We're well into November, and there have been numerous big movers, significant technical events, earnings preview and notable corporate news! This article covers a brief rundown of this week's top U.S. Market pivotal movement written by the head of our North American Research Desk, Gary Christie.
The S&P 500 gained 2.13% last week.
The S&P 500 remains bullish after breaking above the 50% fibonacci retracement level from the swing high of 2940 and low of 2600. The index also pushed above its 200-day moving average with a gap open higher on Nov 7. The RSI has broken above its 50 neutral level and is indicating upside momentum. Our stop-loss pivot is now set at 2735 to test the 20-day moving average as support with targets of 2865 and the record high of 2940 in extension. The 61.8% fibonacci resistance level is acting as resistance in the short term near the 2816 level.
On a longer time horizon (weekly chart), the SPX pushed back above its 50-week moving average. The RSI broke above its 50 level indicating upside momentum. As long as Nov lows hold at 2600 we anticipate further upside to test record highs at 2940 and then 3100 in extension.
Looking at the VIX, we anticipate volatility to contract as key resistance is identified at the gap 20 level with downside targets of 15.9 and 13.4 in extension.
Regarding the weekly sector performance, the best performing stocks were in the Health Care Equipment & Services (+4.4%), Insurance (+3.92%) and Pharmaceuticals, Biotechnology & Life Sciences (+3.7%) sectors.
We had some big movers last week. Here's a look at the 9 most notable:
- Coty Inc (COTY -22.75% WoW to $8.49) reported 1Q adj. EPS up 11% YoY to $0.11 (estimated $0.08) on net revenue down 9.2% YoY to $2.03B (forecasted $2.17B). Net loss improved by 39% YoY to $12.1M. In other news, the Co declared a quarterly cash dividend of $0.125 per common share payable on December 4th to shareholders of record on November 30th. Finally, the Co was cut to "equal-weight" from "overweight" at Morgan Stanley. Besides, the Co printed a new 52w low.
- Activision Blizzard (ATVI -20.26% WoW to $55.01) announced 3Q adj. EPS of $0.42 vs. $0.47 a year ago on net revenue of $1.51B from $1.62B in the previous year. The Co sees FY adj. EPS of $2.58 (expected $2.62) and expects FY adj. revenue of $7.475B (forecasted $7.48B). Finally, the Co anticipates 4Q adj. EPS of $1.27 (estimated $1.31) and expects 4Q adj. revenue of $3.05B, aligned with expectations.
- TripAdvisor (TRIP +18.03% WoW to $63.3) reported 3Q adj. EPS of $0.72 (estimated $0.48) vs. $0.36 a year ago on revenue of $458M (forecasted $469.4M) from $439M in the previous year. Net income jumped 176% YoY to $69M. Hotel revenue declined by 2% YoY to $305M while non-hotel revenue advanced by 20% YoY to $153M. The Co reached a new 52w high.
- Wynn Resorts (WYNN -11.97% WoW to $98.32) released 3Q adj. EPS of $1.68 (consensus $1.67) vs. $1.52 a year ago on net revenue of $1.71B (forecasted $1.67B) from $1.55B last year. Adj. net income rose to $182M from $156M in the prior year and adj. property EBITDA increased to $504M from $473M. The Las Vegas adj. EBITDA declined by 37% YoY to $95.3M, lower than expectations of $136.9M. The Co said it expects to open Encore Boston Harbor, a $2.6B project, in mid-2019. Also, the Co also announced the appointment of Philip G. Satre as Chairman. Finally, the Co approved a cash dividend of $0.75 per share payable on November 30th to stockholders of record as of November 21st.
- QUALCOMM (QCOM -10.44% WoW to $56.72) announced 4Q adj. EPS of $0.90 (estimated $0.83) vs. $0.92 a year ago on adj. revenue of $5.83B (expected $5.54B) from $6B in the prior year. Adj. net income fell 7% YoY to $1.3B. The Co forecast 1Q adj. EPS of $1.05 - $1.15 (consensus $0.93) and revenue of $4.5B - $5.3B (expected $5.56B). The Co said: "Beginning in the 3Q 2017, GAAP and Non-GAAP results have been negatively impacted by our dispute with Apple and its contract manufacturers (who are our licensees). We did not record any QTL (Qualcomm Technology Licensing) revenues in fiscal 2018 or the 3Q or 4Q of fiscal 2017 for royalties due on sales of Apple's products."
