by Ian Harvey
January 27, 2019
A Quick Review of Last
There was plenty of action for the short week due to a day short for the Martin Luther King Jr. holiday on Monday. Fourth-quarter earnings season was in full swing, there were constant talks based on the U.S.-China relations, the government shutdown situation with a final end to the longest government shutdown in U.S. history on Friday, and the Fed input with its balance sheet.
Corporate earnings reactions this week were mostly well-received, especially among blue chips. Despite China concerns Starbucks (SBUX) shares rose thanks to another strong quarter; but may still be in the firing line as the U.S.-China talks progress, and semiconductor stock Xilinx (XLNX) soared after its report.
IBM shares sank before reporting earnings; but proved analysts wrong in their pessimism to climb after the report; which may also due to a lot of investor optimism!
Procter & Gamble Co (NYSE: PG) the world's leading consumer staples company posted broadly positive earnings results that included some of its strongest sales growth in years.
Ford Motor Company (NYSE: F) missed quarterly earnings projections owing to pensions and layoff costs, its revenue met expectations.
Santa Clara, California based Intel Corporation (NASDAQ:INTC) shares dropped in the extended session Thursday after the chip giant’s quarterly revenue and outlook fell short of Wall Street expectations amid growing concern about trade and economic issues. Intel shares were down 6.7% after hours, following a 3.8% gain to close the regular session at $49.76 as chip makers staged a huge rally on strong earnings results.
And, shares of American Airlines (NASDAQ: AAL), which jumped 6% on Thursday in response to upbeat earnings news, flew a higher again Friday as well, closing the day up 3.9%.
For the week, the Dow Jones Industrial Average (DJI) finished up 0.1% at 24,737.20.
The S&P 500 Index (SPX) was down 0.2% at 2,664.76 for the week.
And the Nasdaq Composite (IXIC) was up 0.01% for the week at 7,164.86.
There won't be time for traders to rest, since this week brings not only FAANG earnings, but the next Fed meeting and high-level U.S.-China trade talks.
There will be about a quarter of the S&P 500, nearly half of the Dow Jones Industrials and three of the four biggest companies in the world reporting in the week ahead.
There will be heavy focus on mega-cap tech companies Apple, Microsoft, and Amazon reporting respectively on Tuesday, Wednesday and Thursday, not just because they are the biggest stocks, but because they represent growth and have been market leaders. Facebook, the sixth largest stock by market cap, also reports on Wednesday.
Analysts expect Amazon will see revenue growth of 19 percent, to $72.1 billion, driven by e commerce, web services and advertising.
earnings in the coming week, the Fed meets Tuesday and Wednesday, but it is not
expected to take any rate action. There is also the January employment report
Earnings to Watch…..
Caterpillar, Whirlpool, AK Steel, Crane, Ethan Allen, Graco, Brown and Brown, Reinsurance Group of America, Celanese
Apple, Verizon, 3M, Harley-Davidson, Amgen, Pfizer, Lockheed Martin, PulteGroup, LVMH, United Micro, Danaher, Corning, SAP, Stryker, eBay, Stryker, Advanced Micro Devices, KLA-Tencor, Xerox
Microsoft, Facebook, AT&T, Boeing, McDonald's, Anthem, Novartis, Qualcomm, Alibaba, PayPal, Wynn Resorts, Ameriprise, U.S. Steel, Cirrus Logic, Gentex, General Dynamics, Hess, Nasdaq OMX, T. Rowe Price, Invesco, Siemens, Avery Dennison, Check Point Software
Amazon, Blackstone, Mastercard, Raytheon, General Electric, Baker Hughes, Diageo, Altria, Unilever, Marsh and McLennan, Hershey, International Paper, Eaton, Sprint, AmerisourceBergen, Fortune Brands, Conoco Phillips, DowDupont, Celgene, Aflac, Northrop Grumman, Valero Energy, Xcel Energy, Sherwin-Williams, Tractor Supply, Symantec, Cypress Semiconductor
ExxonMobil, Chevron, Merck, Cigna, Aon, Deutsche Bank, Sony, Honda Motor, Illinois Tool Works, Johnson Controls, Weyerhaueser, KKR, Booz Allen Hamilton, Madison Square Garden, LyondellBasell, Roper Industries
Economic Data to Watch…..
*Advance economic indicators, Q4 GDP, Personal income/spending, construction spending are among the reports delayed by government shutdown.
CONTROL OF EMOTIONS AND LESS PANIC WILL HELP YOUR PROFIT MARGIN!
OUT WHILST THE GOING IS GOOD!
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
YOU NEED TO BE IN IT TO PROFIT!
Options Trades to Consider Based on Expected Earnings Reports:
Tuesday, January 29, 2019
Advanced Micro Devices, Inc. (NASDAQ:AMD), a global semiconductor company, will report earnings after the market closes. The report will be for the fiscal Quarter ending Dec 2018. Based on 8 analysts' forecasts, the consensus EPS forecast for the quarter is $0.09 per share on revenue of $1.44 billion. The reported EPS for the same quarter last year was $0.06.
The same tailwinds which pushed AMD stock higher in 2018 remain intact today. The valuation is reasonable under realistic growth assumptions, the growth trajectory remains promising, and the company’s size relative to its addressable market implies further upside. There are also M&A rumors on the table.
Overall, there are reasons to believe that AMD stock is set have another big year, so long as certain tailwinds remain in play, AMD stock should have another strong showing in 2019.
Chipmaker Advanced Micro Devices was the top-performing stock in the S&P 500 for 2018. In calendar 2018, AMD stock rose 80%, versus a 6% drop for the S&P 500.
AMD has made a big push into the CPU server market with its EPYC chips. Estimates for how much server market share AMD has gained through EPYC most normally come in around 5%, or in the mid-single-digit range. With the launch of new 7nm EPYC Rome chips, AMD projects to keep stealing share from Intel in 2019. Many industry analysts and insiders see AMD’s share rising from 5% in 2018, to 10% or higher in 2019.
This is an extremely valuable market supported by secular growth trends in AI and data. If AMD can continue to grow share in this market, not only does that boost present-day financials, but it also adds visibility and firepower to the long-term growth trajectory. That is a winning combination which usually leads to a winning stock.
AMD has been steadily gaining GPU market share through its Ryzen and Radeon products. Notably, AMD just scored a big win when cloud giant Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) announced that its huge cloud gaming project would use AMD’s Radeon GPUs.
If AMD can continue to grow share in this market, this will provide a double tailwind thanks to boosted near- and long-term fundamentals. That combination could power AMD stock higher in 2019.
DON'T MISS OUT - MORE TO COME!
Don’t miss out – check out further options trades recommended for the week ahead by becoming a member of Stock Options Made Easy “Earnings Predictions”.
An Important Note: That these suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented.
If you wish to receive more options trading recommendations similar to this, which will help boost your portfolio strategy, check out the other memberships available at Stock Options Made Easy.
When To Exit A Trade Based On Earnings?.....
It is also worth considering, when options trading earnings reports – “Do we exit on already existing profits or leave the companies to report their earnings and hope for bigger profit?”
traders realize, there is a 50/50 chance that the company stock price could go
either way after reporting earnings – even if the report is good, the stock
price could reverse – and if you hold a call option, means depletion of an
already good profit if it exists. A similar situation can be found if you hold
a put option, and a report is not that sound (and you expect a profit from
this) but the stock price can, at times move upwards due to traders bias or
other external conditions......READ MORE.....
The Decision Is Yours!
Before You Trade Consider This Strategy……
"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.……continue reading this article……
”Success is simple. Do what's right, the right way, at the right time.”
Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.