Kellogg Shares Soar on Q1 Earnings Beat and Raised Outlook

Kellogg shares rose over 8% on Thursday after the leading worldwide manufacturer and marketer of ready-to-eat cereals, reported better-than-expected earnings and revenue in the first quarter and lifted the fiscal year 2021 guidance.

The U.S. second-largest biscuit maker reported net sales rose over 5% to $3.58 billion in the quarter ended April 3, up from $3.41 billion seen in the same period a year ago. That was higher than the Wall Street consensus estimates of $3.38 billion.

The Battle Creek, Michigan-based company said its diluted earnings per share rose over 12% to $1.11, beating analysts’ expectations of $0.95 per share.

Kellogg forecasts sales growth to finish 2021 nearly flat year-on-year, an improvement from the previous expectations of about a 1% decline. Adjusted earnings per share is expected to increase by nearly 1% to 2%, up from the previous forecast of a 1% rise.

Following the upbeat results, Kellogg shares rose as high as 8% to $68.14 on Thursday. The stock rose over 8% so far this year.

Analyst Comments

“We expect a positive stock reaction to Kellogg’s large Q1 topline/profit/EPS beat, despite the cycling of solid topline growth in 1Q20, along with slightly raised FY21 guidance. While the magnitude of the FY21 raise was small (organic sales +100 bps, OP/EPS growth +50 bps), it was unexpected as there were concerns about lower or lower-quality FY guidance with commodity pressure,” noted Dara Mohsenian, equity analyst at Morgan Stanley.

Kellogg Stock Price Forecast

Five analysts who offered stock ratings for Kellogg in the last three months forecast the average price in 12 months of $66.00 with a high forecast of $72.00 and a low forecast of $60.00.

The average price target represents a -2.73% decrease from the last price of $67.85. Of those five analysts, two rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $60 with a high of $71 under a bull scenario and $43 under the worst-case scenario. The firm gave an “Equal-weight” rating on the food manufacturing company’s stock.

Several other analysts have also updated their stock outlook. Kellogg had its price target cut by Deutsche Bank to $70 from $75. They currently have a buy rating on the stock. Citigroup reduced their price objective to $72 from $75. Jefferies Financial Group dropped their target price to $65 from $69 and set a hold rating. Piper Sandler lowered Kellogg from an overweight rating to a neutral rating and dropped their target price to $66 from $76.

Upside and Downside Risks

Risks to Upside: Higher US snacks growth on reinvestment/innovation, stabilized US cereal business with innovation and higher ad spend, higher-margin expansion on greater cost savings and moderate commodities – highlighted by Morgan Stanley.

Risks to Downside: Pricing pressure in the US (65% of sales) with retailer friction, COVID-related supply chain disruptions in 2020, lower operating profit growth on higher reinvestment needs and cost pressure.

Check out FX Empire’s earnings calendar

American Indices Moving in Opposite Directions

American Indices are currently moving in opposite directions. The tech-heavy NASDAQ index is going down, aiming for the long-term up trendline while the old-school Dow Jones flirts with all-time highs after the price escaped from the pennant formation.

The German Dax is trading inside a flag formation, which is promoting a long-term breakout to the upside.

Gold is aiming higher after a successful bounce from the 1760 USD/oz support.

The USDCAD broke the lower line of the channel down formation, which should be considered an extreme weakness.

The AUDCHF tested the lower line of the symmetric triangle pattern. A breakout to the downside is very probable.

The ZARJPY shot higher after a false bearish breakout from the Head and Shoulders formation.

The EURPLN is aiming higher after a very handsome bullish engulfing pattern on the daily chart.

The USDHUF dropped like a rock after the price created a shooting star on the daily chart, which bounced from a combination of dynamic and horizontal resistances.

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

 

MetLife Shares Hit New Record High After Strong Q1 Earnings; Target Price $72 in Best Case

MetLife, one of the largest life insurers in the world, reported better-than-expected earnings in the first quarter of 2021 and said the worst impact of the COVID-19 pandemic was behind, sending shares to a record high on Wednesday.

The New York-based insurer reported net income of $290 million, or $0.33 per share, compared to net income of $4.4 billion, or $4.75 per share, in the first quarter of 2020. Adjusted earnings rose to $2.0 billion, or $2.20 per share, up from adjusted earnings of $1.4 billion, or $1.58 per share, seen in the same period a year ago. That beat the Wall Street consensus estimates of $1.48 per share.

“In the quarter, we were very pleased to return approximately $1.4 billion to shareholders through share repurchases and common stock dividends. We believe the worst impact of the pandemic on our business performance is behind us, and we are well-positioned to create additional value for our stakeholders in the future,” said MetLife President and CEO Michel Khalaf.

The leader of life insurance company said its net investment income rose 74% to $5.3 billion, largely driven by increases in the estimated fair value of certain securities that do not qualify as separate accounts under GAAP and higher variable investment income primarily due to higher private equity returns.

Following the upbeat results, MetLife shares hit an all-time of $65.905 on Wednesday. The stock rose over 39% so far this year.

Analyst Comments

“This quarter’s results clearly received an outsized benefit from strong alternative results, but what impresses us more is the stability and growth in underlying earnings, which should help in our view to drive further upside in the stock,” noted Nigel Dally, equity analyst at Morgan Stanley.

“Operating EPS was $2.20, considerably above both our estimate and the consensus of $1.53. Favorable marks on alternative investments provided more of a boost than expected, contributing over $1 billion to pre-tax earnings above a normal level. Conversely, pandemic-related claims weighed on some divisions, most notably its domestic group insurance operations. Excluding these items, we view the core earnings run-rate potential of the company as being largely in-line with prior expectations.”

MetLife Stock Price Forecast

Nine analysts who offered stock ratings for MetLife in the last three months forecast the average price in 12 months of $66.11 with a high forecast of $72.00 and a low forecast of $54.00.

The average price target represents a 1.07% increase from the last price of $65.41. Of those nine analysts, eight rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley raised the base target price to $72 from $70 with a high of $83 under a bull scenario and $48 under the worst-case scenario. The firm gave an “Overweight” rating on the life insurer’s stock.

“Following its retail separation, the company is committed to profitable growth while also simplify its operations to reduce earnings volatility. The company also de-risked its investment portfolio somewhat. Given these moves, the investment thesis for MetLife now revolves around capital management and free cash flow generation, growth in international operations, and expense reduction initiatives,” Morgan Stanley’s Dally added.

“We believe MetLife has the ability to continue its solid execution in its various businesses. More importantly, the solid results over the past several quarters were not driven by a single division, with all segments contributing to earnings growth to a certain extent.”

Several other analysts have also updated their stock outlook. JP Morgan raised the stock price forecast to $66 from $64. UBS initiated with a buy rating and a $72 target price. KBW upped the price target to $68 from $64. Piper Sandler lifted the price objective to $68 from $58. Evercore ISI increased the price target to $65 from $52. RBC raised the target price to $66 from $57.

Check out FX Empire’s earnings calendar

U.S. Hotel Operator Hilton’s Shares Slump as Q1 Earnings Disappoint

Hilton Worldwide Holdings, one of the largest and fastest-growing hospitality companies in the world, reported lower-than-expected earnings in the first quarter of 2021 as a resurgence in COVID-19 cases and tightening travel restrictions hurt bookings, sending its shares down about 4% on Wednesday.

The company, which has more than 4,000 hotels, resorts and timeshare properties comprising more than 650,000 rooms in 90 countries and territories, reported earnings per share, on an adjusted basis, of $0.02, missing the Wall Street’s consensus estimates of $0.05 per share.

Hilton said its net loss was $109 million for the first quarter and adjusted EBITDA was $198 million for the first quarter. System-wide comparable RevPAR fell 38.4% on a currency-neutral basis for the first quarter from the same period in 2020.

Following the disappointing results, Hilton shares fell about 4% to $124.54 on Wednesday. The stock rose over 12% so far this year.

Hilton Stock Price Forecast

Eight analysts who offered stock ratings for Hilton in the last three months forecast the average price in 12 months of $120.75 with a high forecast of $145.00 and a low forecast of $104.00.

The average price target represents a -3.18% decrease from the last price of $124.71. Of those eight analysts, three rated “Buy”, five rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $101 with a high of $141 under a bull scenario and $56 under the worst-case scenario. The firm gave an “Equal-weight” rating on the hospitality company’s stock.

Several other analysts have also updated their stock outlook. Hilton Worldwide had its price objective hoisted by Truist Securities to $114 from $106. Truist Securities currently has a hold rating on the stock. Raymond James raised their target price to $125 from $105 and gave the stock an outperform rating. Gordon Haskett upped their price target to $114 from $97 and gave the company a hold rating.

Analyst Comments

“The spread of coronavirus will pressure RevPAR growth, unit growth, and non-room fee growth. Strong mgmt team with a track record of creating value for owners. We see a wide risk-reward that will depend on the severity and speed of recovery from COVID-19,” noted Thomas Allen, equity analyst at Morgan Stanley.

“We think HLT is well placed from a liquidity standpoint, but its ability to repurchase stock medium-term may be impaired.”

Check out FX Empire’s earnings calendar

NASDAQ: The Leaders Lead. Or Attempt to, and Fail.

The tech stocks were the strongest part of the stock market in the previous year or so, and for a good reason. Due to the lockdown-induced surge in remote work, the need for all sorts of tech improvements (in both: software and hardware) soared. So, it’s no wonder that the NASDAQ was the strongest part of the market. It was the sole leader.

Now, there’s a rule in every market that leaders… Well, lead. This makes perfect sense, no surprise yet. But, there’s a point after which the leaders stop leading and stocks that are relatively weak or have less favorable fundamentals are catching up, eventually rallying more than the leaders. Why would this be the case? Because those who understand the markets and what’s going on are already invested, and those who are neither as knowledgeable nor experienced – the investment public – enter the market.

The investment public makes purchases often without any regard to fundamentals (or technicals) – they buy because a given asset seems cheap compared to other assets. And what would be cheap in the final part of the upswing – after the market professionals have already established their positions in well-positioned assets? The poorly positioned assets. The stocks/markets that were – for a good reason – neglected previously. So, they start buying those, and the laggards become the new leaders.

The NASDAQ was the leader that started to underperform while other stocks soared. The last few months were as clear as it gets in terms of emphasizing that. While the S&P 500 Index soared to new all-time highs, the only thing that the tech stocks managed to do was to attempt to break to new highs.

