SP500 Traders are Trying to Shift Through a Lot of “Noise”

The coronavirus situation in the U.S. is a clear bright spot with several health experts believing the country is close to reaching so-called “herd immunity” and expect to soon see a dramatic drop in new coronavirus cases.

Fundamental analysis

The good news is most people are getting back to normalcy and the economic activity is looking robust. That’s despite many businesses having a difficult time hiring help. As companies are having to offer higher and higher wages there is increasing worry about rising inflation. There is also more talk about the possible implications of looming tax hikes that are expected to pay for some of President Biden’s ambitious economic plans.

An investor note from Goldman Sachs warned that the planned corporate tax hike to 28% could decrease earnings for some of the mega-cap technology companies as much as -9% next year, while S&P 500 earnings overall could take an -8% hit.

The analysts also warned that the “FAAMG” stock complex (Facebook, Apple, Amazon, Microsoft and Google) could be at risk of a year-end selloff if the President’s capital gains tax hike is implemented.

These stocks account for nearly 30% of the S&P 500’s market cap gains over the last five years, meaning investors have earned close to $5 trillion over that time.

Investors may look to take some of those gains in 2021 to lock in the lower tax rate.

Some of the big money players and large funds have shifted to value and more traditional inflationary type plays. While the younger Robinhood and Wall Streets Bets crowd that was once pumping the high-flying tech sector are now looking at buying airline and concert tickets.

As always, you have to pay attention to money-flow and ask yourself who will provide the next round of big buying?

Today’s key economic data will be the Labor Department’s JOLTS report, which could provide a deeper look at what’s going on in the job market. Federal Reserve officials are also making the rounds today with at least five central bankers scheduled to speak, including Federal Reserve Governor Lael Brainard. Earnings on tap include Electronic Arts, Honda, Palantir, Toyota, and Vodafone

Continued Talk of Commodity Supercycle

The price of iron ore hit a record high on Monday in the latest sign of booming commodity markets, which have gone into overdrive in recent weeks as large economies recover from the pandemic. The steelmaking ingredient, an important source of income for the mining industry, rose 8.5 per cent to a record high of almost $230 a ton fueled by strong demand from China where mills have cranked up production. Other commodities also rose sharply, including copper. Keep in mind, in the past 12-months, corn and crude oil prices are up +95%, soybean oil up +125%, silver up +75%, lean hogs up +54%, cotton up +47%, sugar up +57%, lumber up +350%, stock market up +43%, Bitcoin up +215%.

Technical analysis

Yesterday’s levels played very well. SP500 is trading in a bearish zone now. The upper range is 4156. Middle-strength levels within this zone – 4124, 4092 and 4060. Weal levels – 4140, 4108 and 4076. Neutral zone 4156 – 4221. Middle strength level – 4188.5. Weak levels – 4172.25 and 4204.75. Keep in mind SP500 is close to first daily support around 4100. In order to place a trade, always watch price action at mentioned levels. Once level turns into support/resistance, consider going long/short.

Facebook Trading Lower After Citi Downgrade

Facebook Inc. (FB) is trading near a weekly low on Monday after Citi analyst Jason Bazinet downgraded the social media giant from ‘Buy’ to ‘Neutral’, insisting that Wall Street is “overly bullish on the growth potential of the advertising market”. The stock has sold off more than 1% in the pre-market and is pressing against a trading floor near 315, with a breakdown favoring a critical test of April breakout support at 303.

Politics and Advertising

The company is highly dependent on advertising revenue to meet quarterly revenue guidance, vulnerable to cyclical forces that can impact a broad spectrum of marketing decisions. The stock is trading near an all-time high even though the pandemic is still taking a bite out of ad purchases while stubbornly high unemployment rates and slow vaccine uptake in other parts of the world could defer the much-heralded ‘return to normalcy’ until 2022.

Facebook is also a prime political target due to its massive footprint and engagement in questionable censorship practices. Along with Alphabet Inc. (GOOG) and Twitter Inc. (TWTR), Republicans have accused CEO Zuckerberg and Co. of selective censorship under the broad spectrum of ‘misinformation’.  Unfortunately, they’re finding few friends on the other side of the aisle, with Democrats opening investigations on monopolistic behavior.

Wall Street and Technical Outlook

Wall Street continues to ignore the political intrigue, yielding a ‘Buy’ rating based upon 39 ‘Buy’, 4 ‘Overweight’, 6 ‘Hold’, and 1 ‘Sell’ recommendation. Price targets currently range from a low of $225 to a Street-high $460 while the stock is set to open Monday’s session $70 below the median $395 target. This low placement suggests Main Street is taking the political controversy more seriously than the denizens of lower Manhattan.

Facebook rallied above 2018 resistance near 200 in May 2020 and entered a strong uptrend that topped out at 303.60 in September. The subsequent correction found support at the 200-day moving average in January 2021, yielding a bounce that mounted the 2020 peak in March. It posted an all-time high at 329.82 in April and turned lower once again, dropping about halfway down to breakout support. A test at that level should offer a low risk buying opportunity unless another round of political conflict hits the 24-hour news cycle.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Apple, Facebook Drive Nasdaq Futures Higher as Earnings Roll In

By Shivani Kumaresan

Apple Inc gained 2.7% in premarket trading after posting sales and profits ahead of Wall Street estimates, led by much stronger-than-expected iPhone and Mac sales.

Facebook Inc jumped 7.3% on beating analysts’ expectations for both quarterly revenue and profit, helped by a surge in digital ad spending during the pandemic, along with higher ad prices.

Other megacap companies, including Microsoft Corp, Alphabet Inc and Netflix Inc, rose between 0.2% and 1.1%.

Official data is likely to show that the number of Americans filing new claims for jobless benefits rose last week, while the Commerce Department is expected to report a 6.1% rise in first-quarter GDP.

More earnings reports from Dow components rolled in, with Caterpillar Inc rising 2.8% after the heavy equipment maker reported a rise in adjusted first-quarter profit. Drugmaker Merck & Co Inc, however, slid 3.2% on posting a 1.2% fall in quarterly profit.

Global shares extended gains after the Federal Reserve said it was too early to consider rolling back emergency support for the economy, and U.S. President Joe Biden proposed a $1.8 trillion stimulus package.

At the conclusion of the U.S. central bank’s latest policy meeting on Wednesday, Fed Chair Jerome Powell acknowledged the economy’s growth, but said there was not yet enough evidence of “substantial further progress” toward recovery to warrant a change in policy.

At 6:44 a.m. ET, Dow e-minis were up 177 points, or 0.52%, S&P 500 e-minis were up 30.25 points, or 0.72%, and Nasdaq 100 e-minis were up 138.75 points, or 1%.

Shares of electric vehicles companies, including Tesla Inc, Nikola Corp, rose 1.1% and 2.6%, respectively, as sales picked up speed in the first quarter, according to the International Energy Agency.

Amazon.com Inc, Twitter Inc, Mastercard Inc and Gilead Sciences Inc are also expected to report first-quarter earnings later in the day.

(Reporting by Shivani Kumaresan and Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty)

Why Shares Of Alphabet Are Up By 5% Today?

Alphabet Video 28.04.21.

Alphabet Reported Strong Q1 2021 Results

Shares of Google’s parent company Alphabet gained strong upside momentum after the company released its first-quarter results. Alphabet reported revenue of $55.3 billion and earnings of $26.29 per share, beating analyst estimates on both earnings and revenue.

The company stated that strong revenues reflected “elevated consumer activity online and broad based growth in advertiser revenue”. Alphabet also noted that Google Cloud was growing at a robust pace and recorded revenues of $4 billion. It should be noted that all segments showed strong growth.

The company has also announced that its Board of Directors authorized a share buyback of up to $50 billion. This announcement served as an additional bullish catalyst for Alphabet shares.

What’s Next For Alphabet?

Alphabet has clearly benefited from trends that were accelerated by coronavirus pandemic, and its first-quarter results reflect its strong position.

Alphabet managed to grow its revenue by 34% on a year-over-year basis, which is remarkable for a company of its size. Importantly, all segments showed growth, although Google Search remained the key contributor to the company’s performance.

It remains to be seen whether Alphabet will continue to grow at a fast pace at a time when people around the world are expected to move closer to their normal lives thanks to mass vaccination programs. Analysts expect that the company will report earnings of $81.92 per share in 2022, so the stock is trading at a forward P/E of less than 30 which looks reasonable for a company with dominant market position and strong growth.

At this point, the main risks for Alphabet lie in the regulatory area. Lawmakers from various countries have expressed their concerns about the dominance and enormous power of Big Tech companies, and regulatory pressure is expected to increase over the upcoming years. However, the market should easily shrug off any worries about increased regulation if Alphabet shows steady growth.

