Uber:

Uber under IRS examination

  • In a filing, Uber (NYSE:UBERreveals it’s under federal income tax examination by the IRS for the tax years 2013-14.
  • Various state and foreign tax authorities are also probing Uber.
  • The company says it has adequate money reserved to deal with the tax issues.
  • Uber shares are down 0.1% to $41.20 paring earlier gains from a slate of Buy-equivalent starts following the quiet period expiration.

 

Gutsy calls by Loop Capital…

Loop Capital bullish on Netflix, Chinese retail names

  • In a round of coverage initiations, Loop Capital is bullish on Netflix along with a number of Chinese tech names.
  • The firm upgraded Netflix (NASDAQ:NFLX) to Buy, setting its price target to $425 (up from $395), implying 26% upside from today’s close; shares are up 0.6% after hours.
  • It’s also launched bullish coverage on Chinese retail, starting Alibaba (NYSE:BABA) at a Buy with $250 price target (vs. $149.91 close; shares are up 0.5% after hours) and JD.com (NASDAQ:JD) at Buy with a $40 price target (vs. $25.76 close; shares are up 0.2%).
  • The firm launched Tencent (OTCPK:TCEHY) at Buy with a target of HK$450 (vs. current HK$333.60) and Tencent Music Entertainment (NYSE:TME) at Buy with a $19 price target (implying 47% upside; shares are up 0.5% after hours).
  • Twitter (NYSE:TWTR) gets an initiation at Buy with a $55 price target, implying 60% upside; shares are up 0.6% after hours.
  • It’s also initiating iQiyi (NASDAQ:IQ) at Hold ($20 price target vs. $18 current); Baidu (NASDAQ:BIDU) at Hold ($125 price target vs. $107.78 current); and Alphabet (GOOGGOOGL) at Hold with a $1,250 target, implying 20% upside.

 

Coupa:

Nice report from Coupa. The name sounds like a New England version of Cooper, but it is not. I own the stock in my new EMERGING GROWTH portfolio. This is like my Double “A” Baseball team. Lots of top prospects down in this portfolio. I would love to promote them to my Ultra or Premier Growth Portfolios some day!

For more information on our managed growth portfolios, click here.

Coupa Software EPS beats by $0.07, beats on revenue

  • Coupa Software (NASDAQ:COUP): Q1 Non-GAAP EPS of $0.03 beats by $0.07; GAAP EPS of -$0.34 beats by $0.04.
  • Revenue of $81.34M (+44.3% Y/Y) beats by $7.49M

Data from www.BestStocksNowApp.com