Attempt.

And fail.

Last week’s shooting-star-shaped weekly reversal was bearish on its own, but considering that it was also a failure to break to new highs, the bearish fire got gasoline poured over it.

Now, this could have been accidental, and it was prudent to wait for another decline before stating that the top in the stock market is most likely in…

Until we saw yesterday’s slide. The NASDAQ is already over 2% lower this week, and it’s only after two sessions.

Why is this important? Because if we have indeed seen a major top on the stock market , then it tells us a lot about the next moves on the precious metals market. And – in particular – about mining stocks.

The history might not repeat itself, but it does rhyme, and those who insist on ignoring it are doomed to repeat it.

And there’s practically only one situation from more than the past four decades that is similar to what we see right now.

It’s the early 2000s when the tech stock bubble burst. It’s practically the only time when the tech stocks were after a similarly huge rally. It’s also the only time when the weekly MACD soared to so high levels (we already saw the critical sell signal from it). It’s also the only comparable case with regard to the breakout above the rising blue trend channel. The previous move above it was immediately followed by a pullback to the 200-week moving average, and then the final – most volatile – part of the rally started. It ended on significant volume when the MACD flashed the sell signal. Again, we’re already after this point.

The recent attempt to break to new highs that failed seems to have been the final cherry on the bearish cake.

Why should I – the precious metals investor, care?

Because of what happened in the XAU Index (a proxy for gold stocks and silver stocks ) shortly after the tech stock bubble burst last time.

What happened was that the mining stocks declined for about three months after the NASDAQ topped, and then they formed their final bottom that started the truly epic rally. And just like it was the case over 20 years ago, mining stocks topped several months before the tech stocks.

Mistaking the current situation for the true bottom is something that is likely to make a huge difference in one’s bottom line. After all, the ability to buy something about twice as cheap is practically equal to selling the same thing at twice the price. Or it’s like making money on the same epic upswing twice instead of “just” once.

And why am I writing about “half” and “twice”? Because… I’m being slightly conservative, and I assume that the history is about to rhyme once again as it very often does (despite seemingly different circumstances in the world). The XAU Index declined from its 1999 high of 92.72 to 41.61 – it erased 55.12% of its price.

The most recent medium-term high in the GDX ETF (another proxy for mining stocks) was at about $45. Half of that is $22.5, so a move to this level would be quite in tune with what we saw recently.

And the thing is that based on this week’s slide in the NASDAQ that followed the weekly reversal and the invalidation, it seems that this slide lower has already begun.

Wait, you said something about three months?

Yes, that’s approximately how long we had to wait for the final buying opportunity in the mining stocks to present itself based on the stock market top.

The reason is that after the 1929 top, gold miners declined for about three months after the general stock market started to slide. We also saw some confirmations of this theory based on the analogy to 2008.

All in all, the precious metals sector would be likely to bottom about three months after the general stock market tops. If the last week’s highs in the S&P 500 and NASDAQ were the final highs, then we might expect the precious metals sector to bottom in the middle of the year – in late July or in August.

Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.

Przemyslaw Radomski, CFA
Founder, Editor-in-chief
Sunshine Profits: Effective Investment through Diligence & Care

* * * * *

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are 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 deemed to be accurate, Przemyslaw Radomski, 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. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA 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. Przemyslaw Radomski, 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.

 

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Counter-Trend Upside Target is 13722.50 – 13803.00

June E-mini NASDAQ-100 index futures rebounded on Wednesday following a session defined by major weakness in technology stocks. Major tech shares rebounded in early trading. Apple and Tesla gained about 1% each after falling 3.5% and 1.7% respectively on Tuesday.

At 10:48 GMT, June E-mini NASDAQ-100 Index futures are trading 13613.75, up 77.75 or +0.57%.

On Tuesday, investors exited technology and growth stocks, pushing the cash market NASDAQ Composite down 1.9%. Along with losses in Apple and Tesla, shares of Netflix lost 1.2%, and Microsoft dropped 1.6%. Amazon and Facebook shed 2.2% and 1.3%, respectively. Alphabet fell 1.6%.

Daily June E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Tuesday when sellers took out the previous swing bottom at 13700.50. The main trend will change to up on a move through 14064.00.

The short-term range is 12609.75 to 14064.00. Its retracement zone at 13336.75 to 13165.25 is the first downside target.

The main range is 12200.00 to 14064.00. Its retracement zone at 13132.00 to 12912.00 is the major downside target area.

The retracement zones combine to form a potential support cluster at 13165.25 to 13132.00. We’re likely to see a technical bounce on the first test of this area.

The minor range is 14064.00 to 13380.75. Its retracement zone at 13722.50 to 13803.00 is the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this zone.

Daily Swing Chart Technical Forecast

The early inside trading range suggests investor indecision and impending volatility. In other words, we could be looking a two-sided trade on Wednesday. We’re going to use yesterday’s close at 13536.00 as our pivot.

Bullish Scenario

A sustained move over 13536 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of 13722.50 to 13803.00. Since the main trend is down, sellers are likely to come in on a move into this retracement zone. Overcoming 13803.00 will be a sign of strength.

Bearish Scenario

A sustained move under 13536.00 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into yesterday’s low at 13380.75, followed closely by a 50% level at 13336.75.

If 13336.75 fails as support then we could see an acceleration into the price cluster at 13165.25 to 13132.00. Aggressive counter trend buyers could come in on a test of this area.

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

Hyatt Hotels Post Deeper Loss in Q1, Shares Fall

Hyatt Hotels Corporation, a leading global hospitality company, reported a bigger-than-expected loss for the fifth consecutive time in the first quarter of this year, reflecting the impact of the COVID-19 pandemic and worldwide travel restrictions.

The U.S. hotel operator said its net loss attributable was $304 million, or $2.99 per diluted share, in the quarter ended March 31, 2021, compared to a net loss attributable to Hyatt of $103 million, or $1.02 per diluted share, in the first quarter of 2020.

Adjusted net loss attributable was $363 million, or $3.57 per diluted share, in the first quarter of 2021, compared to Adjusted net loss attributable to Hyatt of $35 million, or $0.35 per diluted share, in the first quarter of 2020. That was worse than Wall Street’s consensus estimates of -$1.33 per share.

The Chicago-based company said its comparable owned and leased hotels RevPAR decreased 64.4% compared to the first quarter of 2020.

Following the disappointing results, Hyatt shares fell 1.56% to $80.68 on Tuesday. The stock rose over 8% so far this year.

Analyst Comments

“Expect a positive reaction to Hyatt’s (H) 1Q21 beat. Rising trends in the United States and the greater China region, which drove outperformance, are likely to accelerate through 2022 while Europe has been a laggard on vaccine distribution. What remains is an acceleration in urban, business transient and group business, which could provide another phase of the recovery,” noted David Katz, equity analyst at Jefferies.

Hyatt Stock Price Forecast

Eleven analysts who offered stock ratings for Hyatt in the last three months forecast the average price in 12 months of $60.00 with a high forecast of $71.00 and a low forecast of $52.00.

The average price target represents a 7.50% increase from the last price of $55.82. Of those 11 analysts, eight rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $61 with a high of $107 under a bull scenario and $31 under the worst-case scenario. The firm gave an “Equal-weight” rating on the hospitality company’s stock.

“Higher owned exposure suggests risk given the spread of COVID-19 and greater operating leverage. However, Hyatt has lower financial leverage than peers. Higher exposure to increasing new supply and alternative accommodations given more gateway city exposure than peers (e.g., 8% NYC exposure vs. MAR 4% and HLT 3%) puts RevPAR growth at risk,” noted Thomas Allen, equity analyst at Morgan Stanley.

“Potential ability to monetize assets at attractive multiples could create value. Limited float / large insider ownership means constant discount, despite attractive M+F business.”

Several other analysts have also updated their stock outlook. BofA Global Research raised the price objective to $85 from $80. Evercore ISI lifted the target price to $95 from $90. Citigroup increased the price target to $90 from $80. Baird upped the target price to $72 from $63. Jefferies raised the target price to $85 from $75.

Check out FX Empire’s earnings calendar

Investment Firm KKR Tops Earnings Estimates; Target Price $60

U.S.-based investment firm KKR & Co reported better-than-expected earnings in the first quarter of 2021, largely driven by a higher level of carried interest and an increase in transaction and management fees.

The company that manages multiple alternative asset classes said its after-tax distributable earnings rose 63% year-over-year to $660 million, or adjusted $0.75 per share, up from $406.3 million seen in the same period a year ago. That was higher than Wall Street’s expectations of $0.62 per share.

The company, which was formerly known as Kohlberg Kravis Roberts & Co, said its Assets Under Management (AUM) increased to $367 billion, up 77% year-over-year, with $15 billion of organic new capital raised in the quarter and $51 billion for the LTM period. The acquisition of Global Atlantic contributed $98 billion in 1Q’21.

KKR shares surged more than 38% so far this year. At the time of writing, the stock traded nearly flat at $56.09.

Analyst Comments

“Fee-related earnings of $364M compared to 1Q20 of $258M with transaction fees of $166M vs $98M y/y. The performance fee business recorded +$61M net of compensation which compared to +$138M in the prior-year period. Investment income, which reflects the balance sheet activities, totaled $392M vs. $128M in 1Q20. Ultimately, KKR generated +$660M of after-tax distributable earnings ($0.75/share) and declared a $0.145 dividend in the quarter,” noted Gerald E. O’Hara, equity analyst at Jefferies.

KKR Stock Price Forecast

Eleven analysts who offered stock ratings for KKR in the last three months forecast the average price in 12 months of $60.00 with a high forecast of $71.00 and a low forecast of $52.00.

The average price target represents a 7.50% increase from the last price of $55.82. Of those 11 analysts, eight rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $60 with a high of $92 under a bull scenario and $22 under the worst-case scenario. The firm gave an “Equal-weight” rating on the investment firm’s stock.

Several other analysts have also updated their stock outlook. KKR & Co. Inc. had its price objective lifted by Deutsche Bank to $52 from $47. They currently have a hold rating on the asset manager’s stock. BMO Capital Markets boosted their target price to $71 from $69. Credit Suisse Group boosted their target price to $60 from $53 and gave the company a neutral rating.