For a look at all of today’s economic events, check out our economic calendar.

Google Battles Landmark UK Class Action Over Alleged IPhone Tracking

By Kirstin Ridley

Antony White, a lawyer for Google, told the first day of a two-day hearing that the maiden, U.S.-style data protection lawsuit could only seek redress under English laws if any data breach had led to claimants suffering damage.

“It is not my case that loss of personal data may not have serious consequences, but it may not always do so in a way that attracts compensation,” he said, adding that any uniform award would also fail to take into account differing phone usage.

Richard Lloyd, a former director at consumer rights group Which?, is leading the claim that seeks to extend Britain’s fledgling class action regime – and multi-billion pound data protection claims against tech giants, such as Facebook, TikTok and YouTube, rest on the judgment.

Lloyd has previously estimated that damages could run to 750 pounds per iPhone user, potentially bringing damages to more than 3 billion pounds ($4.2 billion) if any future trial succeeds.

The case, brought on behalf of more than four million Apple iPhone users, hinges on whether Google breached its duties as a data controller by clandestinely collecting browser-generated data and then offering it to advertisers in 2011 and 2012 – and whether such a class action can proceed in Britain.

Experts say the case is “hugely significant” and warn businesses that harvest and use troves of personal data for commercial gain to consider whether they are acting fairly and transparently.

“If the judgment goes in favour of the claimants, we will see the floodgates open to a tsunami of representative data class actions in the UK,” said Julian Copeman, a partner at Herbert Smith Freehills.

Critics of “opt out” class actions, which automatically bind a defined group into a lawsuit unless individuals opt out, say they can lead to claims without merit and lush profits for litigators and their funders.

Proponents say they allow easier access to justice, especially when individual claims are too small to pursue individually, and that alternative “opt in” lawsuits, where every claimant signs up, are costly and time-consuming.

The Confederation of British Industry, a trade body, says such cases could be “highly detrimental”, noting the risk of ruinous damages awards could prompt settlements regardless of the merits of a case.

(Reporting by Kirstin Ridley; editing by Barbara Lewis)

Stocks Mixed Ahead Of Fed Interest Rate Decision

All Eyes On The Fed

S&P 500 futures are swinging between gains and losses in premarket trading as traders wait for Fed Interest Rate Decision.

The rate is expected to stay unchanged, and the market will focus on Fed’s commentary. The key intrigue is whether Fed will signal that it is starting to think about reducing asset purchases.

The Fed has been consistently dovish, and it does not look ready for a change of tone despite the robust economic rebound. However, bond traders are a bit nervous ahead of Fed Interest Rate Decision, and Treasury yields are moving higher.

Today, the yield of 10-year Treasuries made an attempt to settle above 1.65% before pulling back below 1.64%. If Treasury yields continue to move higher, tech stocks may find themselves under some pressure.

Alphabet Shares Gain Ground In Premarket Trading While Microsoft Stock Declines

Alphabet has recently reported its quarterly results, easily beating analyst expectations on both earnings and revenue. The company’s board approved $50 billion in stock repurchases, and Alphabet’s shares are up by more than 4% in premarket trading.

Meanwhile, Microsoft‘s quarterly report did not provide support to the stock which is down by more than 2% in premarket trading. Microsoft has also beaten analyst expectations on both earnings and revenue, but it looks that traders had higher expectations.

The mixed reaction to Big Tech reports has clearly contributed to lack of direction in premarket trading for S&P 500 futures.

WTI Oil Continues To Move Higher As OPEC+ Confirms Previous Deal

WTI oil is currently trying to settle above $63.50 as traders cheer OPEC+ decision to keep the previous production plan intact.

OPEC+ noted that Saudi Arabia will gradually increase its production in May, June and July in order to adjust its production to levels seen before its voluntary supply adjustment of 1 million barrels per day (bpd).

Other OPEC+ members will also gradually increase production according to previous plans, so OPEC+ should ultimately increase production by 2 million bpd. The gradual return of supply serves as a bullish catalyst for the oil market, which continues to ignore the challenging situation with coronavirus in India.

For a look at all of today’s economic events, check out our economic calendar.

Google Sales Top Estimates on Ad Surge; Alphabet Plans $50 Billion Buyback

(Corrects amount of 2019 buyback to $25 billion instead of $25 million, paragraph 10)

By Paresh Dave and Subrat Patnaik

The results are the first sign that Google services may hold on to gains in usage brought on by lockdowns and other pandemic restrictions that forced people to shop and communicate online over the last year.

Alphabet shares were up about 4.7% at $2,398.61 in extended trading.

The results “reflect elevated consumer activity online and broad based growth in advertiser revenue,” Alphabet Chief Financial Officer Ruth Porat said in a statement.

Google ad sales surged 32% in the first quarter compared with a year ago, above expectations of analysts tracked by Refinitiv. Cloud sales increased 45.7%, in line with estimates.

About 17% of people in the United States, Alphabet’s top region by revenue, were fully vaccinated against COVID-19 by the end of the first quarter. Activities including in-person dining resumed in big cities in March, and security screenings at U.S. airports had their busiest day in a year.

The changes coincided with Alphabet’s overall sales rising 34% to $55.3 billion, above analysts’ estimate of $51.7 billion, or 26% growth over last year’s first quarter, when ad sales fell significantly in the final couple of weeks.

Alphabet’s quarterly profit rose 162% to $17.9 billion, or $26.29 per share, beating estimates of $15.88 per share. Earnings benefited from unrealized gains from venture capital investments and slower depreciation of some data center equipment.

The company’s operating margin rose to 30% for the first time since incorporating as Alphabet in 2015 even as its costs began to pick up again. Alphabet in 2020 suffered its slowest sales growth in 11 years but posted record profit and upped its cash hoard by $17 billion after slowing hiring and construction.

The share repurchase authorization by Alphabet’s board follows a $25 billion buyback program announced in 2019. Jefferies analyst Brent Thill estimated Alphabet now has $56 billion left to spend buying its shares.

AD REBOUND

It was not immediately clear which industries powered Google’s growth in ad and cloud sales.

Increased ad buying by travel and entertainment companies would be a positive sign as hotel booking services and movie studios are among Google’s biggest spenders.

Google’s ad business, the global market leader as measured in sales, accounted for 81% of the quarterly revenue compared with 82% a year ago.

The operating loss for Google Cloud, a distant rival to the cloud businesses of Amazon.com Inc and Microsoft Corp, narrowed 44% to $974 million in the first quarter.

Google’s newer consumer subscription businesses, such as an ad-free version of YouTube, also could capture analysts’ attention.

Alphabet shares have surged 80% in the last year, 184th among companies in the S&P 500 index.

Privacy and antitrust lawsuits against Google that could result in changes to its ad operations have remained a concern for investors, according to analysts. But resolution remains distant, with one key trial not expected until 2023.

The latest dispute emerged on Monday when streaming TV technology company Roku Inc accused Google of engaging in anticompetitive behavior to benefit its YouTube and hardware businesses.

Discussions about changing U.S. and European laws to impose new oversight on Google, Facebook Inc and other companies, especially regarding privacy and artificial intelligence, have lagged as legislators have been distracted by the pandemic.

Shares of Facebook, which had been up 62% during the last year entering Tuesday, rose 1.7% after hours. Shares of Amazon, another big competitor in advertising, rose 0.2% after Alphabet’s results and had been up 44% over the last year.

(Reporting by Subrat Patnaik in Bengaluru and Paresh Dave in Oakland, Calif.; Editing by Devika Syamnath and Matthew Lewis)

Earnings to Watch Next Week: Tesla, Alphabet, Microsoft, Facebook, Apple and Amazon.com in Focus

Earnings Calendar For The Week Of April 26

Monday (April 26)

IN THE SPOTLIGHT: TESLA

The California-based electric vehicle and clean energy company Tesla is expected to report its first-quarter earnings of $0.79 per share, which represents year-over-year growth of over 240% from $0.23 per share seen in the same quarter a year ago.

The high-performance electric vehicle manufacturer’s revenue would grow over 70% to $10.2 billion. The electric vehicle producer has beaten earnings per share and revenue estimates by over 60% of the time in the last two years.

“Updating the model for the 1Q deliveries of 184,800 which were over 20% above our forecast. We also made adjustments to our volume forecasts for the remainder of the year to account for the strong start while allowing for potential supply constraints and other factors. The net result is we raise our FY21 delivery forecast by 3% to 809k units,” noted Adam Jonas, equity analyst at Morgan Stanley.

