Feb 23, 2017 - Market Update

Short recap

Asian stocks took a breather

Europe opened mixed

FOMC Minutes showing cautiousness (not to forget that the meeting took place right after Trump inauguration that was accompanied with huge uncertainty)

But lots has happened since then

May rate hike priced at 50%

10-yr US Trys yield at 2.40% after FOMC

FR elections: Bayrou pulling out and expressing support for Macron

GE-FR spreads down by 10 bps as a reaction

Demand for Bunds (politically driven vs strong momentum in stocks from good macro data)…something fishy here

EURUSD – experienced short squeeze on the news but jump was more about hitting strong support around psychological 1.0500 level

AUDUSD – not sure about the direction

Reflation and commodity story to push higher

Rate spreads to weight on the cross

Nissan Motors – Carlos Ghosn to step down as CEO after 15 yrs with the company

Airbus looking at easing penalties from EU govs for delay in military aircraft contract

Tesla to start Model 3 production in Sep, reporting smaller loss

Bayer expecting agri products (pesticides) business flat this year

Focussing on Monsanto takeover completion (USD 66 bln)

More HFs warning about Trump stock rally being overdone

While EU political risks not priced in

UK Brexit – Australia and Israel to expand trade and investments

US Trs Sec Mnuchin making vague comments about effects of strong USD

UK and Canadian regulators to assist FinTech

Goldman Sachs expecting crude oil stocks to keep falling

OPEC is tightening but US shale production is rising on better effectiveness and cheap funding

Don’t really see the signs of improved demand

Commodities need more real demand & lower inventories to rally further

Most vulnerable are copper and longs in oil

Data

GE: Gfk Consumer Climate Index – out slightly higher

UK: CBI Distributive Trades Index as a leading indicator for retail spending should point slightly higher

US: Initial/Continuing weekly unemployment claims – expected marginally higher

US: Chicago Fed National Activity Index – expected slightly higher

US: FHFA House Price Index

US: Kansas City Fed Manufacturing Index

ECB Praet speaking (0855)

Atlanta Fed Lockhart speaking (1335) – likely to provide a recap of his 10 yrs at Fed as he retires soon

Dallas Fed Kaplan (voter) speaking (1800)

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

  

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Stocks - Q2 Earnings note

After the positive start mostly with financials and tech companies we looked at the results of more real economy companies last week. The financials had a decent quarter, maybe also on the back of Brexit referendum market volatility, despite being hit by low ROE reflecting the low interest rates environment. The consumer staples on the other hand showed us that the consumer confidence was hit by the mix of Brexit referendum, security/terrorism issues and weaker global growth.

Last Week

Financials: BofA, Goldman Sachs and Morgan Stanley had better results but the low interest environment is hurting their profitability.

Microsoft was a nice surprising with beating on cloud side, airline companies both from Europe and US suffer from higher fuel prices and lower revenue per available seat mile, and not being very positive about upcoming quarter due to terrorist affecting tourism issues.

General Motors was out with better earnings and raising full year outlook.

Starbucks Corp – EPS was as expected, revenue slightly lower. Brexit, global uncertainty and terrorism having impact on business.

This Week

Monday

Julius Baer Group Ltd – estimated EPS 1.61, -9.4% Y/Y; Revenue 1 379 mln

Gilead Sciences – estimated EPS 3.02 -4.2% Y/Y; Revenue 7 783 mln

Ryanair Holdings PLC – estimated EPS 0.22, +21.2% Y/Y; Revenue 1 695 mln

Tuesday

Eli Lilly & Co – estimated EPS 0.86, -4.9% Y/Y; Revenue 5 154 mln

The growing research cost vs growing sales…

Caterpillar Inc – estimated EPS 0.96, -24.5% Y/Y; Revenue 10 128 mln

Apple Inc – estimated EPS 1.39, -24.9% Y/Y; Revenue 42 086 mln

Twitter Inc – estimated EPS 0.09, +30.0% Y/Y; Revenue 609 mln

Expecting no big surprise in stagnating user growth.