Analyst Comments

“Strong near-term growth with fundraising supercycle and GA accretion coming into earnings, but we see this reflected in the price at the current valuation for a more capital-intensive business model,” noted Michael Cyprys, equity analyst at Morgan Stanley.

“While strong investment performance could drive upward estimate revisions, we have less visibility on more episodic investment income gains. Mgmt’s increased focus on expanding the platform with adjacent strategies and scaling successor funds should drive higher fee-related earnings (FRE).”

Upside and Downside Risks

Risks to Upside: 1) Faster deployment with greater opportunity set. 2) Accelerated portfolio exit activity. 3) Stronger fundraising boosted by seeding of new strategies. 4) Large Insurance M&A – highlighted by Morgan Stanley.

Risks to Downside: 1) Volatile markets leading to weaker investment returns, balance sheet markdowns and delays harvesting of investments pressuring earnings. 2) Increased political and regulatory scrutiny of PE business model.

Check out FX Empire’s earnings calendar

Cirrus Logic Could Sell Off to 60

iPhone supplier Cirrus Logic Inc. (CRUS) is posting marginal gains in Tuesday’s pre-market following a tier one analyst upgrade. The Austin-based integrated circuits manufacturer fell 15% last week after missing Q4 2021 top and bottom line estimates, posting earnings-per-share (EPS) of $0.66 on a 5.1% revenue increase to $293.54 million. The company also issued downside guidance, blaming supply constraints that have caught the semiconductor industry off-guard.

Hurt By Supply Constraints

The company should benefit from US – China discussions intended to reduce export control-driven bottlenecks that have impacted dozens of industries dependent on the silicon chip. However, natural forces of supply and demand should eventually ease the crisis, with manufacturers now ramping up production. Meanwhile, Apple Inc.’s (AAPL) blowout iPhone sales this year raise odds that Cirrus Logic will recover lost ground once balance is returned.

Needham analyst Rajvindra Gill upgraded Cirrus Logic to ‘Buy’ with a $100 target this morning, noting “We’ve been on the sidelines owing to the high valuation and the concentration of revenues in Apple (70 to 80%+). The stock has fallen ~26% from its mid-January peak (underperforming the SOX by 29% over that period) and its P/E multiple has compressed 40%. While recent results/guidance was disappointing … new opportunities are emerging. Net, we expect revenue growth to accelerate in FY22 and believe stock is compelling here.”

Wall Street and Technical Outlook

Wall Street consensus has grown cautious so far in 2021 due to high valuation, yielding an ‘Overweight’ rating based upon 7 ‘Buy’ and 4 ‘Hold’ recommendations. Price targets currently range from a low of $80 to a Street-high $115 while the stock is set to open Tuesday’s session about $7 below the low target. While the upgrade should ease highly bearish sentiment, short-term technical damage will take time to overcome.

Cirrus Logic failed a breakout above the 2017 high at 71.97 in the first quarter of 2020, descending into the mid-40s. It bounced back to resistance in January 2021 and broke out but failed that advance as well. Price action is now caught between support in the 70s and resistance just above 100 while downside momentum after last week’s selloff favors a breakdown that could deep support near 60 before attracting committed buying interest.

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.

Stock Buybacks: Why Would a Company Reinvest in Themselves?

U.S. corporate buybacks are on the rise in 2021 lifting investor spirits after last year’s pandemic dampened activity. While most investors are eager to see how much buybacks may support their investments, some are confused over what they are and how they work, and whether they are actually good or bad for a company’s stock price.

Corporations often buy back large blocks of their stocks typically when share prices are low, but some may choose for other reasons to buy their company’s stock even when analysts believe company shares are overvalued. Whether they buy their shares at cheap or expensive levels, a stock buyback is not always beneficial for individual investors.

Table of contents

Historic Background

Stock repurchases weren’t always legal per se. After the stock market crash of 1929 and the Great Depression, the U.S. government passed the Securities Act of 1933 and the Securities Exchange Act of 1934 to try to prevent it from happening again.

The 1934 legislation didn’t bar stock buybacks, per se, but it barred companies from doing anything to manipulate their stock prices. Companies knew that if they did a stock buyback, it could open them up to accusations from the Securities and Exchange Commission (SEC) of trying to manipulate their stock price, so most just didn’t.

Tax cuts during the Trump administration made stock repurchases very popular as corporations spent billions on their own stock to reward shareholders and investors. However, corporate executives and insiders have also been accused of taking advantage of the stock buyback boom to sell shares they own to the companies they work for, profiting handsomely. Companies are spending millions or billions of dollars to reward shareholders and prop up their stock prices with buybacks, even if that means laying off workers to do it.

Recently, the Biden Administration announced it was planning on reforming current tax laws. If corporations begin to fear that some of the tax advantages of a stock buyback may be reduced or eliminated then this may encourage companies to become more active in 2021 before the tax changes become law.

What is a Stock Buyback?

A stock buyback, also known as a share repurchase, takes place when a corporation buys its own outstanding shares in order to reduce the number of shares available on the open market.

In a stock buyback, a company repurchases its own shares from the broader marketplace, usually through the open market. That leaves the remaining shareholders with a bigger chunk of the company and increases the earnings they reap per share, on top of the regular dividend payments that companies make to shareholders out of their profits.

Why Companies Perform Buybacks

Corporations buy back shares for a number of reasons such as to increase the value of remaining shares available by reducing the supply of outstanding shares or to prevent other shareholders from taking a controlling stake, sometimes called a hostile takeover.

Another reason for a buyback is for compensation purposes. Companies often award their corporate employees with stock and stock options. This benefits the existing shareholders and board members who are usually paid in stock options.

Pros of Stock Buybacks for Investors

  1. Boost in share prices
  2. Rising dividends
  3. Better earnings per share
  4. Less excess cash
  5. Positive psychology

“With the market being as expensive as it seems, share repurchases could drive the market that much higher,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

“It adds to the Street’s belief that there’s an underlying bid, we’re not in this alone, and someone else is going to support the stock and that’s the company,” he said. “It turns out to be a good thing for share prices. But they run the risk of overvaluing stocks, and it speaks to the broader question about why companies are doing it.”

Cons of Stock Buybacks for Investors

  1. Poor predictions
  2. Sinking dividends
  3. Poor use of capital
  4. Management self-interest
  5. Cover for stock handouts

Larry Fink, CEO of BlackRock, one of the largest investment companies in the world, in 2014 warned U.S. companies to slow down on buybacks and dividends.

“We certainly believe that returning cash to shareholders should be part of a balanced capital strategy; however, when done for the wrong reasons and at the expense of capital investment, it can jeopardize a company’s ability to generate sustainable long-term returns,” he wrote in a letter.

Recent Activity Indicates Companies Leaning to the Pro Side

The rapidly improving economy and stocks at record highs may be fueling a flurry of stock buyback activity in 2021.

Banks have improved their capital positions and should be allowed to continue to buy back their own shares, Treasury Secretary Janet Yellen said in March.

Regulators restricted share repurchases in 2020 for the biggest institutions in the country as a precautionary measure after COVID-19 reached pandemic status. After those banks passed a pandemic-focused stress test in December, the Federal Reserve said it would allow buybacks to resume, though with some restrictions.

Yellen, speaking in March before the Senate Committee on Banking, Housing and Urban Affairs, said she agreed with allowing the share buybacks.

“I have been opposed earlier when we were very concerned about the situation the banks would face about stock buybacks,” Yellen said. “But financial institutions look healthier now, and I believe they should have some of the liberty provided by the rules to make returns to shareholders.”

They are expected to do just that as the buyback restrictions eased during the first quarter of 2021.

While Yellen see no problem with financial institutions resuming buyback activity, Warren Buffett’s capital-deployment machine pulled back on several fronts at the start of the year as the billionaire took a more cautious stance on stocks.

Berkshire Hathaway Inc slowed its buyback pace, according to a regulatory filing Saturday. Buffett has struggled in recent years to keep up with Berkshire’s ever-gushing cash flow. That’s led him to repurchase significant amounts of Berkshire stock, pulling a lever for capital deployment that he had previously avoided in favor of big acquisitions or stock purchases. He set a record in the third quarter of last year, snapping up $9 billion of stocks, but slowed that pace during the first quarter with repurchases of $6.6 billion.

Berkshire repurchased more stock in January and February than the company did in March when the stock climbed 5.8% according to the filing. Buffett’s long been disciplined on the price of buybacks, noting in 2018 when the company loosened its repurchase policy that he and his longtime business partner and Berkshire Vice Chairman Charlie Munger can repurchase shares when they’re below Berkshire’s intrinsic value.

Despite buybacks that fell short of Buffett’s quarterly record, the billionaire investor has continued to go after Berkshire’s own stock since the end of March, with at least $1.25 billion of repurchases through April 22, according to the filing. And given that Berkshire has no set amount allocated for buyback plans, sizable repurchases are still a nice bit of capital deployment, according to CFRA Research analyst Cathy Seifert.

“The fact that Berkshire allocated over $6 billion to buybacks this quarter is going to be positively received by investors” Seifert said.

What Bloomberg Intelligence Says

“The $6.6 billion 1Q buyback was an expected drop from 4Q, but still significant. Nearly all segments showed accelerated revenue and earnings.”

Share Buyback Plans are Booming

Corporate buyback announcements ‘exploded’ as trading in April wrapped up and that helped push stocks higher, said Vanda Research.

A jump in buybacks should help soften the blow in the U.S. equity market in the event of a drawdown.

“As net equity supply shrinks every dollar invested in the U.S. market will have a larger marginal impact,” said Vanda.

Diamondback Shares Gain as Q1 Profits Top Estimates; Target Price $96

Diamondback Energy shares rose about 3% on Monday after the oil and natural gas company reported better-than-expected profits in the first quarter of 2021 as the rollout of COVID-19 vaccines fueled hopes of restrictions being eased, boosting fuel demand.

The Midland, Texas-based company said its net income was $220 million, or $1.33 per diluted share. The adjusted net income was $379 million, or $2.30 per diluted share. That was higher than the Wall Street consensus estimates of $1.89 per share.

The company said its first-quarter 2021 consolidated adjusted EBITDA was $845 million. Adjusted EBITDA net of non-controlling interest was $836 million. Diamondback also declared a cash dividend of $0.40 per common share.

Diamondback Energy shares rose about 3% to $83.92 on Monday. The stock surged more than 70% so far this year.