“We note our FY volume is modestly below consensus as we allow for a ‘margin of safety’ given highly fluid supply chain issues impacting the industry. Our forward year volume forecast increases very slightly (approx. 1%) to 1.1mm units. This impact, along with some other minor adjustments to the model lifts our target to $900 from $880 previously. We do not change our bull or bear case valuations at this time.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE APRIL 26

Ticker Company EPS Forecast
CBU Community Bank System $0.81
BOH Bank of Hawaii $1.18
DORM Dorman Products $1.02
FBP First Bancorp FBP $0.24
PHG Koninklijke Philips $0.29
OTIS Otis Worldwide Corp $0.62
CHKP Check Point Software Technologies $1.49
LII Lennox International $1.29
ACI AltaGas Canada $0.50
CAJ Canon $0.24
TSLA Tesla $0.79
RRC Range Resources $0.27
HTLF Heartland Financial USA $1.14
OMF OneMain Holdings $2.04
AXTA Axalta Coating Systems $0.42
AMKR Amkor Technology $0.41
TNET TriNet $1.32
SSD Simpson Manufacturing $0.92
PCH Potlatch $1.71
WRI Weingarten Realty Investors $0.41
CATY Cathay General Bancorp $0.78
IBTX Independent Bank $1.30
JJSF J&J Snack Foods $0.12
AIN Albany International $0.62
CNI Canadian National Railway USA $0.99
NXPI NXP Semiconductors $2.21
SBAC SBA Communications $2.45
AMP Ameriprise Financial $4.73
ARE Alexandria Real Estate Equities $1.85
SSNC SS&C Technologies $1.10
SUI Sun Communities $1.16
BRO Brown & Brown $0.56
PKG Packaging Of America $1.47
UHS Universal Health Services $2.15
MKSI MKS Instruments $2.17
AGNC American Capital Agency $0.64
CDNS Cadence Design Systems $0.74
MASI Masimo $0.88
RMBS Rambus $0.28
WWD Woodward $0.80
SANM Sanmina $0.82
TOP Topdanmark A/S kr5.74
KOF Coca Cola Femsa Sab De Cv $13.82
BAYRY Bayer AG PK $0.77
FIX Comfort Systems USA $0.56
SCCO Southern Copper $0.85
AMG Affiliated Managers $4.26
TV Grupo Televisa Sab $0.10
EGOV NIC $0.23
TOWN Townebank $0.65

Tuesday (April 27)

IN THE SPOTLIGHT: ALPHABET, MICROSOFT

ALPHABET: The parent of Google and the world’s largest search engine that dominates internet search activity globally is expected to report its first-quarter earnings of $15.45 per share, which represents year-over-year growth of about 57% from $9.87 per share seen in the same quarter a year ago.

The Mountain View, California-based internet giant would post revenue growth of more than 25% to around $42.2 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 25% in the last four quarters.

Alphabet’s better-than-expected results, which will be announced on Tuesday, April 27, would help the stock hit new all-time highs. Alphabet shares surged more than 30% so far this year. On Friday, the stock closed 2.1% higher at $2,299.93 – close to the record high of $2,304.09.

GOOGL still favorable set up after strong YTD gains. GOOGL has outperformed major indices YTD as investor sentiment turned positive. Our checks have been broadly positive, indicating accelerating momentum in the ad business and sustained strength in Cloud,” noted Brent Thill, equity analyst at Jefferies.

GOOGL remains a top large-cap pick as we believe it should benefit in 2021 from ad spend recovery, pent-up demand for Google Cloud, and call options on Waymo and other non-advertising initiatives.”

MICROSOFT: The Redmond, Washington-based global technology giant would report its fiscal third-quarter earnings of $1.76 per share, which represents year-over-year growth of over 25% from $1.40 per share seen in the same quarter a year ago. The world’s largest software maker’s revenue would rise over 17% to around $41 billion, up from the $35.02 billion a year earlier.

“An improving spending environment drives several sources of potential upside to Q3, most prominently around the hybrid cloud engine (Azure + Server Products) and Windows OEM. Strong positioning for multiple secular trends and an attractive valuation make MSFT a Top Pick in Software,” noted Keith Weiss, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE APRIL 27

Ticker Company EPS Forecast
PCAR PACCAR $1.29
ENTG Entegris $0.72
NVS Novartis $1.57
CROX Crocs $0.88
MMM 3M $2.25
MSCI Msci $2.29
JBLU JetBlue Airways -$1.68
PII Polaris Industries $1.54
GLW Corning $0.42
HAS Hasbro $0.66
AWI Armstrong World Industries $0.96
UBS UBS Group $0.52
ABB ABB $0.28
BP BP $0.43
UPS United Parcel Service $1.63
ST Sensata Technologies $0.74
CNC Centene $1.65
SYF Synchrony Financial $1.50
IVZ Invesco $0.62
TRU TransUnion $0.80
SCL Stepan $1.43
FELE Franklin Electric $0.39
RTX Raytheon Technologies Corp $0.88
ABG Asbury Automotive $3.58
LECO Lincoln Electric $1.18
ROP Roper Industries $3.32
SHW Sherwin-Williams $1.65
DTE DTE Energy $2.09
FISV Fiserv $1.13
MMC Marsh & McLennan Companies $1.70
GE General Electric $0.02
WM Waste Management $1.00
CEQP Crestwood Equity Partners $0.34
LLY Eli Lilly $2.12
ADM Archer-Daniels Midland $1.00
ECL Ecolab $0.82
PHM PulteGroup $1.19
HUBB Hubbell $1.67
PPBI Pacific Premier Bancorp $0.63
SSTK Shutterstock $0.70
UMBF UMB Financial $1.47
GPK Graphic Packaging $0.25
PSB PS Business Parks $1.67
RNST Renasant $0.63
CHE Chemed $4.20
MANH Manhattan Associates $0.32
USNA USANA Health Sciences $1.58
TXN Texas Instruments $1.56
SYK Stryker $1.98
MDLZ Mondelez International $0.69
MXIM Maxim Integrated Products $0.75
COF Capital One Financial $4.17
TER Teradyne $1.04
PFG Principal Financial $1.35
APAM Artisan Partners Asset Management $1.10
CALX Calix $0.20
VALE Vale $1.01
MATX Matson $1.86
AMGN Amgen $4.00
EIX Edison International $0.67
ENPH Enphase Energy $0.41
SBUX Starbucks $0.52
ATRC AtriCure -$0.41
AMD Advanced Micro Devices $0.44
TRMK Trustmark $0.61
EGP EastGroup Properties $1.39
WSBC WesBanco $0.70
ROIC Retail Opportunity Investments $0.24
OKE ONEOK $0.77
IEX IDEX $1.41
V Visa $1.27
NOV National Oilwell Varco -$0.23
CSGP CoStar $2.40
OLN Olin $1.34
MSFT Microsoft $1.76
BYD Boyd Gaming $0.44
ESS Essex Property $3.04
EQR Equity Residential $0.68
TX Ternium $2.29
EHC Encompass Health Corp $0.80
GOOGL Alphabet $15.45
QTS QTS Realty $0.65
BXP Boston Properties $1.55
UDR UDR $0.48
FTI FMC Technologies -$0.08
GOOG Alphabet $15.45
CHRW C.H. Robinson Worldwide $0.97
FFIV F5 Networks $2.39
FEYE FireEye $0.07
CB Chubb $2.45
TENB Tenable Holdings Inc $0.06
ILMN Illumina $1.36
NAVI Navient $0.78
HIW Highwoods Properties $0.87
AAT American Assets $0.35
JNPR Juniper Networks $0.25
ACGL Arch Capital $0.50
FIBK First Interstate BancSystem $0.73
NCR NCR $0.47
TKC Turkcell $0.17
AJRD Aerojet Rocketdyne $0.46
ZBRA Zebra Technologies $4.39
MKL Markel $12.29
AMX America Movil Sab De Cv Amx $0.33
MSTR Microstrategy -$0.19
VIST Vista Oil Gas $0.07
IBA Industrias Bachoco Sab De Cv $1.54
BSBR Banco Santander Brasil $0.19
SAN Banco Santander $0.11
OMAB Grupo Aeroportuario Del Centro Nort $0.37
NMR Nomura -$0.21
IRBT Irobot $0.06
HSBC HSBC $0.60
ATLCY Atlas Copco ADR $0.40

Wednesday (April 28)

IN THE SPOTLIGHT: FACEBOOK, APPLE

FACEBOOK: The world’s largest online social network is expected to report its first-quarter earnings of $2.35 per share, which represents year-over-year growth of over 37% from $1.71 per share seen in the same quarter a year ago.

The Menlo Park, California-based social media conglomerate would post revenue growth of over 33% to around $23.6 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 22% in the last four quarters.

