The US retail sales rose 0.9% in April and 0.6% excluding autos, slightly above the consensus estimates. This is the fourth consecutive increase in monthly U.S. retail sales. The US consumer continues to shop but inflation is impacting its spending power. Also, after a long time, the market has greeted good news with a good bounce. S&P 500 is up 1.4%. Despite early morning pressure, the US market is trading with lots of strength.
The most impressive thing is the pick-up in volumes. Here are some stocks making interesting moves today.
Fundamentals driving stocks down. Example: Walmart
The stock market hates when companies deliver bad surprises. Walmart earlier guided for decent EPS growth this year and today drops a bombshell that EPS will decline by 1%. The stock is Gap down, now 8% down near the support level of $135. I would avoid the stock now considering too much safety money in the stock has to move out.
Do Good earnings matter? Home Depot says No
Home Depot posted excellent earnings, surprising analysts who expected declines. The company also raised full-year revenue guidance. This is how the stock has reacted 🙁
Warren Buffet now buys Citibank. Should you buy it?
Berkshire Hathaway in a recent regulatory filing has disclosed about taking a $3 billion stake in Citigroup. Berkshire purchased 55.2 million shares at an average cost per share was about $53.40. The stock is up 6% on this news. The stock is in a deep downtrend and I doubt this news will change the trajectory of the stock. The last high-profile purchase by Berkshire was Hewlett Packard. The stock has yet to breakout
Has AMD settled down in a range?
AMD’s last quarter EPS was $1.13, far exceeding analyst estimates of $0.91 a share. Revenue growth: 71% year over year.
AMD broke down below $100 and then declined to $84. Now since then and over the last one month, AMD has settled in a range and it seems to offer trading opportunities to both who love to buy at support and sell at resistance. See the AMD chart. Today AMD got an upgrade but in this kind of market, the last thing one can do is buy near highs. Do not mistake me, I still love AMD. It’s a great company that continues to grow with strong earnings momentum. Great companies should be bought near support in a bear market.
Nio: Should you pay attention to analyst upgrades?
Nio stock is up 7% today, thanks to the upgrade it got from BofA Securities yesterday. The other factors driving the stock are 1. China giving up on the zero covid policy and 2. George Soros has picked up a stake in the company. In a bull market, only one of the news would have been enough to buy the stock but right now, one is better off buying a stock just because somebody else is buying. The structure of the stock is extremely negative.
Rivian: Should you buy because Insiders are buying?
The answer would have been yes in normal times but not anymore. The price action is so depressing that it’s hard to develop a trading strategy for the stock. Yesterday Rivian’s CEO purchased 41,000 shares of Rivian and the stock is up 6% today.
Paramount Global is up 14% today
The streaming companies are having a terrible 2022. You cannot just blame Netflix for that but these companies continue to deliver disappointing earnings reports. Paramount Global earlier this month posed earnings where it missed revenue targets. What happened today that the stock is up 14%. The news is that Berkshire Hathaway now own 10% stake in the company. I am not going to buy the pop in the price but would add it to the watch list. There can be a potential opportunity here.
Why United Airlines is a buy?
The business momentum is strong for the Airline companies. United Airlines now says that it expects passenger revenue in the second quarter to rise as much as 25% from 2019. The stock is expected to climb back to $54
Aspen Technology is a Buy
I love when stocks do Gap up to a new high. They usually keep on moving higher. This is the story of AZPN.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers
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