Freeport-McMoRan Inc – estimated EPS -0.01, -107.9% Y/Y; Revenue 3 686 mln

United States Steel Corp – estimated EPS -0.50, +36.5% Y/Y; Revenue 2 678 mln

Orange SA – estimated EPS 0.29, -22.0% Y/Y; Revenue 20 124 mln

Verizon Communications Inc – estimated EPS 0.92, -11.3% Y/Y; Revenue 30 730 mln

Wednesday

Fiat Chrysler Automobiles NV – estimated EPS 0.42, +45.0% Y/Y; Revenue 29 326 mln

Marriott International Inc/MD – estimated EPS 0.98, 19.3% Y/Y; Revenue 3 897 mln

The strong numbers from US, Brexit impact and threats of terrorism as well as merger with Starwood Hotels will be the main themes here.

Pegueot SA – estimated EPS 0.86, -19.0% Y/Y; Revenue 28 297 mln

Coca-Cola Co/The – estimated EPS 0.58, -7.3% Y/Y; Revenue 11 647 mln

Loblaw Cos Ltd (CA) – estimated EPS 0.94, +10.5% Y/Y; Revenue 10 760 mln

Statoil ASA – estimated EPS 0.10, -66.1% Y/Y; Revenue 12 146 mln

Banco Santander SA (ES) – estimated EPS 0.11, -8.3% Y/Y; Revenue 10 864 mln

Deutsche Bank AG (DE) – estimated EPS 0.54, -60.3% Y/Y; Revenue 8 286 mln

Bayer AG (DE) – estimated EPS 2.02, +2.1% Y/Y; Revenue 12 082 mln

GlaxoSmithKline PLC (GB) – estimated EPS 0.21, +21.4% Y/Y; Revenue 6 347 mln

Air France-KLM (FR) – estimated EPS 0.44, +67.3% Y/Y; Revenue 6 225 mln

Airbus Group SE (FR) – estimated EPS 0.95, 218.1% Y/Y; Revenue 16 513 mln

Boeing Co/The – estimated EPS 2.27, +40.2% Y/Y; Revenue 24 060 mln

CGI Group Inc (CA) – estimated EPS 0.88, +10.3% Y/Y; Revenue 2 668 mln

Facebook Inc – estimated EPS 0.82, +63.2% Y/Y; Revenue 6 009 mln

The higher spending on advertisements and video ads will not be unnoticed.

Nintendo Co Ltd (JP) – estimated EPS -64.69, -193.8% Y/Y; Revenue 70 440 mln

BASF SE (DE) – estimated EPS 1.31, -11.9% Y/Y; Revenue 15 290 mln

Goldcorp Inc (CA) – estimated EPS 0.03, -62.5% Y/Y; Revenue 915 mln

T-Mobile US Inc – estimated EPS 0.22, -46.1% Y/Y; Revenue 9 001 mln

Thursday

Amazon.com Inc – estimated EPS 2.37, +146.7% Y/Y; Revenue 29 559 mln

The Amazon Web Services and cloud business will be reviewed by investors for further clues on future growth in highly competitive space.

Expedia Inc – estimated EPS 0.76, -14.8% Y/Y; Revenue 2 243 mln

The result of higher bookings in US will be compared with recent acquisitions against the overall company figures.

Ford Motor Co – estimated EPS 0.60, +27.7% Y/Y; Revenue 38 278 mln

The market will check on North American sales that were strong in Q1 and good results from Europe.

