We're into February and throughout the past month, we saw several big movers, significant technical events, earnings and notable corporate news! This article covers a brief rundown of this week's top U.S. Market pivotal movement written by our North American Research Desk.
The S&P 500 started pulling back.
Looking at a daily chart, the S&P500 started to slightly pullback after reaching its 200-day moving average. We remain optimistic which is why we kept our stop-loss at 2640, slightly lower than the 20-day moving average, while keeping our targets intact at 2816.5 and 2865 in extension.
On a longer time horizon (weekly chart), the SPX continues its uptrend with a stop-loss set at 2535 (February 2018 low) and closed above the 20-week moving average while testing its 50-week moving average. The RSI has finally broken above its 50 level, which is a positive sign for the index.
The percentage of stocks in the S&P 500 trading above their 200-day moving average closed the week at 44.5% after pulling back from its resistance level of 50%. The percentage of stocks in the S&P 500 trading above their 50-day moving average decreased to 72.5%. Finally, the percentage of stocks in the S&P 500 trading above their 20-day moving average fell towards 70.7%.
The VIX continues lower towards 16.05, which remains a positive factor for the U.S. indices.
The S&P 500 improved by 0.07% last week.
Economic snapshot:
On the economic data front, On the economic data front, initial jobless claims fell to 234K in week ended February 2 (estimated 221K) from 253K in the previous week. The trade deficit narrowed to $49.3B in November (estimated $54.0B) from $55.7B in October. In other news, factory orders declined 0.6% MoM in November (vs +0.3% estimated, -2.1% in October). Also, final readings of November durable goods orders increased 0.7% MoM in November (vs 1.5% expected, +0.8% previously estimated).
We had some big movers last week. Here's a look at the 8 most notable:
Mattel (MAT +24.63% WoW to $15.23) reported 4Q adj. EPS of $0.04, beating estimates of a LPS of $0.14 (the first beat since 2Q2016) vs. LPS of $0.72 a year ago on net sales of $1.52B (forecasted $1.44B) from $1.61B in the previous year.
Chipotle Mexican Grill (CMG +10.54% WoW to $582.77) reported 4Q adj. EPS of $1.72 (estimated $1.39) vs. $1.55 last year on revenue up 10.4% YoY to $1.23B (expected $1.19B). Comparable sales jumped by 6.1%, beating forecasts of 4.5%, while net income fell by 27% YoY to $32M.
Suntrust Banks (STI +8.24% WoW to $64.37) and BB&T Corp (BBT +2.8% WoW to $50.24) have both unanimously approved an all-stock transaction worth about $66B. SunTrust holders receive 1.295 shares of BB&T and will own 43% while BB&T holders will own 57%. The merger is expected to close in 4Q2019.
Twitter(TWTR -9.58% WoW to $30.01) unveiled 4Q adj. EPS of $0.31 (estimated $0.25) vs. $0.19 a year ago on revenue up 24% YoY to $908.8M (forecasted $867.1M). Advertising revenue increased by 23% YoY to $791M. The Co sees 1Q revenue in a range of $715M-$775M (expected $766.1M). Monthly active users declined to 321M (expected 323.8M) vs. 330M in the same period last year while monetizable daily active users grew by 9% YoY to 126M. Finally, the Co plans to stop reporting Monthly Active Users after the first quarter and will provide monetizable Daily Active Users.
Tapestry(TPR -12.35% WoW to $33.86) posted 2Q adj. EPS unchanged YoY at $1.07 (estimated $1.11) on net sales of $1.8B (forecasted $1.86B) from $1.79B in the previous year. The Co sees FY revenue increasing by a low-to-mid-single-digit rate and cut its FY forecast on adj. EPS to a range of $2.55-$2.6 (expected $2.77) compared to previous view of $2.75-$2.8.
Alliance Data Systems(ADS -9.38% WoW to $164.32) announced 4Q core EPS of $7.04 (estimated $6.94) vs. $6.26 last year on revenue of $2.06B (forecasted $2.12B) compared to $2.11B in the prior year. Net income advanced by 5% YoY to $285M. The Co sees FY core EPS of $22 (expected $24.35) and expects FY revenue of $8.1B (estimated $8.24B). Finally, the Co declared a quarterly cash dividend of $0.63 per share.
Electronic Arts(EA +6.99% WoW to $97.6) reported 3Q diluted EPS of $0.86 vs. LPS of $0.6 a year ago on net revenue of $1.29B from $1.16B in the previous year. The Co sees 4Q adj. EPS of $0.9 (expected $1.59) and expects adj. revenue to reach $1.17B (estimated $1.47B). Finally, the Co cut its FY guidance on adj. revenue to $4.875B (forecasted $5.19B) vs. the prior view of $5.2B and anticipates FY adj. EPS to reach $3.85 (expected $4.57).