“Monetization Potential: We are positive on FB’s monetization roll-out of Instagram as well as FB’s ability to continue to innovate and improve its monetization (Canvas Ads, Dynamic Ads, video). Combined with the high and growing engagement we see monetization upside going forward,” noted Brian Nowak, equity analyst at Morgan Stanley.

“Investing from Position of Strength to Drive Faster Long-Term Growth: We are modeling ~28% GAAP opex (excl. one-time items) growth in 2021, implying an incremental ~$15bn in opex. Our base case model implies opex per employee moderates in ’21 while FB hiring remains roughly flat on an absolute basis. We believe FB will grow EPS at a ~29% CAGR (2019-2022).”

APPLE: The consumer electronics giant would post its second-quarter earnings of $0.99 per share, which represents year-over-year growth of over 54% from $0.64 per share seen in the same quarter a year ago. The iPhone manufacturer would post revenue growth of over 33% to around $77.6 billion.

“We expect the strength of Apple’s broad portfolio of products & services to help re-rate AAPL shares, amplified by today’s product launch event. We forecast Product growth of 43% Y/Y and Services growth of 19% putting us at $80.2B in revs and $1.03 in EPS for the March Q, 4-5% ahead of consensus,” noted Katy Huberty, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE APRIL 28

Ticker Company EPS Forecast
SHOO Steven Madden $0.19
IPG Interpublic Of Companies $0.16
SNY Sanofi $0.83
GD General Dynamics $2.31
APH Amphenol $0.44
SIRI Sirius XM $0.06
LIVN LivaNova PLC $0.15
SLAB Silicon Laboratories $0.76
HUM Humana $7.21
AVY Avery Dennison $2.01
OSK Oshkosh $1.14
NYCB New York Community Bancorp $0.27
DAN Dana $0.46
MAS Masco $0.66
TEVA Teva Pharmaceutical Industries $0.58
ETR Entergy $1.24
BA Boeing -$1.17
EVR Evercore Partners $2.63
ROL Rollins $0.11
YUM Yum Brands $0.85
PAG Penske Automotive $1.81
BCO Brinks $0.71
R Ryder System $0.58
CIT CIT $0.98
TDY Teledyne Technologies $2.59
TKR Timken $1.20
OC Owens Corning $1.42
SAIA Saia $1.37
SWK Stanley Black & Decker $2.56
MCO Moody’s $2.80
PB Prosperity Bancshares $1.38
BSX Boston Scientific $0.30
GIB CGI Group USA $1.03
CME CME $1.75
ROK Rockwell Automation $2.15
SPOT Spotify -$0.57
GRMN Garmin $0.88
SIX Swiss Exchange -$1.29
IART Integra LifeSciences $0.56
BPOP Popular, Inc. $1.91
BXMT Blackstone Mortgage $0.61
AER AerCap $1.13
LFUS Littelfuse $1.92
VRT Veritas Pharma $0.12
SLGN Silgan $0.71
HELE Helen Of Troy $1.56
HES Hess $0.36
ADP ADP $1.82
NSC Norfolk Southern $2.55
SC Santander Consumer USA $1.45
RJF Raymond James Financial $2.09
PPC Pilgrim’s Pride $0.27
PSA Public Storage $2.70
FORM FormFactor $0.39
PTC PTC $0.72
EQIX Equinix $6.63
VVV Valvoline Inc $0.37
ESI Itt Educational Services $0.32
MXL MaxLinear $0.50
CLR Continental Resources $0.30
BSMX Santander Mexico Fincl Gp Sab Decv $0.17
PDM Piedmont Office Realty $0.47
WCN Waste Connections $0.67
AVB AvalonBay Communities $1.94
PGRE Paramount Group $0.21
AGI Alamos Gold $0.13
EBAY eBay $1.07
MAA Mid-America Apartment Communities $1.61
OI Owens-Illinois $0.28
QCOM Qualcomm $1.67
ALGN Align Technology $2.00
DRE Duke Realty $0.39
NGVT Ingevity Corp $1.07
AZPN Aspen Technology $1.16
NLY Annaly Capital Management $0.26
FB Facebook $2.35
MC Moelis & Company $0.87
NOVA Nova Mentis Life Science Corp -$0.34
MGM MGM Resorts International -$0.86
MTH Meritage Homes $2.52
GRUB GrubHub $0.03
CNO CNO Financial Group $0.50
WERN Werner $0.63
CONE CyrusOne $0.98
AR Antero Resources $0.39
AMED Amedisys $1.43
KRC Kilroy Realty $0.99
EXR Extra Space Storage $1.48
AFL Aflac $1.20
AVT Avnet $0.56
BLKB Blackbaud $0.63
WELL Welltower Inc $0.75
TROX Tronox $0.27
AUY Yamana Gold USA $0.07
AM Antero Midstream Partners $0.22
CNMD CONMED $0.43
CHX ChampionX Corp $0.05
RE Everest Re $4.55
HOLX Hologic $2.62
CDE CoEUR Mining $0.08
MOH Molina Healthcare $3.78
TYL Tyler Technologies $1.31
AXS Axis Capital $0.65
SIGI Selective $0.97
NOW ServiceNow $1.34
CAKE Cheesecake Factory -$0.15
MUSA Murphy USA $0.83
MTDR Matador Resources $0.37
ALSN Allison Transmission $0.90
RNR Renaissancere $0.74
PEGA Pegasystems $0.02
CCS Century Communities $1.52
UCTT Ultra Clean $0.82
TTEK Tetra Tech $0.75
CINF Cincinnati Financial $1.27
F Ford Motor $0.15
ASGN On Assignment $1.10
AAPL Apple $0.99
WH Wyndham Hotels & Resorts Inc $0.25
ORLY O’Reilly Automotive $5.27
ISBC Investors Bancorp $0.29
LOGI Logitech Internationalusa $0.96
SID Companhia Siderurgica Nacional $0.28
YMZBY Yamazaki Baking ADR $1.17
GSK Glaxosmithkline $0.59
LPL Lg Display $0.29
TS Tenaris $0.06
TOTDY Toto $0.51
UMC United Microelectronics $0.10
ASX Advanced Semiconductor Engineering $0.12
DB Deutsche Bank $0.49
FNF Fidelity National Financial $1.28
WWW Wolverine World Wide $0.38
DISCA Discovery Communications $0.66
DISCB Discovery Communications Discb $0.66
DISCK Discovery Communications Disck $0.66
EAT Brinker International $0.79
FCNCA First Citizens Bancshares $12.11
PAC Grupo Aeroportuario Del Pacifico $0.64

Thursday (April 29)

IN THE SPOTLIGHT: AMAZON.COM

The eCommerce leader for physical and digital merchandise is expected to report its first-quarter earnings of $9.98 per share, which represents year-over-year growth of about 100% from $5.01 per share seen in the same quarter a year ago.

The Seattle, Washington-based multinational technology giant would post revenue growth of about 40% to around $105.1 billion. It is worth noting that the company, on average, has delivered an earnings surprise of about 187% in the last four quarters.

“We expect strong 1Q21 results with revenue and Op Inc. 3% & 11% above consensus estimates. Key rev. drivers include eCommerce, AWS, Adv., & Sub. rev. Our 1Q21 Op Inc. est. is driven by AWS & Adv., offset partially by COVID-19 costs. 2Q21 revenue guide is key, we expect AMZN eCommerce growth of +15% y/y despite tough comps. We remain bullish on’21 Op margin expansion, our est. is 17% above consensus,” noted John Blackledge, equity analyst at Cowen.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE APRIL 29

