TradeTheNews.com Weekly
Market Update: Solid corporate earnings and surprisingly strong in US GDP keep
markets climbing
Fri, 26 Apr 2019 16:06 PM EST
US stock indices tested last fall’s highs this week amid a slew of corporate
earnings reports. In many cases managements easily surpassed expectations that
had been significantly lowered late last year as deceleration in earnings
growth failed to match the most draconian forecasts. Central banks struck up a
fresh chorus of dovish signals as economic data points kept global growth
concerns smoldering. Friday’s much stronger than expected preliminary reading
on US Q1 GDP did little to offset the sputtering global growth narrative but
did suggest inflation remains significantly below the Fed’s comfort zone.
Following the 3.2% GDP print, the US 10-year yield drifted back down below 2.5%
for the first time in about two weeks. Crude prices retreated from 6-month
highs on what some noted was a much needed technical correction. The Dollar
index surpassed 98 mid-week for the first time since 2017 spurred by disappointing
data abroad. For the week, the S&P gained 1.2%, the DJIA slipped 0.1%, and
the Nasdaq added 1.9%.
In corporate news this week, earnings season for tech companies took center
stage. Amazon popped after reporting its profitability surged, with a significant
boost from its AWS division, and announcing that it intends to flex its
logistical might to reduce standard free shipping times to one-day from two.
Facebook shares soared after beating quarterly expectations and notching
healthy US ad revenue, despite setting aside $3B for a possible FTC fine.
Microsoft profitability jumped, helped by a 75% increase in revenue from its
Azure division, briefly bumping the tech giant’s market cap above $1 trillion.
Tesla shares fell to a 2-year low after the auto maker badly missed Q1
expectations and hinted that a capital raise may be under consideration. 3M
missed expectations and cut its outlook in a particularly harsh quarterly
report that helped rekindle worries about global industrial growth and weighed
on the Dow midweek. Tobacco names dropped after Walgreens and Rite Aid
announced they would move forward with plans to restrict tobacco purchases to
customers over 21. Kraft Heinz named marketing veteran Miguel Patricio as its
new CEO amid the company’s turnaround push. Netflix offered $2.2B in junk bonds
in order to keep its content spending train rolling.
MONDAY APRIL 22
*(US) MAR EXISTING HOME SALES: 5.21M V 5.30ME
TUESDAY APRIL 23
KO Reports Q1 $0.48 v $0.46e, Rev $8.00B v $7.89Be
PG Reports Q3 $1.06 v $1.04e, Rev $16.5B v $16.4Be
STT Reports Q1 $1.24 adj v $1.19e, Rev $2.26B v $2.91Be
VZ Reports Q1 $1.20 v $1.17e, Rev $32.1B v $32.2Be
LMT Reports Q1 $5.99 v $4.29e, Rev $14.3B v $12.6Be
*(US) APR RICHMOND FED MANUFACTURING INDEX: 3 V 10E
*(US) MAR NEW HOME SALES: 692K V 649KE
WBA To implement new Tobacco 21 policy to further prevent youth access to
tobacco products, effective Sept 1st
TXN Reports Q1 $1.26** v $1.13e, Rev $3.59B v $3.48Be
CP Reports Q1 C$2.79 v C$3.02e, Rev C$1.77B v C$1.77Be
