Week 9 – 15 Oct 2017

watch Nightly Business Report Monday Tuesday Wednesday Thursday Friday 27 min.
watch Bloomberg Live TV watch Best of Bloomberg Technology 48 min.
watch Bloomberg: Private sector space programs 3 min. Article
watch CNBC: Focus on earning rather than spending 45 seconds.

read_this Our full report is made up of the following reports. If you prefer, you can hear each report separately.
read_this The stock market this week Impact
read_this Portfolio indices Impact
read_this Portfolio stocks: AAPL AMZN EBAY FB GOOGL GOOG PYPL TWTR V VMW

Portfolio Company Reporting Dates for Sep 2017 Quarter

Dates have not yet been announced for:

  • VMware: Q3/2017

read_this The stock market

Outlook (Reuters)

U.S. stock sectors that are particularly dependent on economic growth recently grabbed hold of the market’s rally and are poised to keep the reins should further signs of global expansion emerge.

Such sectors, including energy, industrials and financials, beat the S&P 500’s 1.9% gain in Sep 2017. Those sectors had previously lagged behind the benchmark S&P, which has climbed 14% this year while feasting on a steady diet of record highs. Instead, shares of technology and healthcare companies, whose profits are more impervious to economic down cycles, have led 2017’s rally.

The question for equity investors is now: Was September just a catch-up period for the lagging, cyclical sectors, or can an economic lift support a sustained run? “If it’s just a mean-reversion trade, then it’s probably going to last another few weeks and then we’re back to the old winners,” said Walter Todd, chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina. “If it’s something more fundamental, it should be longer lasting than that.”

A test comes next week, as Q3/2017 corporate earnings season kicks into high gear. Reports from industrial conglomerates General Electric and Honeywell International, railroads CSX Corp and Kansas City Southern and steel company Nucor Corp stand to yield insight into the economy’s health.

September’s stock action, which also included outsized gains for small-cap stocks, had echoes of the immediate aftermath of President Donald Trump’s election in Nov 2016.

The same areas showed strength on hopes that a Republican-led federal government would push through an agenda, including tax cuts and deregulation, that juices economic growth. Those trades faded as Trump struggled to rack up any significant legislative wins.

Now, investors say, September’s stock rally for those groups again stemmed at least in part from policy hopes, as Trump revved up his tax-reform push.

“In many ways, we began to replicate the market performance following Trump’s election,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

But an improving economic picture in the United States and globally lends confidence for the cyclical sector rally.

The Citi economic surprise index for the United States, a measure of economic data that can come in weaker or stronger than forecast, is around a 5-month high, with the barometer trending higher since hitting multi-year lows this summer.

This week, the International Monetary Fund upgraded its global economic growth forecast for 2017 by 0.1 percentage point to 3.6%, and to 3.7% for 2018, from its Apr 2017 and Jul 2017 outlook, driven by a pickup in trade, investment, and consumer confidence.

The U.S. Commerce Department last month revised its estimate for second-quarter GDP growth to 3.1%, up from 3%.

“We’ve just had better data,” said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis, who also points to indicators such as firming industrial commodity and oil prices and a rise in the Baltic Exchange’s main sea freight index. “Those things are all kind of reflecting a realism of economic momentum, not just a one-off, Trump pie-in-the-sky expectation about policy change,” Paulsen said.

Bets seemed to build on the cyclical sectors in the first week of Oct 2017, which saw flows into the largest sector exchange-traded funds for financials, industrials and energy, and outflows for technology and healthcare, according to Lipper data.

“There is some momentum developing in these underperforming sectors,” said Anthony Saglimbene, global market strategist at Ameriprise in Troy, Michigan.

Earnings results could sway that momentum. Technology, which has gained 29% this year, topping all sectors, is expected to post a 12.2% increase in Q3/2017 profits, more than twice the expected rise for cyclical groups such as industrials and materials.

Kate Warne, investment strategist at Edward Jones in St. Louis, said global growth ”hasn’t been strong enough for investors to feel comfortable that we will continue to see the earnings delivered by those companies in the way that tech and healthcare have consistently delivered stronger earnings. For the cyclicals to continue to outperform, we have got to see signs that economic growth globally is accelerating, even compared to what we have seen so far this year.Reuters

Market indices

indices

^ Market indices this week (mouseover for 12-month view) Chart: Google Finance

Index 13 Oct 17 Week 6 Oct 17 Month 29 Sep 17 Year 30 Dec 16
S&P500 2,553.17 0.15% 2,549.33 1.34% 2,519.36 14.04% 2,238.83
Dow Jones 22,871.72 0.43% 22,773.67 2.08% 22,405.09 15.73% 19,762.60
NASDAQ 6,605.80 0.24% 6,590.18 1.69% 6,495.96 22.71% 5,383.12

read_this Portfolio Indices

Index performance

indices

^ USD and AUD denominated indices over the past 52 weeks (mouseover for max view) Chart: Bunting

home This week’s performance

Index 13 Oct 17 Week 6 Oct 17 Month 29 Sep 17 Year 30 Dec 16
U S dollar index 2.843 1.16% 2.810 2.38% 2.777 35.04% 2.105
Australian dollar index 3.584 -0.35% 3.597 1.81% 3.521 23.8% 2.895

read_this Portfolio Stocks

AAPL: Apple, Inc 13 Oct 17 Change 6 Oct 17 home
Friday close $156.99 1.09% $155.30
P/E (historical) 17.84 Change 17.65
P/E (1 year fwd) 17.31 Change 17.25
Target (1 year) NASDAQ analysts’ consensus: $ 180 range: $ 140 to $ 208
Analyst recommendations 18 strong buy, 5 buy, 5 hold, 2 sell, 0 strong sell
Last earnings report Q3/2017 1 Aug 2017
Financials Google Finance
SEC filings Edgar Search CIK 0000320193
AAPL
^ Apple price movements this week (mouseover for 1-year view) Chart: Google Finance