Ticker Company EPS Forecast
RDSA Royal Dutch Shell £0.83
AGIO Agios Pharmaceuticals -$1.23
STM Stmicroelectronics $0.39
JHG Janus Henderson Group PLC $0.82
THRM Gentherm $0.58
FBC Flagstar Bancorp $2.65
CAT Caterpillar $1.93
TFX Teleflex $2.44
CNX Consol Energy $0.28
CBRE CBRE Group Inc $0.70
AMT American Tower $2.32
BLMN Bloomin’ Brands $0.34
TREE LendingTree -$0.21
TAP Molson Coors Brewing -$0.12
MO Altria $1.04
SAH Sonic Automotive $0.94
TROW T. Rowe Price $2.90
VC Visteon $0.32
TW Towers Watson $0.43
HSY Hershey $1.82
CCOI Cogent Communications $0.18
KEX Kirby $0.14
SPGI S&P Global Inc $3.13
BAX Baxter International $0.64
SO Southern Co. $0.83
SWI Solarwinds $0.19
BGCP BGC Partners $0.19
COHU Cohu $0.79
CWT California Water Service -$0.06
CFR Cullen/Frost Bankers $1.42
LH Laboratory Of America $7.34
TMHC Taylor Morrison Home $0.76
GPI Group 1 Automotive $4.39
NEM Newmont Mining $0.80
FMX Fomento Economico Mexicano Sab $8.67
AOS A.O. Smith $0.56
WAB Westinghouse Air Brake Technologies $0.85
WEX WEX $1.58
COLB Columbia Banking System $0.63
WLTW Willis $3.26
PATK Patrick Industries $1.32
VLY Valley National Bancorp $0.29
MMP Magellan Midstream Partners $0.87
KHC Kraft Heinz $0.60
IP International Paper $0.59
BC Brunswick $1.45
KIM Kimco Realty $0.30
KDP Keurig Dr Pepper $0.31
TMO Thermo Fisher Scientific $6.69
EEFT Euronet Worldwide $0.35
MTSI MACOM Technology Solutions $0.47
EXLS ExlService $0.99
AIT Applied Industrial Technologies $0.98
COR CoreSite Realty $1.33
STRA Strayer Education $1.49
IDA IdaCorp $0.83
GNRC Generac $1.87
ALNY Alnylam Pharmaceuticals -$1.73
XEL Xcel Energy $0.61
AIMC Altra Industrial Motion $0.76
TPX Tempur Sealy International $0.51
OSTK Overstock $0.07
NOC Northrop Grumman $5.48
FCN FTI Consulting $1.18
MDC MDC $1.37
SYNH Syneos Health Inc $0.74
BMY Bristol-Myers Squibb $1.83
DPZ Dominos Pizza $2.94
ATI Allegheny Technologies -$0.24
CMCSA Comcast $0.59
CG Carlyle $0.54
MRK Merck & Co $1.62
PCG PG&E $0.27
MA Mastercard $1.57
MCD McDonalds $1.81
LKQ LKQ $0.63
CMS CMS Energy Corporation $1.19
AGCO AGCO $1.11
ICE Intercontinental Exchange $1.30
PH Parker-Hannifin $3.75
CFX Colfax $0.39
BCE BCE (USA) $0.58
EME EMCOR $1.17
ABMD Abiomed $1.10
ERJ Embraer -$0.33
TXT Textron $0.47
CARR Carrier Global Corp $0.38
PRFT Perficient $0.68
KBR KBR $0.46
CHD Church Dwight $0.80
WST West Pharmaceutical Services $1.42
ADS Alliance Data Systems $3.23
CTXS Citrix Systems $1.42
NVT nVent Electric PLC $0.35
CUZ Cousins Properties $0.70
RMD ResMed $1.22
CUBE CubeSmart $0.45
TXRH Texas Roadhouse $0.59
GLPI Gaming And Leisure Properties $0.83
KLAC KLA-Tencor $3.59
OFC Orate Office Properties $0.55
FIVN Five9 $0.13
TEX Terex $0.22
X United States Steel $0.91
CRUS Cirrus Logic $0.69
SWKS Skyworks Solutions $2.34
WDC Western Digital $0.67
SWN Southwestern Energy $0.25
ACHC Acadia Healthcare $0.45
DLR Digital Realty $1.57
BVN Compania De Minas Buenaventura $0.11
GILD Gilead Sciences $2.02
AEM Agnico Eagle Mines USA $0.57
COLM Columbia Sportswear $0.33
TWTR Twitter $0.14
AJG Arthur J. Gallagher $1.83
FHI Federated Hermes Inc $0.77
PEB Pebblebrook Hotel -$0.44
CWST Casella Waste Systems $0.04
CXP Columbia Property $0.33
CPT Camden Property $1.23
COG Cabot Oil Gas $0.33
SGEN Seattle Genetics -$0.59
ATR AptarGroup $0.90
LPLA LPL Financial $1.58
EVTC Evertec $0.53
EXPO Exponent $0.43
DXCM Dexcom $0.31
ZEN Zendesk $0.12
PFPT Proofpoint $0.39
THG Hanover $0.75
FSLR First Solar $1.00
FBHS Fortune Brands Home Security $1.04
FWRD Forward Air $0.56
MMSI Merit Medical Systems $0.37
SPSC SPS Commerce $0.38
INT World Fuel Services $0.28
SKYW SkyWest $0.89
ERIE Erie Indemnity $1.41
POWI Power Integrations $0.55
ROG Rogers $1.79
OMCL Omnicell $0.67
BIO Bio-Rad Laboratories $2.50
HIG Hartford Financial Services $0.75
EMN Eastman Chemical $1.91
HP Helmerich & Payne -$0.61
EBS Emergent BioSolutions $1.55
PACB Pacific Biosciences Of California -$0.45
AMZN Amazon $9.98
FTNT Fortinet $0.74
NATI National Instruments $0.31
ALGT Allegiant Travel -$2.59
FTV Fortive Corp $0.60
MHK Mohawk Industries $2.80
BMRN BioMarin Pharmaceutical $0.27
VRTX Vertex Pharmaceuticals $2.76
MGNX MacroGenics -$0.51
KMPR Kemper $1.35
MDRX Allscripts Healthcare Solutions $0.15
COP ConocoPhillips $0.60
SHEN Shenandoah Telecommunications $1.01
USM United States Cellular $0.43
MTZ MasTec $0.77
GT Goodyear Tire & Rubber $0.08
TDS Telephone Data Systems $0.44
ETN Eaton $1.25
REGI Renewable Energy $0.20
PRAH PRA Health Sciences Inc $1.34
HUBG HUB $0.46
TPR Tapestry Inc $0.30
PRGO Perrigo $0.56
BLDR Builders Firstsource $0.81
BBD Banco Bradesco $0.10
TPL Texas Pacific Land $5.79
ASEKY Aisin Seiki Co $0.88
NLSN Nielsen $0.32
ARW Arrow Electronics $2.27
CLGX CoreLogic $0.97
TFSL Tfs Financial $0.07
UBSI United Bankshares $0.74
GRA W.R. Grace $0.73
PTCT PTC Therapeutics -$1.59
INSM Insmed -$1.02
TOELY Tokyo Electron Ltd PK $1.25
BBVA Banco Bilbaoizcaya Argentaria $0.15
GOL Gol Linhas Aereas Inteligentes -$0.91
SRCL Stericycle $0.59
AUOTY AU Optronics $0.33
CX Cemex Sab De Cv $0.03
PBR Petroleo Brasileiro Petrobras $0.12
TOT Total $0.85
AMRN Amarin -$0.03
TWOU 2U -$0.23
LYG Lloyds Banking $0.07
BEN Franklin Resources $0.74

Friday (April 30)

Ticker Company EPS Forecast
LYB LyondellBasell Industries $2.51
AVNT Avient Corp $0.72
BCPC Balchem $0.80
JCI Johnson Controls $0.49
HOCPY Hoya Corp $0.81
CL Colgate-Palmolive $0.79
BCS Barclays $0.41
AON AON $4.05
HUN Huntsman $0.58
PNM PNM Resources $0.19
XOM Exxon Mobil $0.60
CHTR Charter Communications $4.25
PSX Phillips 66 -$1.28
ITW Illinois Tool Works $1.90
GWW Grainger $4.31
HRC Hill-Rom $1.43
POR Portland General Electric $0.87
BSAC Banco Santander Chile $0.41
ABBV AbbVie $2.81
WY Weyerhaeuser $0.88
WPC W. P. Carey $0.51
SHLX Shell Midstream Partners $0.35
CVX Chevron $0.90
NWL Newell Brands Inc $0.13
MITSY Mitsui & Company $10.53
CLX Clorox $1.47
LAZ Lazard $0.88
LHX L3Harris Technologies Inc $2.96
KMTUY Komatsu $0.32
BNPQY BNP Paribas ADR $0.59
APELY Alps Electric $0.27
ALNPY ANA Holdings ADR -$0.90
PSXP Phillips 66 Partners $0.83
AZN Astrazeneca $0.68

 

Alphabet Could Hit New All-Time High on Strong Q1 Earnings; Target Price $2,461

Alphabet, the parent of Google, the world’s largest search engine that dominates internet search activity globally, is expected to report its first-quarter earnings of $15.54 per share, which represents year-over-year growth of over 57% from $9.87 per share seen in the same quarter a year ago.

The Mountain View, California-based internet giant would post revenue growth of more than 25% to around $42.2 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 25% in the last four quarters.

Alphabet’s better-than-expected results, which will be announced on Tuesday, April 27, would help the stock hit new all-time highs. Alphabet shares surged more than 30% so far this year. At the time of writing, the stock was trading nearly flat at $2,282.8 on Thursday – close to the record high of $2,304.09.