Analyst Comments

Diamondback Energy’s (FANG) 1Q was largely pre-released though 8% lower unit costs drove a 13% EBITDA beat and capex was in line. DCPS missed by -9% due to deriv proceeds that flowed through CFF and merger expenses. Notably, FANG sold QEP’s Bakken for $745m, 20% above our est and will accelerate debt paydown. FY21 production guidance was adjusted for asset sales but otherwise reiterated,” noted David Deckelbaum, equity analyst at Cowen.

Diamondback Stock Price Forecast

Eighteen analysts who offered stock ratings for Diamondback in the last three months forecast the average price in 12 months of $96.47 with a high forecast of $115.00 and a low forecast of $82.00.

The average price target represents an 18.03% increase from the last price of $81.73. Of those 18 analysts, 14 rated “Buy”, four rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $107 with a high of $141 under a bull scenario and $61 under the worst-case scenario. The firm gave an “Overweight” rating on the oil and natural gas company’s stock.

“Low cost of supply relative to peers. Pre-dividend breakeven of $23/bbl WTI (pro-forma) is among the lowest in our coverage after 2020 well cost reductions of >20% with peer-leading operating costs. In a higher price environment FANG can deliver outsized cash returns, while at low oil prices downside is tempered by low breakevens,” noted Devin McDermott, equity analyst at Morgan Stanley.

“Line of sight to leverage reduction. We project net debt/EBITDA decreasing from 2.5x at the end of 2020 to 2.2x by the end of 2021 and 1.9x in 2022.  Recent acquisitions and reduced growth rate should address investors’ inventory concerns. Concerns around inventory should begin to subside after recent acquisitions assuming low single digits long-term growth rate.”

Several other analysts have also updated their stock outlook. Diamondback Energy had its price target upped by research analysts at Roth Capital to $115 from $84. The brokerage currently has a “buy” rating on the oil and natural gas company’s stock. Mizuho lifted their price target to $101 from $92 and gave the company a “buy” rating. Siebert Williams Shank reaffirmed a “buy” rating and issued an $89 price target.

Check out FX Empire’s earnings calendar

General Motors Could Hit New All-Time High on Strong Q1 Earnings; Target Price $69

General Motors, the largest US-based automaker, is expected to report its first-quarter earnings of $1.02 per share, which represents year-over-year growth of over 64% from $0.62 per share seen in the same quarter a year ago.

The Detroit, Michigan-based company would post revenue growth of about 2% to around $33.3 billion.

General Motors’s better-than-expected results, which will be announced on Wednesday, May 5, would help the stock hit new all-time highs. General Motors shares rose over 37% so far this year. The stock traded nearly flat at $57.35 on Monday.

General Motors Stock Price Forecast

Twelve analysts who offered stock ratings for General Motors in the last three months forecast the average price in 12 months of $69.42 with a high forecast of $85.00 and a low forecast of $62.00.

The average price target represents a 20.81% increase from the last price of $57.46. Of those 12 analysts, 11 rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $80 with a high of $120 under a bull scenario and $32 under the worst-case scenario. The firm gave an “Overweight” rating on the auto manufacturer’s stock.

Several other analysts have also updated their stock outlook. Credit Suisse raised the target price to $72 from $68. BofA lifted the price objective to $80 from $72. UBS increased the target price to $75 from $50. Daiwa Capital Markets upped the price target to $67 from $60. Jefferies raised the target price to $62 from $50.

Analyst Comments

“We are OW based on General Motors’ (GM) diversified portfolio, with multiple ways for GM to enhance shareholder value, through: EVs, ICE and Autonomy. GM also has leading North American margins, generates strong cash flow, and has a robust balance sheet,” noted Adam Jonas, equity analyst at Morgan Stanley.

“We believe that the market is underestimating the SOTP of the GM enterprise via: 1) Legacy ICE, 2) GM EV, 3) GM’s Ultium Battery business, 4) China JVs, 5) GM Finco, 6) GM Cruise, 7) hidden franchise value in brands such as Corvette and 8) GM Connected Services. GM management has a proven track record to allocate capital away from structurally challenged areas towards re-positioning the business model.”

Check out FX Empire’s earnings calendar

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Strengthens Over 13882.25, Weakens Under 13788.25

June E-mini NASDAQ-100 Index futures are trading sharply higher on Monday in a move that tends to suggests investors are ignoring the Wall Street adage, “sell in May and go away”. A mantra that calls for taking off risk from May to October, a period where the market is more prone to sell-offs historically.

At 14:37 GMT, June E-mini NASDAQ-100 Index futures are trading 13904.00, up 54.00 or +0.39%.

On the data front, IHS Markit data showed U.S. manufacturing activity grew at a record-high speed last month with April’s Manufacturing Business Activity PMI Index rising to 60.5, matching expectations from economists polled by Dow Jones.

Daily June E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The man trend is up according to the daily swing chart. A trade through 14064.00 will signal a resumption of the uptrend. Taking out 13700.50 will change the main trend to down.

The minor trend is also up. A trade through 13818.50 will change the minor trend to down. This will shift momentum to the downside.

The first minor range is 13700.50 to 14064.00. The index is currently trading on the strong side of its pivot at 13882.25.

The second minor range is 13512.50 to 14064.00. Its pivot at 13788.25 is potential support.

The short-term range is 12609.75 to 14064.00. If the main trend changes to down then its retracement zone at 13334.50 to 13163.50 will become the primary downside target area.

Daily Swing Chart Technical Forecast

The direction of the June E-mini NASDAQ-100 Index on Monday is likely to be determined by trader reaction to 13882.25.

Bullish Scenario

A sustained move over 13882.25 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into 14064.00. Taking out this high could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 13882.25 will signal the presence of sellers. The first downside target is the pivot at 13788.25, followed by the main bottom at 13700.50.

Taking out 13700.50 will change the main trend to down. This could trigger the start of a correction into the short-term retracement zone at 13334.50 to 13163.50.

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

Restaurant Brands Tops Q1 Earnings Estimates; Target Price $80 in Best Case

Restaurant Brands International, a global multi-brand franchisor of fast-food restaurants, reported better-than-expected earnings in the first quarter of 2021 and the CEO signaled that the company returned to growth after the COVID-19 slowdown, sending its shares up about 1.2% on Friday.

The parent company of Burger King and Popeye reported quarterly earnings of $0.55 per share during the quarter ended March 31, 2021, beating the Wall Street consensus estimates of $0.50 per share, also, up from $0.48 per share seen in the same period a year ago. Restaurant Brands’ revenues rose about 1% to $1.26 billion.

The company said, as of the end of March 2021, 95% of our restaurants were open worldwide, including substantially all of our restaurants in North America and the Asia Pacific and approximately 92% and 84% of our restaurants in Europe, the Middle East, and Africa and Latin America, respectively.

The U.S.-listed Restaurant Brands shares rose 1.2% to $68.61 on Monday.

“Our first-quarter results signal our return to growth with system-wide sales surpassing Q1 2019 and net restaurant growth nearly matching our best-ever Q1 performance in 2018.  We are excited by the global growth potential of our brands and are encouraged by this early momentum as we work toward a return to historic levels of unit growth this year,” said José E. Cil, Chief Executive Officer of Restaurant Brands.

Analyst Comments

“A relatively in line quarter on top and bottom line, with the hoped-for recovery of Tim’s delayed by new restrictions in Canada. BK strong, esp in the US, but lags other QSRs that have reported thus far. Encouraging data points on digital, unit development. Numbers up modestly, price target to $70,” said John Glass, equity analyst at Morgan Stanley.

“Multi-brand platform QSR operator with a global network of master franchisees. The ability to grow multiple brands through master franchisees is a strategic advantage and drives solid unit growth. Asset lite franchised business model, Lower G&A/capex drive FCF though more spending may be needed as peers ramp investment. Comp-store sales variable. Burger King US and Tim’s have lagged some peers and have room to improve, though we see fewer catalysts beyond easy compares in ’21. Valuation attractive based on FCF and history, though gap to peers has persisted and QSR is not unique in trading at a discount to history among peers.”

Restaurant Brands Stock Price Forecast

Sixteen analysts who offered stock ratings for Restaurant Brands in the last three months forecast the average price in 12 months of $70.14 with a high forecast of $80.00 and a low forecast of $61.00.

The average price target represents a 2.23% increase from the last price of $68.61. Of those 16 analysts, 11 rated “Buy”, five rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $70 with a high of $92 under a bull scenario and $48 under the worst-case scenario. The firm gave an “Equal-weight” rating on the fast-food holding company’s stock.

Several other analysts have also updated their stock outlook. Stifel raised the target price to $75 from $70. UBS lifted the target price to $74 from $71. Citigroup issued a buy rating and a $74.00 target price on the stock. BMO Capital Markets lifted their price objective to $71 from $66.

“We view shares as fairly valued trading in-line on an FY2 EV/EBITDA basis relative to global, highly franchised peers DPZ, MCD and YUM. Indeed, over the last 5 years, shares have traded in-line with peers while over the last 3 years, shares have traded at an 8% discount. We nudge our price target to $68 from $65, predicated on shares’ 17x FY2 EV/EBITDA multiple sustaining,” noted Andrew M. Charles, equity analyst at Cowen.

Check out FX Empire’s earnings calendar

PayPal Rangebound Ahead of Wednesday Report

PayPal Holdings Inc. (PYPL) reports Q1 2021 earnings after Wednesday’s closing bell, with analysts looking for a profit of $1.01 per-share on $5.9 billion in revenue. If met, earnings-per-share (EPS) will mark a 53% increase in profit compared to the same quarter last year. The stock surged 7.4% in February after beating Q4 2020 top and bottom line estimates but topped out a few sessions later and has been rangebound since that time.

Fintech Leadership Grows

The company benefited from 2020’s acceleration into digital transactions, posting a phenomenal 116% annual return. It’s added another 12% so far in 2021, with a surging U.S. economy and bullish fintech sentiment adding to the list of tailwinds. It’s now a recognized market leader in digital wallets, highlighted by this week’s news that Coinbase Global Inc. (COIN) will allow customers to buy crypto using debit and credit cards linked to their PayPal accounts.