- Michael Kors (KORS -18.03% WoW to $47.78) posted 2Q adj. EPS of $1.27 (estimated $1.1) vs. $1.33 a year ago on revenue up 9.3% YoY to $1.25B (forecasted $1.26B). Net income diminished by 32% YoY to $137.6M. The Co raised its FY guidance on adj. EPS to a range of $4.95 - $5.05 (expected $5.02) compared to the previous view of $4.9 - $5 and expects FY revenue to reach $5.13B, lower than estimates of $5.14B.
- Cimarex Energy (XEC +11.87% WoW to $90.32) released 3Q adj. EPS of $1.99 (estimated $1.6) vs $1.09 a year ago on revenue of $591M from $464M a year earlier. Oil sales rose to $342M from $231M in the prior year period while production rose to 219Mboe/d from 191Mboe-d (estimated 213Mboe/d). The Co sees 4Q production volumes of 238-247 mboe/d (forecasted 238.12) and raised its FY production guidance to 218 - 221 mboe/d (expected 217.04) from the prior view of 209 - 216 mboe/d.
- DXC Technology (DXC -12.22% WoW to $62) posted 2Q adj. EPS of $2.02 (estimated $1.94) vs $1.67 a year ago on revenue of $5.01B (estimated $5.30B) from $5.45B a year earlier. Adjusted EBIT margin was 15.9%, compared with 13.6% in the prior year. The Co sees FY19 revenue reaching $20.7B - $21.2B (forecasted $21.6B). Besides, the Co printed a new 52w low.
- Mylan (MYL +16.64% WoW to $36.95) reported 3Q adj. EPS of $1.25 (estimated $1.18) vs $1.1 a year ago on revenue of $2.86B (estimated $2.91B) from $2.99B a year earlier. The Co mentioned that the 14% drop in North American net sales was primarily due to new accounting standards, a decline in EpiPen sales and more. In other news, the Co was raised to "buy" from "neutral" at Bank of America.
Earnings preview this week:
- HD: On Tuesday, Home Depot is expected to report 3Q EPS of $2.27 vs. $1.84 last year on revenue of $26.2B compared to $25B in the previous year. The Co was downgraded to "neutral" from "outperform" at Credit Suisse. From a technical point of view, the RSI is below 50 while the MACD is negative and above its signal line. The configuration is mixed. Moreover, the share stands below its 20 and 50 day MA (respectively at 183.58 and 197.15). We expect to reach higher levels towards $195.5 with a stop-loss at $172.1.
- M: On Wednesday, Macy's is likely to announce 3Q EPS of $0.136 vs. $0.23 a year ago on revenue of $5.4B from $5.3B a year earlier. In other news, the Co was cut to "sell" from "hold" at Morningstar. Technically speaking, the RSI is above 50 while the MACD is positive and above its signal line. The configuration is positive. Moreover, the stock is above its 20 and 50 day MA (respectively at 33.44 and 34.49). Finally, Macy's has crossed above its upper daily Bollinger band (36.11). We are looking for prices to reach our next target of $40.3 with a stop-loss at $33.7.
- WMT: On Thursday, Walmart is anticipated to post 3Q EPS of $1.01 vs. $1 last year on higher revenue of $125.5B from $123.2B in the prior year. Also, the Co recently acquired the lingerie site Bare Necessities. Terms were undisclosed. From a chartist point of view, the RSI is above 50 while the MACD is positive and above its signal line. The configuration is positive. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at 97.51 and 96.16). As long as the stock is trading above $98.1, we anticipate further upside towards $106.6.
- NVDA: On same day, Nvidia is awaited to unveil 3Q EPS of $1.92 vs. $1.33 a year ago on revenue of $3.2B from $2.6B in the previous year. In other news, the Co was raised to "overweight" from "neutral" at JPMorgan. Looking at the chart, the RSI is below 50 while the MACD is above its signal line and negative. The configuration is mixed. Moreover, the share stands below its 20 and 50 day MA (respectively at 220.08 and 251.87). We are looking at a higher target of $262 and a stop-loss at $192.2.