SNAP Reports Q1 -$0.10 v -$0.12e, Rev $320.4M v $306Me
(BR) Brazil House Committee approves flagship pension reform bill
WEDNESDAY APRIL 24
CSGN.CH Reports Q1 (CHF) Net 749M v 717Me, Rev 5.39B v 5.10Be; positive
momentum continued in Apr, but cautiously optimistic on Q2
SAP.DE Reports Q1 Non-IFRS EPS €0.90 v €0.83e, Op €1.47B v €1.24B y/y, Rev
€6.12B v €6.00Be; Initiates Comprehensive Review To Accelerate Operational
Excellence
HEIA.NL Reports Q1 Net €299M v €260M y/y
*(DE) GERMANY APR IFO BUSINESS CLIMATE SURVEY: 99.2 V 99.9E; CURRENT ASSESSMENT
SURVEY: 103.3 V 103.5E
SWK Reports Q1 $1.42 adj v $1.19e, Rev $3.33B v $3.31Be
APC Occidental raises offer to $76/shr in cash and stock valued at $57B
(Chevron bid $65/shr in cash and stock)
BA Reports Q1 $3.16 v $3.11e, Rev $22.9B v $22.3Be; pauses buyback program and
withdraws guidance (as expected)
CAT Reports Q1 $2.94 adj v $2.84e, Rev $13.5B v $13.4Be
*(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 1.75%; AS
EXPECTED; statement drops reference to future rate hikes
(US) Association of American Railroads weekly rail traffic report for week
ending April 20th: 528.2K, -1.2% y/y (has fallen for 10 consecutive weeks)
MSFT Reports Q3 $1.14 v $1.00e, Rev $30.6B v $29.8Be
FB Reports Q1 $1.89 adj* v $1.66e, Rev $15.1B v $15.0Be
V Reports Q2 $1.31 v $1.24e, Rev $5.50B v $5.44Be
CMG Reports Q1 $3.40 v $3.00e, Rev $1.30B v $1.27Be
TSLA Reports Q1 -$2.90 v -$1.21e, Rev $4.54B v $5.78Be
*(KR) SOUTH KOREA Q1 PRELIMINARY GDP Q/Q: -0.3% V +0.3%E (weakest since Q4
2008); Y/Y: 1.8% V 2.5%E
THURSDAY APRIL 25
UBSG.CH Reports Q1 Net $1.14B v $0.9Be, adj Pretax $1.58B v $1.3Be, Rev $7.2B v
$7.0Be
NOKIA.FI Reports Q1 Net -€118M v +€166Me, Rev €5.1B v €5.0Be
BAYN.DE Reports Q1 €2.55 v €2.24 y/y, Adj EBITDA €4.19B v €4.18Be, Rev €13.02B
v €12.57Be
DBK.DE Said to deem talks with Commerzbank a success today - German press
*(SE) SWEDEN CENTRAL BANK (RIKSBANK) LEAVES REPO RATE UNCHANGED AT -0.25%; AS
EXPECTED; extends its view for next rate hike
BBD.B.CA Reports prelim Q1 adj EBIT $170M v $240Me, Rev $3.5B v $4.0B y/y
UPS Reports Q1 $1.39 v $1.42e, Rev $17.2B v $17.8Be
MMM Reports Q1 $2.23 v $2.50e, Rev $7.86B v $8.09Be; Announces restructuring
actions, to cut 2K positions worldwide
(US) Nevada reports March casino gaming Rev $1.02B, -0.1% y/y; Las Vegas strip
Rev $551.9M, -3.8% y/y
(US) Atlanta Fed cuts Q1 GDP forecast to 2.7% v 2.8% prior
FRIDAY APRIL 26
DBK.DE Reports Q1 Net €201M v €200M prelim, Pretax €292M v €290M prelim, Rev €6.35B
v €6.4B prelim
SAN.FR Reports Q1 Business EPS €1.42 v €1.32e, Business Net €1.77B v €1.67Be,
Rev €8.39B v €8.32Be
AZN.UK Reports Q1 Core EPS $0.89 v $0.84e, Rev $5.46B v $5.38Be
RBS.UK Reports Q1 Net £707M v £546Me, adj Op £1.01B v £0.9Be, Rev £3.04B v
£3.30Be; retains outlook
(CN) Reportedly China President Xi could travel to U.S. as early as June -
Chinese press
UBER To offer 180M shares in IPO; Said to price at $44-50/shr; Provides Q1
outlook
*(US) Q1 ADVANCE GDP PRICE INDEX: 0.9% V 1.2%E; CORE PCE Q/Q: 1.3% V 1.4%E
*(US) Q1 ADVANCE GDP ANNUALIZED Q/Q: 3.2% V 2.3%E; PERSONAL CONSUMPTION: 1.2% V
1.0%E