Rosenblatt Securities analyst Sean Horgan called PayPal one of his top digital payment picks last week, maintaining a ‘Buy’ rating while raising the firm’s price target from $320 to $350. He’s looking for 30% upside compared to mid-April price levels, with the Venmo mobile payment division set to exceed a $900 million 2021 revenue target due to the surge in spending generated by massive stimulus in the United States.

Wall Street and Technical Outlook

Wall Street bulls have been pounding the tables since the second quarter of 2020, yielding a current ‘Buy’ rating based upon 36 ‘Buy’, 5 ‘Overweight’, 6 ‘Hold’, and 1 ‘Sell’ recommendation. Price targets now range from a low of $241 to a Street-high $375 while the stock closed Friday’s U.S. session more than $50 below the median $313 target. This low placement raises odds for a high percentage rally if earnings exceed expectations this week.

PayPal broke out above the 2019 high at 121.48 in May 2020 and entered a powerful trend advance that stalled just above 200 in September. Bullish action cleared that barrier in December, yielding a vertical rally impulse that posted an all-time high at 309.14 in February. The subsequent downdraft found support at 223 in March while price action since that time has been stuck within those boundaries, which are likely to persist through 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. 

Earnings to Watch Next Week: ON Semiconductor, Ferrari, General Motors and Moderna in Focus

Earnings Calendar For The Week Of May 3

Monday (May 3)

IN THE SPOTLIGHT: ON SEMICONDUCTOR

ON Semiconductor, a semiconductors supplier company, is expected to report its first-quarter earnings of $0.34 per share, which represents year-over-year growth of over 240% from $0.10 per share seen in the same quarter a year ago.

The Phoenix, Arizona-based company’s revenue would grow over 14% to $1.4 billion.

“The company is the only one in our coverage to see weaker gross margins cycle to cycle. Notably, this is happening despite an improvement in end-market mix toward industrial and autos and away from consumer and computing, where ON has become more selective in recent quarters,” noted Craig Hettenbach, equity analyst at Morgan Stanley.

“We like the message from the new CEO of improving mix of the business but think this has already been reflected in meaningful multiple expansion in the stock. Another thing to consider is the potential for lost revenue as the company deemphasizes some products.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 3

Ticker Company EPS Forecast
ENBL Enable Midstream Partners $0.17
EL Estée Lauder $1.28
WEC Wisconsin Energy $1.47
EPD Enterprise Products Partners $0.50
ON ON Semiconductor $0.34
ITRI Itron $0.40
ALXN Alexion Pharmaceuticals $3.08
L Loews $0.95
CNA CNA Financial $0.95
EPRT Essential Properties Realty Trust Inc $0.29
VRNS Varonis Systems -$0.13
QGEN Qiagen $0.63
RMBS Rambus $0.28
WWD Woodward $0.82
REGI Renewable Energy $0.20
IRBT Irobot $0.06
SCI Service International $0.98
ITUB Itau Unibanco $0.12
FN Fabrinet $1.15
CAR Avis Budget -$2.38
JKHY Jack Henry Associates $0.86
O Realty Ome $0.85
BRX Brixmor Property $0.40
UE Urban Edge Properties $0.22
AWK American Water Works $0.73
NSP Insperity $1.56
APO Apollo Global Management $0.59
RBC Regal Beloit Corporation $1.68
ADC Agree Realty $0.83
CR Crane $1.31
OGS One Gas $1.78
CHGG Chegg $0.31
CVI CVR Energy -$1.23
OHI Omega Healthcare Investors $0.82
XPO XPO Logistics $0.93
FLS Flowserve $0.20
CBT Cabot $0.97
LEG Leggett & Platt $0.41
FANG Diamondback Energy $1.89
SHO Sunstone Hotel Investors -$0.15
KMT Kennametal $0.21
SEDG Solaredge Technologies Inc $1.01
VNO Vornado Realty $0.63
WMB Williams Companies $0.28
AWR American States Water $0.48
MWA Mueller Water Products $0.14
MOS Mosaic $0.50
CC Chemours Co $0.68
LGND Ligand Pharmaceuticals $1.05
CORT Corcept Therapeutics $0.21
CIB Bancolombia $0.34
SANM Sanmina $0.82
EGOV NIC $0.24
AMG Affiliated Managers $4.24

Tuesday (May 4)

IN THE SPOTLIGHT: FERRARI

Ferrari, an Italian luxury sports car manufacturer, is expected to report its first-quarter earnings of $1.26 per share, which represents year-over-year growth of over 27% from $0.99 per share seen in the same quarter a year ago.

The company which is known for its prancing horse logo would post revenue growth of more than 24% to around $1.27 billion

“We find the long-term stability of Ferrari’s revenue, addressable market growth, expansive profit margin, and solid returns on invested capital throughout economic cycles to be compelling reasons to invest at the right price,” noted Richard Hilgert, senior equity analyst at Morningstar.

“Because of its exclusive clientele of high-net-worth individuals, we believe the company will show resiliency during periods of economic uncertainty, such is currently the case with the coronavirus pandemic. While we are not entirely averse to paying up for stocks like Ferrari that possess a wide economic moat and stable economic profits through business cycles, we think Ferrari stock will regularly trade at rich, luxury goods valuation multiples.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 4

Ticker Company EPS Forecast
ARNC Arconic Inc $0.29
CMI Cummins $3.46
CVS CVS Health $1.71
MPLX MPLX $0.61
PFE Pfizer $0.79
SYY Sysco $0.20
TRI Thomson Reuters USA $0.40
MPC Marathon Petroleum -$0.72
NS NuStar Energy $0.28
BR Broadridge Financial Solutions $1.67
ETRN Equitrans Midstream Corp $0.19
DD DuPont $0.77
LDOS Leidos $1.49
D Dominion Resources $1.08
EXPD Expeditors International Of Washington $1.00
RACE Ferrari $1.26
LPX Louisiana Pacific $2.67
CVLT Commvault Systems $0.49
ZBH ZIMMER BIOMET HDG. $1.51
UAA Under Armour Inc $0.04
XYL Xylem $0.37
UA Under Armour C share $0.04
INGR Ingredion $1.62
SEE Sealed Air $0.71
INCY YTE $0.65
BERY Berry Plastics $1.31
LGIH LGI Homes $2.37
BG Bunge $1.55
PCRX Pacira $0.58
RGEN Repligen $0.43
VSH Vishay Intertechnology $0.45
LANC Lancaster Colony $1.26
CTLT Catalent $0.76
KKR KKR & Co LP $0.62
CWH Camping World Holdings $0.54
RHP Ryman Hospitality Properties -$0.78
AME Ametek $1.02
WLK Westlake Chemical $1.56
IAA IAA Inc $0.46
VMC Vulcan Materials $0.41
GPN Global Payments $1.77
IPGP IPG Photonics $1.07
HSIC Henry Schein $0.83
IT Gartner $1.01
CRL Charles River Laboratories $2.19
HEP Holly Energy Partners $0.48
NXST Nexstar Broadcasting $3.11
MLM Martin Marietta Materials $0.51
LAMR Lamar Advertising $1.17
IDXX Idexx Laboratories $1.72
FSS Federal Signal $0.33
MIC Macquarie Infrastructure $0.48
NNN National Retail Properties $0.64
SABR Sabre -$0.51
MYGN Myriad Genetics -$0.10
BEN Franklin Resources $0.74
ZBRA Zebra Technologies $4.41
COP ConocoPhillips $0.57
ETN Eaton $1.25
HI Hillenbrand $0.92
CMP Compass Minerals International $0.72
VRSK Verisk Analytics $1.25
JBGS JBG SMITH Properties $0.31
LYFT Lyft Inc -$0.54
AMCR Amcor PLC $0.18
LSI LIFE STORAGE $1.01
STAG STAG Industrial $0.48
XP XP Inc $0.20
RPAI Retail Properties Of America $0.20
OUT Outfront Media -$0.17
MANT ManTech International $0.83
MED Medifast $2.72
PAYC Paycom Software $1.42
AKAM Akamai $1.30
LSCC Lattice Semiconductor $0.19
ARWR Arrowhead Research $0.34
AFG American Financial $1.74
TTEC TeleTech $1.00
ANET Arista Networks $2.38
GMED Globus Medical $0.36
INSP Inspire Medical Systems Inc -$0.65
ENLC EnLink Midstream -$0.02
IOSP Innospec $1.02
PVG Pretium Resources $0.21
HLF Herbalife $1.06
RDN Radian $0.67
TMUS T-Mobile Us $0.53
ESE ESCO Technologies $0.55
HST Host Hotels & Resorts -$0.15
PKI PerkinElmer $3.03
BKH Black Hills $1.60
ATVI Activision Blizzard $0.69
XLNX Xilinx $0.75
WTS Watts Water Technologies $0.98
AMRC Ameresco $0.10
CZR Caesars Entertainment -$1.77
MCY Mercury General $1.25
MRCY Mercury Systems $0.63
CPK Chesapeake Utilities $1.83
AIZ Assurant $1.96
LPSN LivePerson -$0.14
DOOR Masonite International $1.78
PXD Pioneer Natural Resources $1.82
EQC Equity Commonwealth $0.01
PEAK Healthpeak Properties Inc $0.39
DVN Devon Energy $0.35
RNG RingCentral $0.25
EPAY Bottomline Technologies $0.27
MTCH Match Group $0.46
JAZZ Jazz Pharmaceuticals $3.69
PRU Prudential Financial $2.68
NMIH NMI $0.59
DLB Dolby Laboratories $0.67
HASI Hannon Armstrong Sustnbl Infrstr Cap $0.40
MPWR Monolithic Power Systems $1.33
H Hyatt Hotels -$1.33
WU Western Union $0.45
DEI Douglas Emmett $0.43
EXAS Exact Sciences -$1.04
ALGT Allegiant Travel -$2.59
PTCT PTC Therapeutics -$1.59
Z Zillow $0.26
NRZ New Residential Investment $0.34
LITE Lumentum Holdings Inc $1.42
SU Suncor Energy USA $0.44
MELI MercadoLibre $0.40
HAE Haemonetics $0.67
TDG TransDigm $2.52
IOVA Iovance Biotherapeutics -$0.48
QTRX Quanterix -$0.32
VST Victory Square Tech -$2.04
GRFS Grifolsbarcelona $0.23
BBD Banco Bradesco $0.11
CHT Chunghwa Telecom $0.33

Wednesday (May 5)

IN THE SPOTLIGHT: GENERAL MOTORS

The auto manufacturer is expected to report its first-quarter earnings of $1.02 per share, which represents year-over-year growth of over 64% from $0.62 per share seen in the same quarter a year ago. The Detroit, Michigan-based company would post revenue growth of about 2% to around $33.3 billion.