Analyst Comments

GOOGL still favorable set up after strong YTD gains. GOOGL has outperformed major indices YTD as investor sentiment turned positive. Our checks have been broadly positive, indicating accelerating momentum in the ad business and sustained strength in Cloud,” noted Brent Thill, equity analyst at Jefferies.

GOOGL remains a top large-cap pick as we believe it should benefit in 2021 from ad spend recovery, pent-up demand for Google Cloud, and call options on Waymo and other non-advertising initiatives.”

Alphabet Stock Price Forecast

Thirty analysts who offered stock ratings for Alphabet in the last three months forecast the average price in 12 months of $2,461.66 with a high forecast of $2,953.00 and a low forecast of $2,100.00.

The average price target represents a 7.89% increase from the last price of $2,281.60. All of those 30 analysts rated “Buy”, according to Tipranks.

Morgan Stanley gave the base target price of $2,350 with a high of $2,800 under a bull scenario and $1,650 under the worst-case scenario. The firm gave an “Overweight” rating on the internet giant’s stock.

“Google Websites growth is likely to rebound in ’21 as we believe there are several underappreciated products driven by mobile search, strong YouTube contribution, and continued innovation, such as Maps monetization. Continued expense discipline leads to operating leverage and upward revisions on EPS estimates,” noted Brian Nowak, equity analyst at Morgan Stanley.

Several other analysts have also updated their stock outlook. Jefferies raised the target price to $2,700 from $2,400. Alphabet had its price target upped by investment analysts at Mizuho to $2,600 from $2,350. The firm currently has a “buy” rating on the information services provider’s stock.

Moreover, Oppenheimer lifted the target price to $2,350 from $2,250. JP Morgan increased the price target to $2575 from $2390. Cowen and company upped the target price to $2,600 from $2,400.

Check out FX Empire’s earnings calendar

How Might NFLX Share Price React to Q1 Earnings?

Recall that the pandemic prompted a massive front-loading of Netflix subscriptions, as households starved for entertainment amid lockdowns drove the company’s global customer base past the 200 million mark by the end of last year.

For Q1 2021, Netflix has guided for an additional 6 million subscribers, while Wall Street expects that tally to be closer to 6.3 million. That’s still a pretty healthy figure, even though it pales in comparison to the 15.77 million new paying members who signed on during the same period a year ago.

Sauntering subscriber and share price growth

Looking ahead, shareholders appear cognizant that Netflix would find it tough to replicate the growth spurts it experienced last year. The same can be said for its share price.

After surging by 67.1% in 2020, Netflix has only managed a gain of 2.54% so far this year. That’s slower in comparison to the year-to-date performances of:

Netflix has clearly been a laggard within the famed FAANG group, with the streaming company now languishing 5.44% below its record high, set on 20 January 2021, which was also the day after its last quarterly earnings announcement.

From a technical perspective, Netflix’s share prices found support at its 200-day simple moving average (SMA) in March, using it as a platform to launch back above its 50-SMA this month. However, with the bullish momentum in the stock plateauing, while a close above the $555 mark having proved hard to come by since mid-February, Netflix could do with a positive catalyst to catch up with the rest of its peers.

Perhaps that catalyst may arrive at the company’s earnings release later today.

What are markets expecting for Netflix’s Q1 financial results?

Three words: record setting quarter.

Wall Street expects Netflix to post its highest-ever revenue and net profit for a single financial quarter. The top line is expected to breach the $7 billion mark for the first time in the company’s history, thanks to price hikes in the US, Germany, UK and Ireland. Meanwhile, the company’s adjusted net profit is slated to come in at $1.45 billion, and that should translate into an adjusted earnings per share of $3.18.

However, look beyond the historic numbers and the broader industry harbors troubling signs for Netflix.

Streaming wars eroding Netflix’s advantage

According to a report by Parrot Analytics, just over half (50.2%) of the original series that viewers worldwide wanted to watch online over the past three months were by Netflix. While that figure still dwarves second-placed Amazon Prime’s share of 12.2% for the same period (January-March 2021), Netflix’s market share has clearly dropped from the near-65% share it enjoyed some two years ago.

Within the US alone, the decline in Netflix’s market share is even more obvious. According to Bloomberg Intelligence data, Netflix’s share of the US streaming pie has gone from near-total dominance of 96.04% in Q1 2018 to just 44.43% as of Q4 2020.

As the competition for eyeballs intensifies, Netflix is set to find it harder to gain more subscribers.

Netflix not taking things lying down

That doesn’t spell the end of Netflix. This year alone, the world’s largest streaming platform aims to release over 70 movies. The streaming giant earlier this month also announced a deal with Sony, which is reportedly worth over $1 billion. The agreement gives Netflix the rights to exclusively show Sony movies released from 2022 onwards after they’ve completed their theatrical runs.

That should keep their 210 million subscribers (estimated as of end-March) and counting, entertained with popular franchises such as “Jumanji” and “Spider Man” over the coming years, even with the potential prices hikes looming.

Armed with customer loyalty while flexing its pricing power, Netflix still has a lot within its arsenal to withstand the heightened competition for viewers’ attention.

How might Netflix’s share price react after Tuesday’s earnings?

Markets are pricing in a 7.2% move for Netflix’s share price when markets reopen on Wednesday. Although NFLX could go either way, it’s notable that shareholders typically sought to use these announcements as selling opportunities. The stock declined the day after 8 of the past 11 earnings.

Still, a 7.2% move to the upside would set a new record high for Netflix’s share price, while a similar-sized move to the downside could see the stock looking for support around its 200-SMA once more.

How exactly will this NFLX stock react this week? We’ll just have to stay tuned and watch the drama unfold.

Written on 20/04/2021 02:00 GMT by Han Tan, Market Analyst at FXTM

For more information, please visit: FXTM

Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

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Microsoft to Invest $1 Billion in Malaysia to Set up Data Centres – Malaysian PM

The announcement on what would be the U.S. tech giant’s biggest investment in Malaysia comes after the country in February gave conditional approvals for Microsoft, Google, Amazon and state telecoms firm Telekom Malaysia to build and manage hyper-scale data centres and provide cloud services.

It also comes after the country saw foreign direct investments (FDI) plunge by 68% last year, the biggest decline in Southeast Asia.

Malaysia has defended itself as an investment destination, with the finance minister recently saying it was looking at incentives to help attract more FDI.

It has said the investments from these cloud service providers will total between 12 billion ringgit and 15 billion ringgit ($2.91 billion-$3.64 billion) over the next five years.

As part of the Bersama Malaysia initiative, Microsoft will establish its first “datacentre region”, which consists of multiple data centres, in Malaysia to manage data from various countries, Prime Minister Muhyiddin Yassin told an event marking the launch of the programme.

“The upcoming datacenter region will be a game-changer for Malaysia,” Microsoft Executive Vice President Jean-Philippe Courtois said in a statement, adding it will enable the government and businesses to “transform” their operations.

Under the programme, Microsoft will also assist up to a million Malaysians in getting digital skills by the end of 2023.

(Reporting by Liz Lee; Editing by Muralikumar Anantharaman)

Google Impulsive Bullish Breakout Now Looking for Support at Fib Levels

The Alphabet stock (GOOG) made a strong bullish breakout above the triangle pattern. The breakout is taking place in a well established uptrend channel (green lines).

This article reviews whether the uptrend can continue higher or not. We also review key support and resistance levels plus potential targets.

Price Charts and Technical Analysis

Google 14.04.2021 daily chart

The GOOG stock triangle chart pattern completed an ABC (green) within a shallow wave 4 pullback.

Price action bounced at the 38.2% Fibonacci level and has already reached the -27.2% Fibonacci target. What can be expected next?

  1. No divergence pattern is visible so far. This means that the uptrend remains strong and impulsive, which is indicating that bulls remain in control.
  2. The current bullish price swing is part of a larger wave 3 (pink) of wave 3 (purple), which indicates that more upside is likely.
  3. A full uptrend is visible with a clear uptrend channel (green lines) and moving averages aligned with the 21 ema above the 144 ema and above the 233 and 610 emas.
  4. Considering the strong price push away from the 21 ema, it is likely that the Fibonacci levels of the most recent price swing will act as support and cause a bounce (green arrows) if a pullback occurs (orange arrows).
  5. The next targets are located at $2400, $2500, and $2600.

On the 4 hour chart, we can see multiple waves 3 already appear in the recent past. This is indicating a strong uptrend.

