This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
Otherwise, enjoy the column!
Subscribe to the Monster Stock Market Commentary to get the Weekly Monster Market Commentary and join the 3,417 subscribers getting it for FREE!
Apple, Amazon, Alphabet, Qorvo, Regeneron, Dollar and Bitcoin
It was all about earnings today, with Apple, Amazon, and Alphabet reporting results after the close. But they weren’t the only newsmakers, with Qorvo surging by nearly 16 percent, Regeneron breaking down, and the dollar hanging on for its life, will bitcoin continues to melt.
It seems clear the market was on a wild goose chase for the past few weeks as most of the analyst community and media got the significant slashing of iPhone shipments wrong. Admittedly the Apple quarter was no blow-out, but it was not a disaster, the reports that suggested 20 million iPhone’s would be slashed from production. The results were better than the market had anticipated because shares of Apple are up about 3.5 percent in the after-hours to $173.50.
I think it boils down to this, the Apple supplier’s like Broadcom, seem much more reliable than any analysts or reporter. Broadcom gave very strong guidance when it reported in mid-December, and then basically told us that wireless was not going to be as strong going forward when it pre-release yesterday morning. That was almost exactly what we got today when Apple reported revenue and guidance that fell just shy of estimates. But like I said at the top, it wasn’t the disaster some had been expecting.
But even more importantly, Apple was able to hold the uptrend line, and it was never broken. That is the critical piece, and because of that, the outlook going forward seems to suggest a higher stock price.
Amazon topped expectations as well, on strong revenue of just over $60 billion. The amount of top-line revenue growth was tremendous for a company of this size, nearly 38 percent.
Share dropped by about 4.5 percent during the day, falling right to its uptrend. But shares were trading nearly 6 percent higher after hours.
Alphabet was modestly lower, by only 2.5 percent after it reported results. Revenue was strong, but earnings missed. The topline growth was very strong, with growth of 24 percent. But the one issue and the reason they likely missed estimates was that cost of revenue grew by nearly 34 percent, hurting margins.
Considering this stock was up by nearly 11 percent so far in 2018, the decline doesn’t seem like a big deal.
The other day we mentioned Qorvo rose reasonably sharply, despite no news. The stock reported results after the close yesterday, and share surged by over 16 percent today following that announcement. The conference call was what got the party going. Specifically, it was this exchange between an analyst and CEO that caught my attention early this morning, when reading the call.
Okay, thank you. And then further ramp at your largest customer in the second half of calendar ‘18 do you expect those content gains to be let’s say more or less than what you saw in this past ramp?
This is Eric. I will take that. We are currently projecting we will have the largest actual generation-over-generation content increase we have seen driven by many product categories and then we see tuning continuing to increase, envelope tracking as well as BAW-based product.“
Now we know why share jumped on the January 30, for no clear reason.
[amazon_link asins=’B001KR0G2Y’ template=’ProductAd’ store=’us-blob’ marketplace=’US’ link_id=’f37e8b3e-07bd-11e8-90a6-b90b34aeeea7′]
The NASDAQ Biotech ETF ($IBB) held $113.5 just as we expected, and as long as it stays that is a good thing.
The real test will come tomorrow because Amgen shares were down about 2 percent after hours. To make matter worse Regeneron, fell by nearly 5.5 percent today, while Celgene shares continue to struggle. It means leadership in the group is going to have to come from Gilead or Biogen. Otherwise, some other companies will need to step up.
I fooled myself into thinking that when Regeneron traded sideways through a downtrend, it would start a breakout. But there is no breakout, and now shares are nearing a massive technical breakdown. I fear that a meaningfully decline below $350, could trigger shares falling to nearly $275. I’m not always right, but the most important thing is knowing when you are wrong.
The Dollar index continues to fight for its survival and is clinging to whatever support exist at 88 on the index. If it breaks 88, it has a lot of room to fall, back to 80.
Finally, Bitcoin continues to melt, I said back in December it was going to 7,700, and we are nearly there. But I’m beginning to think 5,650 may come into play.
[amazon_link asins=’B001RTSGRM,B0027VSU9S’ template=’ProductGrid’ store=’us-blob’ marketplace=’US’ link_id=’ddac9aaa-07bd-11e8-b496-4d0ce69fcd2f’]
Mott Capital’s Reading The Markets – An In-depth Global Macro Stock Market Commentary – In Video Format – See How Michael Dissects The Markets
Free Articles Written By Mike:
Join our 3,417 Daily Subscribers And Get This Commentary In Your E-Mail! Subscribe
[vc_tweetmeme type=”follow” follow_user=”michaelmottcm” show_followers_count=”true” large_button=”true”]
Michael Kramer and the clients of Mott Capital own shares of GOOGL
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.
© 2018 Mott Capital Management, LLC. Use, publication or reproduction in any media prohibited without the permission of the copyright holder.
Tags: #APPLE #AMAZON #ALPHABET #QORVO #BIOTECH #REGNERNON #BITCOIN #DOLLAR