TradeTheNews.com Weekly
Market Update: FANG's Flounder, Trump and Tusk Signal Détente; US Economic
Engine Purrs
Fri, 27 Jul 2018 16:05 PM EST
US stocks spent the better part of the week moving higher, but investors looked
away from the NASDAQ and high beta names in particular for leadership. As the
Q2 earnings season ramped up, there were some notable disappointments among key
tech firms, leading to some market rotation. Despite generally better than
expected results, many managements outside of tech also noted that rising raw
material costs and stiffening FX headwinds have resulted in a challenging
environment and conservative guidance. For the week the S&P500 gained 0.6%,
the DJIA added 1.6%, while the Nasdaq lost 1.1%.
The economic data largely surpassed expectations, with the exception of perhaps
Friday’s first look at Q2 GDP. Nevertheless, the US economy saw growth that
surpassed 4% in Q2 which the Administration was quick to tout as a direct
result of the President’s policies. The July Richmond Fed index beat
expectations suggesting the growth momentum has continued in to Q3, while
European data showed some improving trends as well. Trade remained a key topic
with the Chinese Yuan plumbing fresh lows early on, leading to another salvo of
tough rhetoric on both sides. Wednesday saw President Trump and the EU
President Juncker announce concessions had been reached to ease trade tensions
– including Europe expressing a willingness to lower certain industrial tariffs
– while formal negotiations continue in good faith.
Corporate news this week was mostly dominated by the aforementioned avalanche
of earnings, notably in the FANG space. Alphabet rallied on a bottom-line beat
and Amazon lifted after surpassing profit expectations, but Twitter slid on a
drop in monthly active users and Facebook took a record hit to its market cap
after disclosing its total revenue growth rate is expected to decelerate in the
second half as expenses continue to mount. Many companies said they saw effects
from rising input prices and shipping costs this quarter, including Whirlpool,
Kimberly Clark, GM, Fiat, Coca-Cola, Packaging Corp, and USG. Qualcomm rose and
NXP fell after Chinese regulators scuttled their merger agreement, as largely
anticipated. Intel tumbled on concerns about its slow rollout of next-gen
chips. McDonald’s shares spilled after it missed same-store sales expectations,
Chipotle rallied on better than expected results, and the board at Papa John’s
launched a “poison pill” effort to block former CEO John Schnatter from gaining
control of the company. A report of Friday alleged sexual misconduct by Les
Moonves, putting the future of the CBS CEO in question as he continues to
battle with Shari Redstone over the fate of the company.
SUN JULY 22
(CN) CHINA PBOC CONDUCTS CNY502B IN 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) V
CNY188.5B PRIOR AT 3.30% V 3.30% PRIOR (2nd MLF operation in July)
MON JULY 23
CWK Files to sell 45M IPO shares between $16.00 and $18.00 on the NYSE - filing
ITW Reports Q2 $1.97 v $1.98e, Rev $3.83B v $3.85Be
AMZN Pres Trump again criticizes Washington Post and Amazon's deal shipping
deal with USPS; speculates that antitrust case should be brought against Amazon
GOOGL Reports Q2 $11.75** (Ex fines) v $8.90 y/y, Rev $26.2B (ex $6.4B TAC) v
$25.6Be
WHR Reports Q2 $3.20 v $3.63e, Rev $5.14B v $5.22Be
TUES JULY 24
UBSG.CH Reports Q2 (CHF) Net 1.28B v 1.09Be, adj Pretax 1.81B v 1.72Be, Rev
7.55B v 7.27B y/y
(FR) FRANCE JULY BUSINESS CONFIDENCE: 106 V 107E
(FR) FRANCE JULY PRELIMINARY MANUFACTURING PMI: 53.1 V 52.5E (22nd month of
expansion)
*(EU) EURO ZONE JULY PRELIMINARY MANUFACTURING PMI: 55.1 V 54.7E (60th month of
expansion)
(TR) TURKEY CENTRAL BANK (CBRT) LEAVES ONE-WEEK REPO RATE UNCHANGED AT 17.75%;
NOT EXPECTED
LMT Reports Q2 $4.05 v $3.89e, Rev $13.4B v $12.7Be
KMB Reports Q2 $1.59 adj v $1.60e, Rev $4.60B v $4.63Be
(UK) UK Brexit Department Document (White Paper details): Will be necessary to
ensure EU laws continue to apply to Britain during Post-Brexit transition