Renault SA (Fr) – estimated EPS 6.30, +23.0% Y/Y; Revenue 24 11 mln

Volkswagen AG (DE) – estimated EPS 5.37, 0.8% Y/Y; Revenue 53 848 mln

Carrefour SA (FR) – estimated EPS 0.26, -17.0% Y/Y; Revenue 36 499 mln

Colgate-Palmolive Co – estimated EPS 0.69, -1.9% Y/Y; Revenue 3 860 mln

L’Oreal SA (FR) – estimated EPS 3.57, +1.2% Y/Y; Revenue 12 909 mln

Marathon Petroleum Corp – estimated EPS 0.97, -35.9% Y/Y; Revenue 16 589 mln

Royal Dutch Shell PLC (NL) – estimated EPS 0.27, -56.1% Y/Y; Revenue 60 820 mln

Suncor Energy Inc (CA) – estimated EPS 0.21,  -75.8% Y/Y; Revenue 7 136 mln

TOTAL SA (FR) – estimated EPS 0.68, -43.9% Y/Y; Revenue 27 255 mln

BNP Paribas SA (FR) – estimated EPS 1.52, -17.5% Y/Y; Revenue 10 786 mln

CNP Assurances (FR) – estimated EPS 1.52, -27.5% Y/Y; Revenue 27 933 mln

Credit Suisse Group AG (CH) – estimated EPS 0.12, -77.8% Y/Y; Revenue 5 266 mln

BAE Systems PLC (GB) – estimated EPS 0.18, +5.3% Y/Y; Revenue 8 661 mln

Cie de Saint-Gobain (FR) – estimated EPS 2.35, +12.2% Y/Y; Revenue 39 404 mln

Komatsu Ltd (JP) – estimated EPS 10949, -24.9% Y/Y; Revenue 1 700 830 mln

Schneider Electric SE (FR) – estimated EPS 1.63, -7.5% Y/Y; Revenue 12 272 mln

SolarCity Corp – estimated EPS -2.52, -56.5% Y/Y; Revenue 136 mln

Vinci SA (FR) – estimated EPS 1.62, +9.2% Y/Y; Revenue 17 652 mln

Alphabet Inc – estimated EPS 8.03, +14.8% Y/Y; Revenue 16 870 mln

The market can be eventually briefed on the impact of Brexit vote as company derives 9% of its revenue from UK and approx. 20% from Europe.

MasterCard Inc – estimated EPS 0.90, +6.1% Y/Y; Revenue 2 589 mln

Can we expect the same positive surprise as in case of Visa Inc.?

Dow Chemical – estimated EPS 0.5, -6.5% Y/Y; Revenue 11 226 mln

Investors will also be looking for an update merger with DuPont, especially from regulatory side.

SoftBank Group Corp (JP) – estimated EPS 644.83, +60.2% Y/Y; Revenue 9 059 473 mln

Friday

Mazda Motor Corp (JP) – estimated EPS 38.99, -36.6% Y/Y; Revenue 763 626 mln

Panasonic Corp (JP) – estimated EPS 11.26, -56.3% Y/Y; Revenue 1 822 373 mln

Sony Corp (JP) – estimated EPS -8.50, -112.1% Y/Y; Revenue 1 675 458 mln

Anheuser-Busch InBev SA/NV (BE) – estimated EPS 1.07, -12.3% Y/Y; Revenue 10 912 mln

Chevron Corp – estimated EPS 0.33, -60.8% Y/Y; Revenue 28 648 mln

The market is not expecting any deviation from industry trend on weaker commodity prices.

Enbridge Inc (CA) – estimated EPS 0.52, -13.7% Y/Y; Revenue 8 571 mln

Exxon Mobil Corp – estimated EPS 0.64, -36.3% Y/Y; Revenue 54 946 mln

Swiss Re AG (CH) – estimated EPS 1.95, -11.5% Y/Y; Revenue 8 836 mln

UBS Group AG (CH) – estimated EPS 0.32, +3.3% Y/Y; Revenue 7 073 mln

AbbVie Inc – estimated EPS 1.20, +10.9% Y/Y; Revenue 6 199 mln

Cigna Corp – estimated EPS 2.37, -6.9% Y/Y; Revenue 9 985 mln

Merck & Co Inc – estimated EPS 0.91, +5.9% Y/Y; Revenue 9 791 mln

Sanofi (FR) – estimated EPS 1.30, -8.0% Y/Y; Revenue 8 996 mln

Embraer SA (BR) – estimated EPS 1.45, --% Y/Y; Revenue 4 726 mln

Kawasaki Heavy Industries Ltd (JP) – estimated EPS 25.74, -6.6% Y/Y; Revenue 1 556 679 mln

MAN SE (DE) – estimated EPS 1.66, -10.1% Y/Y; Revenue 14 523 mln

Mitsubishi Heavy Industries Ltd (JP) – estimated EPS 40.21, +111.4% Y/Y; Revenue 4 372 182 mln

United Parcel Service Inc – estimated EPS 1.43, +5.7% Y/Y; Revenue 14 629 mln

Hitachi Ltd (JP) – estimated EPS 3.85, -66.2% Y/Y; Revenue 2 118819 mln

ArcelorMittal (LU) – estimated EPS 0.06, -45.9% Y/Y; Revenue 15 369 mln

Sumito Chemical Co Ltd (JP) – estimated EPS 48.13, -3.4% Y/Y; Revenue 2 029 531 mln

Electricité de France SA (FR) – estimated EPS 0.97, -27.0% Y/Y; Revenue 35 553 mln

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmail.com

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