  1. Currently price is in a wave 3 (green). Price could continue higher within wave 3.
  2. Eventually now or later, a shallow pullback (orange arrows) could confirm the end of the wave 3 (green) and the start the wave 4 (green).
  3. The Fibonacci levels are expected to act as support for a bounce (green arrows).
  4. A break below the previous tops (green box) could place the current wave outlook on hold (orange circle) or invalidate it (red circle).
  5. A deeper retracement does not mean that the uptrend is over. Price action could still bounce at the 144 ema close.

Google 14.04.2021 daily chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

For a look at all of today’s economic events, check out our economic calendar.

Gold Futures Closed Fractionally Higher on Dollar Weakness and Selling Pressure

Dollar weakness was responsible for all of today’s gains as market participants bid the precious yellow metal lower by actively selling today.

gold april 5

After the three-day holiday weekend, U.S. equities had respectable gains with the Dow Jones Industrial Average gaining just over 393 points, which is a net gain of 1.13% and closed at its highest recorded price level of 33,527.19. The S&P 500 also closed at a new record high after factoring in today’s 58-point gain (+1.44%)., Currently, the index is at 4077.91. Although the NASDAQ composite did not close at a new all-time high it had the largest percentage gains of the three major indices. After factoring in today’s 225-point gain (+1.67), the heavy tech index closed at 13,705.59. A major bounce in the FANG stocks was largely responsible for today’s sizable gains in the NASDAQ with Facebook, Google, Microsoft, and Tesla providing strong tailwinds which led to the 1.67% gain in the NASDAQ.

In both gold futures and spot pricing it was dollar weakness that held any losses to a minimum. The dollar index lost 44 points, or -0.47% and is currently fixed at 92.61. According to the KGX (Kitco Gold Index) spot gold is currently fixed at $1728.10 which is a net decline of $2.20 on the day. On closer inspection market participants bid the precious metal lower by $9.50. Concurrently dollar weakness contributed $7.30 of value resulting in today’s marginal decline of $2.20.

gold HA chart

The cryptocurrencies, specifically Bitcoin futures which trades on the Chicago Mercantile Exchange closed, in essence, unchanged but still remained extremely strong with a single coin valued just shy of $60,000 at $59,525.

While gold futures were able to eke out a fractional gain the same cannot be said for silver. Silver futures basis the most active May contract lost approximately 3 ½ cents in trading today (-0.15%) and is currently fixed at $24.915.

Today Reuters reported that the service sector gauge surged to a record high in March based on strong growth in new orders.

“A measure of U.S. services industry activity surged to a record high in March amid robust growth in new orders, in the latest indication of a roaring economy that is being boosted by increased vaccinations and massive fiscal stimulus.”

The record numbers reported from the Institute of Supply Management (ISM) coupled with Friday’s jobs report which revealed that the United States added 916,000 jobs last month (which is the largest monthly gain since August) clearly underscores that the economy in the United States is truly rebounding as the economic scenario in the United States continues to gain momentum. Considering those factors gold and silver prices held up rather well.

For more information on our service, simply use this link.

Wishing you, as always, good trading and good health,

Gary Wagner

 

Google to Contribute €25 Million to New EU Fund to Fake News

By Foo Yun Chee

The COVID-19 pandemic and the U.S. election last year spurred a massive spike in misinformation, with some blaming social media for not being more proactive in tackling the issue while regulators have indicated they may take action via heavy-handed restrictions.

The European Media and Information Fund, launched by the Calouste Gulbenkian Foundation and the European University Institute last week, aims to enlist researchers, fact-checkers, not-for-profits and other public interest-oriented bodies to help in the fight against fake news.

“While navigating the uncertainty and challenges of the last year, it has proven more important than ever for people to access accurate information, and sort facts from fiction,” Matt Brittin, head of Google’s EMEA Business & Operations, said in a blog post.

The fund has a duration of five years. The European Digital Media Observatory, which is a European Commission project set up last year and whose members include fact checkers and academic researchers, will evaluate and select the projects.

(Reporting by Foo Yun Chee;Editing by Bernadette Baum)

Alphabet Lower Despite Tier One Upgrade

Alphabet Inc. (GOOGL) is trading flat in Tuesday’s pre-market after Stifel raised the firm’s rating to ‘Buy’ with a $2,350 target. The stock may be undervalued, with a price-to-earnings ratio compared to the SP-500 index of 1.3,  or about one standard deviation below the average of 1.4 times. However, it’s also expensive on a long-term basis, averaging 28 times the company’s current P/E ratio, compared to an average of 25 times.

Cyclical Advertising Recovery

The tech giant is highly dependent on search engine advertising revenue, which far exceeds other sources of income. This profit driver is highly cyclical and still in recovery mode following the worldwide lockdown in the first quarter of 2020. High unemployment rates and shuttered businesses continue to weigh on ad growth but the long-term outlook is excellent, given the distribution of effective vaccines in most parts of the world.

Stifel analyst Scott Devitt upgraded Alphabet to ‘Buy’ from ‘Hold’, noting “the bounce in advertising dollar flows has followed online consumer engagement, a quick return and redistribution of advertiser appetite, and digital transaction proliferation. Looking forward, we have increased confidence in Alphabet’s positioning to benefit from category recovery (travel, entertainment, media, auto) and more durable share capture in categories such as retail due to relevance as an internet gatekeeper.”

Wall Street and Technical Outlook

Wall Street consensus is euphoric, with a ‘Buy’ rating based upon 38 ‘Buy’, 5 ‘Overweight’, and 2 ‘Hold’ recommendations. No analysts are recommending that shareholders close positions and move to the sidelines. Price targets currently range from a low of $1,477 to a Street-high $3,000 while the stock is set to open Tuesday’s session about $350 below the median $2,400 target. This low placement suggests investors will remain cautious until the Apr. 27 earnings release.

Alphabet broke out above the February 2020 high at 1,532 in July, tested new support for four months, and took off in a trend advance that posted an all-time high at 2,153 in February 2021. Price action has settled into a trading range with support at 2,000 while three rally attempts have faded above 2,100. These aborted impulses have forced weekly relative strength readings to cross into sell cycles, predicting rangebound action through the first month of the second quarter.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Google to Invest $7 Billion in U.S. Offices, Dcenters This Year

The latest investment includes expansion plans for data centers in Nebraska, South Carolina and Texas, and its offices in Atlanta, D.C., Washington, Chicago and New York.

Google is also spending $1 billion in its home state of California. The move comes at a time when many companies are exiting Silicon Valley after the pandemic triggered a broader shift to remote work, making companies reconsider the state’s higher operational costs and hefty taxes.

The investments would create at least 10,000 new full-time Google jobs, Chief Executive Officer Sundar Pichai said. It currently employs more than 84,000 staff in the country.

In 2020, Google’s services contributed to $426 billion of economic activity in the United States, Pichai added.

(Reporting by Munsif Vengattil in Bengaluru; Editing by Shounak Dasgupta)

Google Shallow Corrective Pattern Indicates More Uptrend Soon

The GOOG stock (Alphabet / Google) has been in a very strong bullish trend. The uptrend is valid since price action made a deep dip in March 2020 because of the Covid 19 pandemic.

Currently price action is showing another pauze. Is the chart ready for a reversal or will the uptrend persist?

Price Charts and Technical Analysis

Google 16.03.2021 daily chart

The GOOG stock is building a consolidation zone at the 21 ema support zone.

The 21 emas have been a strong support ever since price action made a dip one year ago – with the exception of the pullback during September 2020. Let’s review:

  1. The consolidation zone is probably a wave 4 correction (orange).
  2. Waves 4 usually respect shallow Fibonacci levels like the 23.6%, 38.2% or max 50% Fib.
  3. A bullish breakout (green arrows) indicates an immediate uptrend continuation within the wave 5 (grey) within wave 3 (pink).
  4. The next target is located at the round level of $2,250.
  5. A bearish breakout (orange arrow) indicates a deeper pullback. The main target is the 38.2% Fib.
  6. The 38.2% or 50% is likely to act as support and send price action up again (blue arrow) within the larger uptrend.
  7. Only a break below the 61.8% Fib places the uptrend on hold (yellow circle).
  8. Whereas a very deep pullback invalidates the current uptrend (red circle).

On the 4 hour chart, there are two wave variants added.

One shows a wave 1-5 (orange) completed at the recent high within wave 5 (grey) in wave 3 (pink). The other scenario is that price is now in a wave 4’ (orange) pullback.

In any case, price action is expected to either make a bullish breakout (green arrows) or build a pullback towards the Fibonacci levels (orange arrow) and bounce (blue arrow).

Google 16.03.2021 4 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter 

For a look at all of today’s economic events, check out our economic calendar.

Alphabet Rallies After Great Q4 Report

Alphabet Video 03.02.21.