“We are Overweight based on GM’s diversified portfolio, with multiple ways for GM to enhance shareholder value, through: EVs, ICE and Autonomy. GM also has leading North American margins, generates strong cash flow, and has a robust balance sheet,” noted Adam Jonas, equity analyst at Morgan Stanley.

“We believe that the market is underestimating the SOTP of the GM enterprise via: 1) Legacy ICE, 2) GM EV, 3) GM’s Ultium Battery business, 4) China JVs, 5) GM Finco, 6) GM Cruise, 7) hidden franchise value in brands such as Corvette and 8) GM Connected Services. GM management has a proven track record to allocate capital away from structurally challenged areas towards re-positioning the business model.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 5

Ticker Company EPS Forecast
UTHR United Therapeutics $2.60
HLT Hilton Worldwide $0.05
PNW Pinnacle West Capital $0.28
CERN Cerner $0.74
HFC HollyFrontier -$0.45
ODP Office Depot $1.02
AEIS Advanced Energy Industries $1.27
OMI Owens Minor $0.97
DNB Dun & Bradstreet $0.21
SMG Scotts Miracle-Gro $5.51
DOC Physicians Realty $0.27
WRK WESTROCK $0.62
GOLD Randgold Resources $0.26
TT Trane Technologies PLC $0.62
CIM Chimera Investment $0.31
SRE Sempra Energy $2.60
NYT New York Times $0.15
AVA Avista $0.85
ROCK Gibraltar Industries $0.61
SPR Spirit AeroSystems -$0.93
PEG Public Service $1.12
BWA Borgwarner $0.92
GM General Motors $1.02
JLL Jones Lang LaSalle $0.58
SBGI Sinclair -$2.18
EMR Emerson Electric $0.90
NI NiSource $0.77
ABC AmerisourceBergen $2.50
BRKR Bruker $0.32
FUN Cedar Fair -$1.89
IONS Ionis Pharmaceuticals -$0.47
EXC Exelon $0.42
WAT Waters $1.57
CDW CDW $1.54
CRTO Criteo $0.50
CLH Clean Harbors $0.26
HZNP Horizon Pharma $0.19
SPWR SunPower $0.00
FLEX Flextronics International $0.36
BKNG Booking Holdings Inc -$7.26
QLYS Qualys $0.69
ATO Atmos Energy $2.05
ALL Allstate $3.85
GIL Gildan Activewear USA $0.20
KLIC Kulicke And Soffa Industries $1.20
PTVE Pactiv Evergreen $0.03
LNC Lincoln National $1.48
TTGT TechTarget $0.37
RLJ RLJ Lodging -$0.26
ADPT Adeptus Health -$0.41
PRI Primerica $2.38
ZNGA Zynga $0.09
UNM Unum $1.01
HPP Hudson Pacific Properties $0.46
RUN Sunrun Inc -$0.03
WTRG Essential Utilities Inc $0.66
EPR EPR Properties $0.44
FLT Fleetcor Technologies $2.70
QRVO Qorvo $2.44
UGI UGI $1.72
CDAY Ceridian HCM Holding Inc $0.09
CW Curtiss-Wright $1.30
FMC FMC $1.52
CTSH Cognizant Technology Solutions $0.94
SIMO Silicon Motion Technology $0.94
AEL American Equity Investment Life $0.59
ANSS Ansys $0.85
MET MetLife $1.48
XEC Cimarex Energy $1.70
VAC Marriottacations Worldwide -$0.29
SRC Spirit Realty Capital New $0.73
TNDM Tandem Diabetes Care -$0.15
SJI South Jersey Industries $1.19
EQT EQT $0.28
ETSY ETSY Inc $0.84
MFC Manulife Financial USA $0.59
NBIX Neurocrine Biosciences $0.46
CCMP Cabot Microelectronics $1.94
EQH AXA Equitable Holdings Inc $1.23
MRO Marathon Oil $0.14
CF CF Industries $0.57
STN Stantec USA $0.42
RYN Rayonier $0.08
RSG Republic Services $0.86
FRT Federal Realty Investment $1.02
PDCE PDC Energy $0.83
PYPL PayPal $1.01
BFAM Bright Horizons Family Solutions $0.10
BE Bloom Energy Corp -$0.08
LBTYA Liberty Global Class A Ordinary Shares $0.09
HR Healthcare Realty $0.42
MTG MGIC Investment $0.42
NUVA NuVasive $0.33
ALB Albemarle $0.79
STAA STAAR Surgical $0.02
CPA Copa -$2.21
NUS Nu Skin Enterprises $0.72
TWO Two Harbors Investment $0.21
ACAD Acadia Pharmaceuticals -$0.54
RCII Rent-A-Center $1.11
LOPE Grand Canyon Education $1.67
ORA Ormat Technologies $0.40
KW Kennedy Wilson $0.27
LHCG LHC $1.26
SLF Sun Life Financial USA $1.08
FOXA Twenty-First Century Fox $0.57
FNV Franco Nevada $0.79
QTWO Q2 $0.07
UBER Uber -$0.56
SBRA Sabra Health Care Reit $0.40
RKT Rocket Cos. Inc. $0.89
MDU MDU Resources $0.20
TRMB Trimble Navigation $0.56
GDOT Green Dot $0.93
APA Apache $0.69
HUBG HUB $0.46
KAI Kadant $1.36
SBH Sally Beauty $0.16
BCH Banco De Chile $0.40
DAR Darling Ingredients $0.56
RARE Ultragenyx Pharmaceutical -$1.25
TRNO Terreno Realty $0.39
CCU Compania Cervecerias Unidas $0.32
CENTA Central Garden Pet $1.08
RCKT Rocket Pharma -$0.77
CUB Cubic $0.41
AVNS Avanos Medical Inc $0.18
FMS Fresenius Medical Care $0.45
UGP Ultrapar Participacoes $0.04
ELP Companhia Paranaense De Energia $0.03
LBTYK LIBERTY GLOBAL $0.09
FOX Twenty First Century Fox $0.58
NVO Novo Nordisk A Fs $0.79
BAK Braskem $1.38
AEBZY Anadolu Efes ADR $0.01
OMVJF OMV $0.97
SRPT Sarepta Therapeutics -$2.01
VIV Telefonica Brasil $0.13
ES Eversource Energy $1.10
GBT BMTC Group -$1.02

Thursday (May 6)

IN THE SPOTLIGHT: MODERNA

Moderna Inc, an American biotech company focused on drug discovery, is expected to report its first-quarter earnings of $2.36 per share, up about 700% from the same quarter a year ago. The Massachusetts-based biotechnology company’s revenue would surge to $1.97 billion.

“We are Equal-weight Moderna. While we believe there is long-term upside for Moderna, we believe the significant valuation increase associated with the success of the COVID-19 vaccine limits the near-term upside,” noted Matthew Harrison, equity analyst at Morgan Stanley.

“The company has taken an industrialized approach to developing mRNA-based therapeutics and has rapidly generated a broad pipeline of 21 programs, 11 of which have entered clinical development. We believe Moderna’s mRNA drug development platform is more diversified and scalable compared with competitors and is validated through broad partnerships with Merck and AstraZeneca. We see vaccines and rare diseases as the key valuation drivers of the company.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 6