Snap (SNAP +31.69% WoW to $9.1) posted 4Q adj, LPS of $0.04 (estimated $0.08) from LPS of $0.13 a year ago on revenue of $390M (consensus $378M) from $286M the previous year. Adj. EBITDA loss narrowed to $192M from $350M last year while daily active users (DAUs) remained at $186M compared to last quarter (expected $184M). Meanwhile, the Co expects 1Q revenue to grow 24% - 34% YoY to $285M - $310M (expected $306M) and Adj. EBITDA loss to narrow to $140M - $165M (forecasted $167M).
Skyworks Solutions(SWKS +10.48% WoW to $81.71) reported 1Q adj. EPS of $1.83 (consensus $1.82) from $2.00 a year ago on revenue of $972M (forecasted $970M) from $1.05B in the prior year. The Co sees 2Q adj. EPS of $1.43 (expected $1.51) and revenue of $800M-$820M (estimated $849.4M). Meanwhile, the Co announced a new $2B stock repurchase program. Finally, the Co was raised to "buy" from "neutral" at Goldman Sachs.
Take-Two Interactive Software (TTWO -7.44% WoW to $97.14) announced 3Q diluted EPS of $1.57 vs. $0.21 a year ago on net revenue of $1.25B from $481M in the previous year. The Co raised its 2019 view on adj. revenue to a range of $2.89B-$2.94B (expected $2.99B) vs. prior view of $2.8B-$2.9B.
Capri Holdings(CPRI +8.43% WoW to $46.03) reported 3Q adj. EPS of $1.76 (estimated $1.58) vs. $1.77 last year on revenue unchanged YoY at $1.44B (forecasted $1.46B). Comparable sales decreased by 2.4%, lower than expectations of 2%. The Co raised its FY guidance on adj. EPS to a range of $5-$5.05 (estimated $4.98) vs. prior view of $4.95-$5.05 and boosted its revenue forecast to reach $5.22B (forecasted $5.2B) vs. prior view of $5.13B. Finally, the Co sees FY 2020 EPS of $4.95 (expected $5) and revenue reaching $6.1B (estimated $5.9B).
Estée Lauder(EL +13.16% WoW to $154.71) posted 2Q adj. EPS of $1.74 (estimated $1.55) vs. $1.52 a year ago on sales up 7% YoY to $4.01B. The Co declared a quarterly dividend of $0.43. The Co sees 3Q adj. EPS in a range of $1.26-$1.28 (forecasted $1.24) and raised its FY expectations of adj. EPS to a range of $4.92-$5 (expected $4.88) vs. prior forecast of $4.73-$4.82.
Goodyear Tire & Rubber (GT -11.08% WoW to $18.69) posted 4Q adj. EPS of $0.51 (estimated $0.6) vs. $0.99 a year ago on net sales of $3.88B (forecasted $3.91B) from $4.07B in the previous year.
Coty Inc(COTY +23.74% WoW to $9.33) unveiled 2Q adj. EPS down 25% YoY to $0.24 (estimated $0.22) on net revenue down 5% YoY to $2.51B (forecasted $2.46B).
Earnings preview this week:
UAA US: On Tuesday, Under Armour is expected to report 4Q EPS of $0.041 vs. a break-even level a year ago on revenue remaining unchanged YoY at $1.4B. The Co was raised to "buy" from "neutral" at Goldman Sachs. Technically speaking, the RSI is above 50 while the MACD is positive and above its signal line. The configuration is positive. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at 20.04 and 20.19). We expect to reach a higher target of $23.3 with a stop-loss of $19.5.
TRIP US: On the same day, TripAdvisor is likely to post 4Q EPS of $0.283 vs. $0.06 last year on revenue of $342.9M compared to $321M in the previous year. In other news, the Co was downgraded to "sell" from "neutral" at UBS. Looking at the chart, the RSI is above 50 while the MACD is positive and above its signal line. The configuration is positive. Moreover, the stock is above its 20 and 50 day MA (respectively at 57.26 and 57.94). As long as we're trading above $55.4, it is likely that the stock will reach $68.1.
CSCO US: On Wednesday, in the after-hours, Cisco Systems is awaited to unveil 2Q EPS of $0.723 vs. $0.63 a year ago on higher revenue of $12.4B from $11.9B in the prior year. Recently, the Co completed the acquisition of privately-held Luxtera, "a semiconductor company that uses silicon photonics to build integrated optics capabilities". From a technical point of view, the RSI is above 50 while the MACD is positive and above its signal line. The configuration is positive. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at 45.55 and 45.11). Cisco Systems is currently trading near its 52 week high reached at 49.47 on 03/10/18. The stock is anticipated to trade higher towards $51.6 with a stop-loss of $44.6.
NVDA US: On Thursday,Nvidia is anticipated to announce 4Q EPS of $0.871 vs. $1.72 last year on lower revenue of $2.3B compared to $2.9B a year earlier. In other news, the Co was cut to "equal-weight" from "overweight" at Morgan Stanley. From a chartist point of view, the RSI is above 50. The MACD is above its signal line and negative. The MACD must break above its zero level to call for further upside. Moreover, the stock is above its 20 and 50 day MA (respectively at 147.25 and 145.91). We are confident prices can gain traction towards $183.1 with a stop-loss of $134.7.
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