Alphabet Shares Get To All-Time High Levels

Shares of Google’s parent company Alphabet are gaining about 7% in today’s trading session after the release of the fourth-quarter earnings report.

Alphabet reported revenue of $56.89 billion and GAAP earnings of $22.30 per share, easily beating analyst estimates on both earnings and revenue.

The rebound in the advertsing spending provided a boost for Alphabet’s revenue as the activity of businesses and consumers continue to increase. The growth in YouTube ads was especially strong.

Not surprisingly, many analysts rushed to update their price targets for Alphabet shares. The market agrees with the analyst community as Alphabet stock managed to settle above the psychologically important $2000 level and made an attempt to get to the test of the $2100 level.

What’s Next For Alphabet?

The economic recovery will continue in 2021 so the company’s ad business will likely benefit from the improved performance of the world economy as businesses will have more money to spend on ads.

In addition, certain segments of the ad market have the potential for a rapid growth of ad spending once the situation with coronavirus improves. Travel-related spending will surely grow once countries fully open their borders and tourists are able to safely enjoy their trips.

While skeptics may point to the company’s rich valuation at a forward P/E of more than 30, such valuation looks normal for a leading tech company in the current market environment, and Alphabet shares may have more room to run while analysts adjust their earnings estimates to the upside.

There was a lot of talk about the regulatory challenges faced by Big Tech in recent months, but Alphabet’s strong financial performance and solid outlook will likely offset such worries in the near term. Increased regulation is surely a risk for the longer-term, but it remains to be seen whether regulators will be able to move fast enough to have any notable impact on Big Tech stocks, including Alphabet.

For a look at all of today’s economic events, check out our economic calendar.

Sector Market Overview – Communications are Breaking Out and Poised to Trend Higher

The communication sector is heavily weighted by market titans like Alphabet and Facebook, which reported better than expected financial results in January and early February. Alphabet’s earnings showed that ads continue to drive market share. Historically, the communications sector has experienced mixed returns in February, following earnings results. Technically the index looks terrific, as it is breaking out and poised to test higher levels.

Key Earnings Drive Price Action

Alphabet helped drive the sector following better than expected Q4 earnings that surpassed analysts’ expectations. The company reported payments of $22.30 per share, versus expectations that the company would earn $15.90. Revenue came in at $56.90 billion, versus expectations of $53.13 billion. Ads drove revenue. YouTube ads came in at $6.89 billion, versus expectations of $6.11 billion.

Alphabet’s revenue grew 23% annually in the quarter compared to 17%, growth in the same period the prior year. The fourth quarter’s advertising revenue came out to $46.20 billion, up 22% from $37.93 billion in the same quarter last year.

The Seasonals are Mixed

Historically, the communication sector experienced mixed results in February. Over the past 10-years, the sector has increased 60% of the time for an average gain of 1.6%. During the past 5-years, the communications sector has declined 80% of the time for an average loss of 1.9%.

Technical Analysis

The SIXC tests the all-time highs forming a cup and handle pattern, which is a pause that refreshes higher. A close above 368, would signal that the index has broken out. Target resistance is seen near 378, which his the most extensive stretch between the 50-day moving average and the most recent high before the breakout. Support is seen near the 5-day moving average at 358 and then the 50-day moving average at 353.

Short-term momentum is positive as the fast stochastic has generated a crossover buy signal and is racing higher. The fast stochastic is fast approaching overbought territory, printing a reading of 79, just shy of the overbought trigger level of 80. Medium-term momentum is positive as the MACD (moving average convergence divergence) index has recently generated a crossover buy signal. The MACD histogram has also generated a crossover buy signal. The MACD histogram is printing in positive territory with an upward sloping trajectory, which points to higher prices. The relative strength index (RSI) has also rebounded sharply from lower levels, reflecting accelerating positive momentum.

The Bottom Line

The upshot is that the communication sector is poised to breakout. It has formed a cup and handle pattern, which is a pause that refreshes higher. A close above crucial resistance will lead to higher levels. While the seasonality of the returns on the index is mixed during February, Facebook and Alphabet’s strong earnings results point to robust returns in the communication space. Alphabet reported better than expected financial results on February 2 following the closing bell and buoyed the index.  Momentum is positive, and the technical outlook points to higher prices, especially on a breakout. Look for the price of the SIXC to continue to trend higher if it can close above the $368 level.

GameStocks – Fun While It Lasted…

I don’t want to lecture anyone or say that I told you so. During one of my newsletters last week, I even said that I tip my hat to anyone who profited from this—all the respect in the world.

Me personally, though, I would never trade like this. Monday (Feb. 1) and Tuesday’s market (Feb. 2) was nothing more than a reality check. GameStop’s stock has lost nearly half of its value, and other Reddit darlings like AMC, Blackberry (BB), Koss (KOSS), and Silver (SLV) tanked.

Stocks don’t go up forever.

Stonks especially don’t.

Who knows, maybe the party’s not over. But I think the plummet in the Reddit stocks was bound to happen. Bubbles always eventually pop.

The market seems happy that the earth is back on its axis in stockland. The indices have recovered nearly all of last week’s losses already.

I didn’t call the GameStop short-squeeze, but I had called last week’s downturn for a while. The recovery so far this week wasn’t entirely surprising either.

Be that as it may, I remain concerned about complacency in the markets and overstretched valuations, plus the potential return of inflation. But the breather last week was needed and brought the indices to less overbought levels.

Generally, investors and analysts are bullish these days. According to a recent Bank of America survey of 194 money managers, bullishness on stocks is at a three-year high, and the average share of cash in portfolios, which is usually a sign of protection from market turmoil, is at the lowest level since May 2013.

We have still not declined 10% from the record highs- the minimum needed for a correction. Although the market needed last week’s downturn, we’re once again mostly right where we were several days ago.

I know what you’re thinking. Amazon (AMZN) and Alphabet (GOOGL) are the latest companies to crush their earnings estimates, how could we possibly have a correction?

For one, there are still things to be concerned about from a public health and economic perspective.

We are also long overdue for one. We haven’t seen one since last March. Corrections are healthy for markets and more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).

A correction could also be an excellent buying opportunity for what should be a great second half of the year.

We’re no longer as close to those same BUY levels as we were after market close on Friday. But we’re not quite at SELL again, and I still think we’re a few pullbacks away from making more BUY calls with conviction. In other words, welcome to no man’s land.

In my last newsletter, I cautioned against making manic moves and trading with emotions. We saw our worst week since October last week and declined in two of the previous three. Much of that was due to the GameStops and AMCs freaking out Wall Streeters. But I reminded you then, and I’ll remind you again. Shares of Eastman Kodak surged by 1,481% in three days last July, and the broader market seems to have done just fine since then.

Do not let the noise deter you from your goals. My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth.

With that said, to sum it up:

While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market will happen.

Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck.

We’re all in this together!

Is It Safe to Buy Tech Again?

Figure 1- Nasdaq Composite Index $COMP

Earnings season for tech stocks hit record numbers last week, and is set to continue this week with Amazon and Alphabet clobbering estimates. Usually, when investors get what they expect, it’s more of a reason to sell rather than buy.

But the Nasdaq so far this week has already recovered almost all of last week’s losses, and then some.

I’m not ready to call this a BUY though, or recommend buying into momentum. There are still concerns. Tech valuations, especially the tech IPO market, terrify me. SPACs don’t help either. The Nasdaq last week declined to a more “normal” level, and in the span of two days, hit an RSI approaching 63 again.

Last week’s decline was needed, but there are still echoes of the dot-com bubble 20-years ago. I remain bullish on earnings and tech sectors such as cloud computing, e-commerce, and fintech for 2021, but please monitor the RSI.

The RSI is how I have called the Nasdaq since December. While an overbought or oversold RSI does not automatically mean a trend reversal, it has with the Nasdaq.

The Nasdaq pulled back on December 9 after exceeding an RSI of 70 and briefly pulled back again after passing 70 again around Christmas time. We also exceeded a 70 RSI just before the new year, and what happened on the first trading day of 2021? A decline of 1.47%.

When I changed my Nasdaq call from a HOLD to a SELL on January 11 after the RSI exceeded 70, the Nasdaq declined again by 1.45%.

Before the Nasdaq exceeded an RSI over 73 prior to January 25th, I switched my call back to SELL, and the QQQ promptly declined 4.13% for the week.

The Nasdaq is trading in a precise pattern.

I still like tech and am bullish for 2021. But for now, I’m going to stay conservative and say HOLD.

For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.

Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter – it’s absolutely free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!

Thank you.

For a look at all of today’s economic events, check out our economic calendar.

Matthew Levy, CFA
Stock Trading Strategist
Sunshine Profits: Effective Investment through Diligence & Care

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All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits’ employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.