AMZN: Amazon Com, Inc 13 Oct 17 Change 6 Oct 17 home home
Friday close $1,002.94 1.35% $989.58
P/E (historical) 254.55 Change 251.16
P/E (1 year fwd) 288.45 Change 282.67
Target (1 year) NASDAQ analysts’ consensus: $ 1173 range: $ 1100 to $ 1400
Analyst recommendations 24 strong buy, 4 buy, 4 hold, 1 sell, 0 strong sell
Last earnings report Q2/2017 27 Jul 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001018724
AMZN
^ Amazon price movements this week (mouseover for 1-year view) Chart: Google Finance

EBAY: Ebay, Inc 13 Oct 17 Change 6 Oct 17 home home
Friday close $38.35 -1.19% $38.81
P/E (historical) 5.79 Change 5.86
P/E (1 year fwd) 23.08 Change 23.63
Target (1 year) NASDAQ analysts’ consensus: $ 38 range: $ 31 to $ 45
Analyst recommendations 9 strong buy, 1 buy, 13 hold, 2 sell, 0 strong sell
Last earnings report Q2/2017 20 Jul 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001065088
EBAY
^ Ebay price movements this week (mouseover for 1-year view) Chart: Google Finance

FB: Facebook, Inc 13 Oct 17 Change 6 Oct 17 home home
Friday close $173.74 0.88% $172.23
P/E (historical) 39.58 Change 39.23
P/E (1 year fwd) 32.25 Change 32.01
Target (1 year) NASDAQ analysts’ consensus: $ 195 range: $ 140 to $ 230
Analyst recommendations 20 strong buy, 3 buy, 1 hold, 0 sell, 0 strong sell
Last earnings report Q2/2017 26 Jul 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001326801
FB
^ Facebook price movements this week (mouseover for 1-year view) Chart: Google Finance

GOOGL: Alphabet, Inc 13 Oct 17 Change 6 Oct 17 home home
Friday close $1,007.87 1.43% $993.64
P/E (historical) 36.58 Change 36.07
P/E (1 year fwd) 32.51 Change 31.84
Target (1 year) NASDAQ analysts’ consensus: $ 1075 range: $ 880 to $ 1250
Analyst recommendations 21 strong buy, 3 buy, 3 hold, 0 sell, 0 strong sell
Last earnings report Q2/2017 24 Jul 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001288776
GOOGL
^ Alphabet (GOOGL) price movements this week (mouseover for 1-year view) Chart: Google Finance

GOOG: Alphabet, Inc 13 Oct 17 Change 6 Oct 17 home home
Friday close $989.68 1.1% $978.89
GOOG
^ Alphabet (GOOG) price movements this week (mouseover for 1-year view) Chart: Google Finance

PYPL: PayPal Holdings, Inc 13 Oct 17 Change 6 Oct 17 home home
Friday close $68.66 3.95% $66.05
P/E (historical) 54.93 Change 52.84
P/E (1 year fwd) 50.63 Change 48.40
Target (1 year) NASDAQ analysts’ consensus: $ 67 range: $ 46 to $ 81
Analyst recommendations 22 strong buy, 2 buy, 8 hold, 0 sell, 0 strong sell
Last earnings report Q2/2017 26 Jul 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001633917
PYPL
^ Paypal price movements this week (mouseover for 1-year view) Chart: Google Finance

TWTR: Twitter, Inc 13 Oct 17 Change 6 Oct 17 home home
Friday close $18.63 4.37% $17.85
P/E (historical) 0.00 Change 0.00
P/E (1 year fwd) 0.00 Change 0.00
Target (1 year) NASDAQ analysts’ consensus: $ 16 range: $ 16 to $ 16
Analyst recommendations 4 strong buy, 0 buy, 16 hold, 0 sell, 3 strong sell
SEC filings Edgar Search CIK 0001418091
TWTR
^ Twitter price movements this week (mouseover for 1-year view) Chart: Google Finance

V: Visa, Inc 13 Oct 17 Change 6 Oct 17 home home
Friday close $108.66 1.81% $106.73
P/E (historical) 40.39 Change 39.68
P/E (1 year fwd) 31.61 Change 31.06
Target (1 year) NASDAQ analysts’ consensus: $ 111.5 range: $ 89 to $ 129
Analyst recommendations 20 strong buy, 3 buy, 2 hold, 0 sell, 0 strong sell
Last earnings report Q3/2017 20 Jul 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001403161
V
^ Visa price movements this week (mouseover for 1-year view) Chart: Google Finance

VMW: VMware, Inc 13 Oct 17 Change 6 Oct 17 home
Friday close $113.62 1.87% $111.53
P/E (historical) 35.96 Change 35.29
P/E (1 year fwd) 29.86 Change 29.44
Target (1 year) NASDAQ analysts’ consensus: $ 120 range: $ 87.5 to $ 130
Analyst recommendations 10 strong buy, 3 buy, 12 hold, 0 sell, 0 strong sell
Last earnings report Q2/2018 24 Aug 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001124610
VMW
^ VMware price movements this week (mouseover for 1-year view) Chart: Google Finance

home flag_australia FX: USD/AUD

usd/aud
^ AUD movements against the USD this week (mouseover for 1-year view) Chart: xe.com

Australian economic indicators Trading Economics

Australian economic charts RBA Chart Pack