Ticker Company EPS Forecast
PZZA Papa John’s International $0.55
AY Atlantica Yield -$0.13
SUN Sunoco $0.69
TECH Bio Techne $1.50
ZTS Zoetis $1.04
EPAM EPAM Systems $1.69
APTV Aptiv PLC $0.77
MGA Magna International USA $1.59
VER VEREIT $0.78
WCC Wesco International $0.76
BUD Anheuser-Busch $0.48
IRM Iron Mountain $0.64
LIN Linde PLC $2.26
BDX Becton, Dickinson and Co. $3.04
AES AES $0.31
BLD TopBuild Corp $1.93
HWM Howmet Aerospace Inc $0.20
BIP Brookfield Infrastructure $0.87
PENN Penn National Gaming $0.28
K Kellogg $0.95
PWR Quanta Services $0.74
BLL Ball $0.67
STWD Starwood Property $0.51
SEAS SeaWorld Entertainment -$0.83
CNP CenterPoint Energy $0.50
ALE Allete $1.11
WD Walker & Dunlop $2.01
COMM CommScope $0.31
PRLB Proto Labs $0.37
VG Vonage $0.05
AMRS Amyris -$0.16
BKI Black Iron Inc. $0.51
PBH Prestige Brands $0.79
W Wayfair Inc. $0.27
REGN Regeneron Pharmaceuticals $8.79
NSIT Insights $1.44
FIS Fidelity National Information Services $1.25
TRGP Targa Resources $0.15
EVOP EVO Payments Inc $0.12
CNQ Canadian Natural Resource USA $0.67
MUR Murphy Oil -$0.16
XRAY Dentsply International $0.55
IDCC InterDigital -$0.01
EVRG Evergy Inc $0.47
CAH Cardinal Health $1.57
EPC Edgewell Personal Care $0.62
THS TreeHouse Foods $0.35
STOR STORE Capital Corp $0.45
HAIN Hain Celestial $0.38
ADNT Adient PLC $0.59
MT Arcelormittal $1.57
OGE OGE Energy $0.18
NJR New Jersey Resources $1.17
MRNA Moderna Inc $2.36
BCRX BioCryst Pharmaceuticals -$0.26
FOCS Focus Financial Partners Inc $0.86
HII Huntington Ingalls Industries $2.52
IIVI Ii Vi $0.88
TPR Tapestry Inc $0.30
ARW Arrow Electronics $2.27
BLDR Builders Firstsource $0.81
INSM Insmed -$1.02
BECN Beacon Roofing Supply $0.01
NWSA News Corp $0.06
XLRN Acceleron Pharma -$0.83
QDEL Quidel $4.87
IHRT Iheartmedia -$0.44
AL Air Lease $1.01
Y Alleghany $4.65
AVLR Avalara Inc -$0.11
ALTR ALTAIR ENGINEERING $0.20
SEM Select Medical $0.65
CGNX Cognex $0.35
LYV Live Nation Entertainment -$1.77
TDC Teradata $0.46
CABO Cable One Inc $10.22
KWR Quaker Chemical $1.51
APLE Apple Hospitality $0.03
CLNE Clean Energy Fuels $0.01
ICUI ICU Medical $1.53
MCHP Microchip Technology $1.74
MTX Minerals Technologies $1.07
PTON Peloton Interactive, Inc. -$0.11
ANGI Angie’s List -$0.04
ENV Envestnet $0.61
CDK Cdk Global $0.68
REG Regency Centers $0.75
AIG AIG $0.99
SQ Square $0.16
MSI Motorola Solutions Msi $1.62
RVLV Revolve $0.13
SFM Sprouts Farmers Market $0.62
OLED Universal Display $0.67
PODD Insulet $0.06
AMH American Homes 4 Rent $0.31
PK Park Hotels & Resorts Inc -$0.55
EXPE Expedia -$2.52
TRIP TripAdvisor -$0.31
LNT Alliant Energy $0.67
FOXF Fox Factory $0.82
HTA Healthcare Of America $0.43
EXEL Exelixis $0.05
POST Post $0.55
CSOD Cornerstone OnDemand $0.42
SYNA Synaptics $1.87
ED Consolidated Edison $1.36
DBX Dropbox $0.30
IRTC iRhythm Tech -$0.87
DRH DiamondRock Hospitality -$0.14
MCK McKesson $5.01
YELP Yelp -$0.26
DIOD Diodes $0.78
CWK Cushman & Wakefield plc -$0.04
RGA Reinsurance Of America $0.07
STMP Stamps $1.63
EOG EOG Resources $1.50
BAP Credicorp USA $2.37
AAON AAON $0.24
MTD Mettler Toledo International $5.65
PCTY Paylocity $0.66
BCC Boise Cascade $2.50
NFG National Fuel Gas $1.21
MTZ MasTec $0.77
TPL Texas Pacific Land $5.77
FNF Fidelity National Financial $1.28
PHI Philippine Long Distance Telephone $0.61
NWS News $0.05
CYRX Cryoport Inc -$0.21
PPL PPL $0.61
NRG NRG Energy $1.64
NKTR Nektar Therapeutics -$0.75
GLUU Glu Mobile $0.07
PLUG Plug Power -$0.08
MNST Monster Beverage $0.61
NTLA Intellia Therapeutics Inc -$0.66
CTRE CareTrust REIT $0.36
ADT ADT $0.15
ARNA Arena Pharmaceuticals -$2.19
SWX Southwest Gas $1.83
MIDD Middleby $1.63
MRTX Mirati Therapeutics -$2.13
JOBS 51job $0.43
PFSI Pennymac Financial Services $5.79
KRTX Karuna Therapeutics -$1.06
MGEE Mge Energy $0.81
ITCI Intra Cellular Therapies -$0.81
XNCR Xencor -$0.77
SATS EchoStar -$0.02
DRNA Dicerna Pharmaceuticals -$0.28
IGMS IGM Biosciences -$0.98
RVNC Revance Therapeutics -$1.19
PAR Par Technology -$0.37
ACIW ACI Worldwide -$0.12
AG First Majestic Silver $0.07
ING Ing Groep $0.23
GFI Gold Fields $0.64
ABEV Ambev $0.03
AGO Assured Guaranty $0.56
MMS Maximus $0.82

Friday (May 7)

Ticker Company EPS Forecast
CI Cigna $4.37
VTR Ventas $0.02
LEA Lear $2.95
MD Mednax $0.16
AMCX AMC Networks $2.01
ENB Enbridge USA $0.57
CCJ Cameco USA -$0.08
TRP Transcanada USA $0.87
LBRDK Liberty Broadband Lbrdk $1.10
SPB Spectrum Brands $0.99
LBRDA Liberty Broadband $0.85
ITT ITT $0.87
FLR Fluor New $0.04
ESNT Essent $1.22
UNVR Univar Solutions Inc $0.32
HE Hawaiian Electric Industries $0.36
RICOY Ricoh Company -$0.08
IBP Installed Building Products $1.04
TU Telus USA $0.23
SSUMY Sumitomo ADR -$0.02
CNK Cinemark -$1.47
CVE Cenovus Energy USA -$0.02
LXP Lexington Realty $0.03

 

The Week Ahead – Central Banks, Economic Data, and COVID-19 in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 57 stats in focus in the week ending 7th May. In the week prior, 61 stats had been in focus.

For the Dollar:

In the 1st half of the week, private sector PMIs and ADP nonfarm employment change figures are in focus.

Expect the market’s favored ISM Non-Manufacturing PMI and ADP figures to be key.

The focus will then shift to the weekly jobless claim figures on Thursday ahead of the NFP numbers on Friday.

Expect nonfarm payroll figures and the unemployment rate to be the main area of focus late in the week.

On the monetary policy front, FED Chair Powell is scheduled to speak early in the week. The markets will be looking for any break from the script.

In the week, the Dollar ended the week up by 0.46% to 91.280.

For the EUR:

It’s also a busy the week on the economic data front.

Monday through Wednesday, private sector PMIs for Italy and Spain and German retail sales figures are in focus.

While retail sales are key, expect Italy and the Eurozone’s private sector PMIs to be key.

Late in the week, the German economy is back in focus.

German factory orders, industrial production, and trade data are due out. Following some disappointing GDP numbers last week, we can expect EUR sensitivity to the stats.

On the monetary policy front, ECB President Lagarde is due to speak at the end of the week…

The EUR ended the week down by 0.64% to $1.2020.

For the Pound:

It’s a relatively quiet week ahead on the economic calendar.

Finalized private sector PMIs will be in focus in a shortened week.

Expect any revisions to the services PMI to be key.

The main event of the week, however, is the BoE’s monetary policy decision on Thursday.

While the BoE is expected to stand pat, any dissent and hawkish talk give the Pound a boost.

The Pound ended the week down by 0.39% to $1.3822.

For the Loonie:

It’s a quiet week ahead on the economic calendar.

On Tuesday, trade data for March will influence ahead of April employment and Ivey PMI figures on Friday.

Expect the employment figures to be the key driver at the end of the week.

The Loonie ended the week up 1.51% to C$1.2288 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week ahead.

Key stats include manufacturing data at the start of the week and trade data on Tuesday.

Building approvals are also due out on Wednesday but will likely have a muted impact on the Aussie Dollar.

While we can expect the trade data to have the greatest impact, the RBA monetary policy decision is the main event of the week on Tuesday.

Any hawkish chatter and expect the Aussie Dollar to eye a return to $0.80 levels.

The Aussie Dollar ended the week down by 0.30% to $0.7716.

For the Kiwi Dollar:

It’s a relatively quiet week ahead.

On Wednesday, employment figures for the 1st quarter are due out ahead of building consent numbers on Thursday.

Expect the employment change figures to be key in the week. The markets will be looking from a pickup in hiring to support a sustainable economic recovery.

The Kiwi Dollar ended the week down by 0.51% to $0.7162.

For the Japanese Yen:

It is a quiet week ahead, with the Japan markets closed Monday through Wednesday.

Economic data is limited to finalized private sector PMIs for April. Barring any marked revision from prelim figures, however, we don’t expect too much impact on the Yen.

The Japanese Yen rose by 0.85 to ¥107.88 against the U.S Dollar.

Out of China

It’s a busy week ahead.

Through the 1st half of the week, the market’s preferred Caixin survey PMI numbers are due out. Expect the manufacturing PMI for April to have the greatest impact on Tuesday.

At the end of the week, April trade figures will also be in focus.

A continued surge in both imports and exports would support riskier assets.

The Chinese Yuan ended the week up by 0.33% to CNY6.4749 against the U.S Dollar.

Geo-Politics

U.S and China and U.S and Russia relations remain the main areas of focus in the week ahead.

The markets will also need to monitor any chatter from Iran, however.

Corporate Earnings

While a number of the big names have released earnings results, a large number are still scheduled to release results in the week ahead.

From the U.S, big names include CVS Health Corp (Tues), ICHOR Holdings (Tues), and FOX Corp (Wed).

US Stocks – Apple, Alphabet Drag Wall Street Lower on Friday, but S&P 500 Posts 5% Gain in April

The major U.S. stock indexes closed lower on Friday, dragged down by weakness in major tech-related companies despite the release of strong quarterly earnings reports earlier in the week.

Just one day after the S&P 500 Index posted a record high close, Apple, Google-parent Alphabet and Facebook each fell more than 1%, giving back gains following upbeat quarterly numbers this week.

Cash Market Performance

In the cash market on Friday, the benchmark S&P 500 Index settled at 4181.17, down 30.30 or -0.72%. The blue chip Dow Jones Industrial Average finished at 33874.85, down 185.51 or -0.55% and the tech-driven NASDAQ Composite closed at 13962.68, down 119.87 or -0.86%.

Major Index Monthly Performances

Most of the 11 major S&P 500 sector indexes were lower, with technology and materials down more than 1%, while energy dropped 2.2%.

Despite Friday’s weakness, the S&P 500 Index notched its third straight month of gains in April, adding more than 5% to the index as investors bet on a big economic and profit recovery from the pandemic. The NASDAQ posted its six consecutive month of gains, boosted by impressive results from big technology companies. The Dow Jones finished in positive territory for the third month in a row.

Stocks on the Move

Amazon, the last of Wall Street’s mega-cap tech companies to publish results, reported a record first-quarter profit. Despite the bullish news, the stock finished down 0.11%.

Twitter plunged on user growth results and second-quarter revenue guidance that fell short of analysts’ forecasts. Twitter shares fell 15.2% on Friday.

Apple came under some slight pressure after the European Union said the company’s App Store was breaching its competition rules. The shares dropped 1.5%.

Chevron Corp shed more than 3% after its first-quarter profit fell 29%, hit by weaker refining margins and production losses.

AbbVie Inc rose 0.6% after it reported strong results and raised its 2021 earnings forecast, helped by demand for its rheumatoid arthritis drug in the Unites States.

Earnings Updates

While mega-cap favorites posted largely strong earnings in the first quarter, their shares have struggled to maintain the upward trajectory that many had coming into reporting season.

Of the 303 companies in the S&P 500 that have reported so far, 87.1% have topped analysts’ earnings estimates, with Refinitiv IBES data now predicting a 46.3% jump in profit growth.