period; new Brexit laws will modify parts of the act to reflect the departure
of the UK
(UK) PM May: I will take personal control of the Brexit negotiations
*(US) JULY PRELIMINARY MARKIT MANUFACTURING PMI: 55.5 V 55.1E
*(US) JULY RICHMOND FED MANUFACTURING INDEX: 20 V 18E
TXN Reports Q2 $1.40 v $1.33e, Rev $4.0B v $3.95Be
WEDS JULY 25
DBK.DE Reports Q2 Net €401M v €400M prelim, Pretax €700M v €700M prelim, Rev
€6.6B v €6.6B prelim
VOD.UK Reports Q1 group Rev €10.9B* v €11.5B y/y
(DE) GERMANY JULY IFO BUSINESS CLIMATE: 101.7 V 101.5E; CURRENT ASSESSMENT:
105.3 V 104.9E
UPS Reports Q2 $1.94 v $1.92e, Rev $17.5B v $17.2Be
BA Reports Q2 $3.33 v $3.24e, Rev $24.3B v $24.0Be
FCX Reports Q2 $0.58 v $0.54e, Rev $5.17B v $4.82Be
(US) JUN NEW HOME SALES: 631K V 668KE
*(US) DOE CRUDE: -6.2M V -1ME; GASOLINE: -2.3M V +0.5ME; DISTILLATE: -0.1M V
+1ME
(US) Association of American Railroads weekly rail traffic report for week ending
July 21st: 553K, +4.9% y/y
(US) President Trump reportedly has received concessions from Europe to avert
trade war; Europe agrees to lower industrial tariffs - press
FB Reports Q2 $1.74 v $1.75e, Rev $13.2B v $13.4Be
V Reports Q3 $1.20 v $1.09e, Rev $5.20B v $5.08Be
F Reports Q2 $0.27 v $0.34e, Rev $38.9B v $35.5Be
(US) President Trump: US and EU will be winners, have agreed to work together
toward zero tariffs on non-auto industrial goods - press conf with EU's Juncker
(KR) Sec of State Pompeo: North Korea is continuing to produce nuclear
material; we want denuclearization to occur by end of 2020 - Senate testimony
FB Total revenue growth rate expected to continue to decelerate in H2 2018,
down in high single digits during Q3 and Q4 - earnings call comments
000660.KR Reports Q2 (KRW) Net 4.33T v 3.4Te; Op 5.57T v 5.3Te; Rev 10.37T v
10.2Te
THURS JULY 26
AIR.FR Reports H1 Net €496M v €1.1B y/y, adj EBIT €1.16B v €988Me, Rev €25.0B v
€25.2B y/y
ROG.CH Reports H1 (CHF) Core EPS 9.84 v 8.23 y/y, Core operating 11.2B v 10.1B
y/y, Rev 28.1B v 27.5Be
NOKIA.FI Reports Q2 adj €0.03 v €0.08 y/y, adj Op €334M v €574M y/y, Rev €5.31B
v €5.6B y/y
ABI.BE Reports Q2 $1.10 v $1.05e, Adj EBITDA $5.57B v $5.49Be, Rev $14.0B v
$13.9Be
ORA.FR Reports Q2 EBITDA €3.38B v €3.28B y/y, Rev €10.2B v €10.0B y/y
RDSA.NL Reports Q2 basic CCS EPS $0.56 v $0.71e, adj Net $6.02B v $1.55B y/y,
Rev $96.7B v $72.1B y/y
AZN.UK Reports Q2 Core EPS $0.69 v $0.71e, Rev $5.16B v $4.99Be
DGE.UK Reports FY18 EPS 118.6p v 108.5p y/y, EBIT £3.82B v £3.77Be, Rev £12.2B
v £12.1B y/y; approves buyback program up to £2.0B (~2% of market cap)
066570.KR Reports final Q2 (KRW) Net 327B v 403Be; Op 771B v 771B prelim; Rev
15.0T v 15.02T prelim
(EU) ECB LEAVES 7-DAY MAIN REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED
*(US) JUN PRELIMINARY DURABLE GOODS ORDERS: 1.0% V 3.0%E; DURABLES EX
TRANSPORTATION: 0.4% V 0.5%E
(UK) EU Chief Brexit Negotiator Barnier: EU will not delegate the application
of its customs policy to a non-member (rules out allowing the UK to collect
customs duties on its behalf); rejects UK white paper proposal on customs -
press conf comments
CA.FR Reports Q2 Rev €20.8B v €21.8B y/y
(US) White House Econ Adviser Kudlow: Number on US GDP growth due on Friday
'will be big'
AMZN Reports Q2 $5.07 v $2.49e, Rev $52.9B v $53.4Be
CMG Reports Q2 $2.87 v $2.78e, Rev $1.30B v $1.26Be
SEC rejects Winklevoss Bitcoin ETF proposal, says it does not met regulatory
standards - CNBC
BHP.AU Announces sale of US onshore (shale) assets to unit of BP for base
consideration of $10.8B in cash; expected to close by the end of Oct 2018
FRI JULY 27
BAS.DE Reports Q2 Adj Net €1.48B v €1.50B y/y, EBIT €2.36B v €2.42Be, Rev
€16.8B v €16.6Be
(FR) FRANCE Q2 ADVANCE GDP Q/Q: 0.2% V 0.3%E; Y/Y: 1.7% V 1.9%
MRK Reports Q2 $1.06 v $1.03e, Rev $10.5B v $10.3Be
(US) Q2 ADVANCE GDP PRICE INDEX: 3.0% V 2.3%E; CORE PCE Q/Q: 2.0% V 2.2%E
(US) Q2 ADVANCE GDP ANNUALIZED Q/Q: 4.1% V 4.2%E (fastest pace since 2014);
PERSONAL CONSUMPTION: 4.0% V 3.0%E
CBS CEO Les Moonves said to be accused of sexual misconduct in upcoming New
Yorker piece by reporter Ronan Farrow - press