US economic News

Data on Friday showed U.S. consumer spending rebounded in March amid a surge in income as households received additional COVID-19 pandemic relief money from the government. March spending jumped a better-than-expected 4.2%, while personal incomes surged by a massive 21.1% amid more fiscal stimulus.

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

The Weekly Wrap – Impressive Stats from the U.S Give the Greenback a Much-Needed Boost

The Stats

It was a busier week on the economic calendar, in the week ending 30th April.

A total of 61 stats were monitored, following 46 stats from the week prior.

Of the 61 stats, 30 came in ahead forecasts, with 23 economic indicators coming up short of forecasts. There were 8 stats that were in line with forecasts in the week.

Looking at the numbers, 38 of the stats reflected an upward trend from previous figures. Of the remaining 23 stats, 22 reflected a deterioration from previous.

For the Greenback, a run of 3 consecutive weekly losses came to an end. In the week ending 30th April, the Dollar Spot Index rose by 0.46% to 91.28. In the previous week, the Dollar had fallen by 0.76% to 90.859.

Out of the U.S

It was a busier week on the economic data front.

In the 1st half of the week, core durable goods and consumer confidence figures were in focus.

The stats were skewed to the positive. Core durable goods reversed a 0.3% fall, with a 1.6% rise in March.

More significantly, the CB Consumer Confidence Index jumped from 109.0 to 121.7.

In the 2nd half of the week, GDP, jobless claims, personal spending, and inflation figures were in focus.

The stats were also skewed to the positive, supporting market optimism towards the economic outlook.

In the 1st quarter, the economy expanded by 6.4%, following 4.3% growth in the 4th quarter of last year.

Jobless claims figures were also positive, with initial jobless claims falling from 566k to 553k in the week ending 23rd April.

At the end of the week, personal spending also impressed, jumping by 4.2% to reverse a 1% fall from February.

Inflationary pressures were on the rise, with the FED’s preferred Core PCE Price Index rising by 1.8% in March, year-on-year. In February, the index was up by 1.4%. Following the FED’s assurances from earlier in the week, however, the uptick had a muted impact on the markets.

On the monetary policy front, the FED stood pat on policy, which was in line with expectations. FED Chair Powell continued to reassure the markets that there would be no tapering to the asset purchasing program or shift in interest rates any time soon.

The assurances had left the Greenback on the backfoot in response.

In the equity markets, the Dow and the NASDAQ fell by 0.50% and by 0.39% respectively, while the S&P500 eked out a 0.02% gain.

Out of the UK

It was a particularly quiet week.

There were no material stats to provide the Pound with direction in the week.

The lack of stats left the Pound in the hands of market optimism towards the reopening of the economy.

In the week, the Pound fell by 0.39% to end the week at $1.3822. In the week prior, the Pound had risen by 0.70% to $1.3876.

The FTSE100 ended the week up by 0.45%, partially reversing a 1.15% fall from the previous week.

Out of the Eurozone

It was a busy week on the economic data front.

In the 1st half of the week, German business and consumer confidence waned as a result of the latest spike in new COVID-19 cases.

In the 2nd half of the week, stats were also skewed to the negative weighing on the EUR.

While the French economy managed to avoid a contraction in Q1, both Germany and the Eurozone’s economies contracted.

The contraction was aligned with ECB President Lagarde’s outlook and the latest downward revision to Germany’s economic forecasts.

Inflation for the Eurozone and member states, unemployment figures from Germany and the Eurozone, and French consumer spending figures also drew attention.

Consumer spending hit reverse in France while inflationary pressures picked up in France and across the Eurozone.

Unemployment from Germany disappointed, while the Eurozone’s unemployment rate declined from 8.2% to 8.1%.

For the week, the EUR slipped by 0.64% to $1.2020. In the week prior, the EUR had risen by 1.00% to $1.2097.

The CAC40 rose by 0.18%, while the DAX30 and EuroStoxx600 ended the week down by 0.94% and by 0.34% respectively.

For the Loonie

It was a busier week.

Retail sales figures impressed mid-week, with core retail sales and retail sales both jumping by 4.8% in February. In January, core retail sales had fallen by 1.2% and retail sales by 1.1%.

At the end of the week, February GDP and March RMPI numbers were also in focus.

The economy expanded by a further 0.4%, following 0.7% growth in January. In March, the RMPI rose by 2.3% following a 6.6% jump in February.

Continued market reaction to the previous week’s BoC outlook and policy decision also supported the Loonie.

In the week ending 30th April, the Loonie jumped by 1.51% to C$1.2288. In the week prior, the Loonie had risen by 0.22% to C$1.2476.

Elsewhere

It was a bearish week for the Aussie Dollar and the Kiwi Dollar, with a Friday pullback leaving the pair in the red.

In the week ending 30th April, the Aussie Dollar fell by 0.39% to $0.7716, with the Kiwi Dollar ending the week down by 0.51% to $0.7162.

For the Aussie Dollar

It was a quiet week.

1st quarter inflation and private sector credit figures for March were in focus in the week.

The stats were skewed to the negative, pegging the Aussie back in the week.

In the 1st quarter, the trimmed mean CPI rose by 1.1% year-on-year, its lowest annual movement on record.

Private sector credit figures were positive, however, with both personal and business credit on the rise.

For the Kiwi Dollar

It was also a quiet week.

Trade data and business confidence figures were in focus.

A narrowing of New Zealand’s trade surplus was Kiwi Dollar negative, while a pickup in business confidence provided support late in the week.

The narrowing of New Zealand’s trade surplus came as imports surged at the end of the 1st quarter. Year-on-year, New Zealand’s trade surplus narrowed from NZ$2,380m to NZ$1,690m.

In April, the ANZ Business Confidence Index rose by 6 points from a prelim -8.4 to -2.0.

For the Japanese Yen

It was a busy week.

Mid-week, retail sales figures impressed. In March, retail sales were up by 5.2%, year-on-year. In February, sales had been down by 1.5%.

At the end of the week, industrial production increased by 2.2%, reversing a 1.3% decline from February.

Deflationary pressures picked up in April, however, with Tokyo core consumer prices falling by 0.2%, year-on-year. In March, core consumer prices had fallen by 0.1%.

The Japanese Yen fell by 1.33% to ¥109.31 against the U.S Dollar. In the week prior, the Yen had risen by 0.85% to ¥107.88.

Out of China

It was a quiet week on the data front.

NBS private sector PMIs were in focus at the end of the week. The stats were skewed to the negative, however, with both service and manufacturing sector growth easing in April.

The Manufacturing PMI fell from 51.9 to 51.1, with the Non-Manufacturing PMI falling from 56.3 to 54.9.

In the week ending 30th April, the Chinese Yuan rose by 0.33% to CNY6.4749. In the week prior, the Yuan had risen by 0.37% to CNY6.4963.

The CSI300 slipped by 0.23%, with the Hang Seng ended the week down by 1.22%.

Amazon Shares Hit Record High After A Blowout Quarter; Analysts Lift Price Targets

Amazon.com, the world’s largest online retailer, reported better-than-expected earnings and revenue in the first quarter of 2021 as online sales surged due to the COVID-19 pandemic, sending shares to a record high on Friday.

The multinational technology company based in Seattle said its net income increased to $8.1 billion in the first quarter, or $15.79 per diluted share, compared with net income of $2.5 billion, or $5.01 per diluted share, in first-quarter 2020. That was higher than the Wall Street consensus estimates of $9.49 per share.

The Seattle, Washington-based company said its net sales increased 44% to $108.5 billion in the first quarter, compared with $75.5 billion in first-quarter 2020. Operating income increased to $8.9 billion.

On the second quarter 2021 guidance, Amazon.com forecast net sales between $110.0 billion and $116.0 billion, or to grow between 24% and 30% compared with second-quarter 2020. Operating income is expected to be between $4.5 billion and $8.0 billion, compared with $5.8 billion in second-quarter 2020.

Following the upbeat results, Amazon shares rose about 2% to hit an all-time high of $3554.00 on Friday.

Analyst Comments

Amazon’s (AMZN) 1Q21 result reflected a broad beat, with rev 4% above cons, Op Inc +43% vs. cons, and strength across all segments, including International growth of +50% y/y, which paced above NA (+39% y/y) for the 2nd quarter in a row; while AWS & adv. accelerated. 2Q21 rev. and Op Inc. guide (high end) were well above consensus. We raised estimates, price target to $4,600 from $4,400, reiterate Outperform,” noted John Blackledge, equity analyst at Cowen.

Amazon Stock Price Forecast

Thirty-four analysts who offered stock ratings for Amazon in the last three months forecast the average price in 12 months of $4,300.00 with a high forecast of $5,500.00 and a low forecast of $3,750.00.

The average price target represents a 21.85% increase from the last price of $3,529.04. All of those 34 analysts rated “Buy”, according to Tipranks.

Morgan Stanley gave the base target price of $4,500 with a high of $5,300 under a bull scenario and $2,700 under the worst-case scenario. The firm gave an “Overweight” rating on the e-commerce giant’s stock.

Amazon’s high-margin businesses continue to allow Amazon to drive greater profitability while still continuing to invest (last-mile delivery, fulfillment, Prime Now, Fresh, Prime digital content, Alexa/Echo, India, AWS, etc),” noted Brian Nowak, equity analyst at Morgan Stanley.

Amazon Prime membership growth drives recurring revenue and positive mix shift. Cloud adoption hitting an inflection point. Advertising serves as a key area for both further growth potential and profitability flow-through.”

Several other analysts have also updated their stock outlook. BofA raised the stock price forecast to $4360 from $4150. Canaccord Genuity raised the target price to $4400 from $4100. UBS lifted the price objective to $4350 from $4150. Oppenheimer upped the target price to $4400 from $4200. Raymond James increased the target price to $4125 from $4000. JP Morgan raised the target price to $4,600 from $4,400.

Moreover, Stifel lifted the target price to $4400 from $4000. Deutsche Bank raised the target price to $4500 from $4250. Truist Securities lifted the target price to $4000 from $3750. BMO increased the target price to $4300 from $4200. Mizuho upped the target price to $4400 from $4000. Guggenheim lifted the target price to $4,200 from $4,000. Wedbush lifted the target price to $4,300 from $4,000.

Check out FX Empire’s earnings calendar