EB Daily Market Report - Monday, January 27, 2020
Special Event
I'll be hosting our special "Q4 Earnings" webinar event today at 4:30pm EST. It'll be a session where I'll provide a look into several excellent earnings reports released over the past month, while also reviewing relative strength on dozens of upcoming earnings reports to gain a sense of those more or less likely to beat revenue and EPS expectations. This is a members-only event. The room will be open by 4:00pm EST and you can access it using the following link:
Hope to see you there!
Executive Market Summary
- Global equity markets are under pressure as coronavirus fears accelerate
- Japan's Nikkei Index ($NIKK) fell more than 2% overnight
- The German DAX ($DAX) is off 2.7% today
- Major U.S. indices are lower by 1.00% to 1.75%, currently the NASDAQ is the hardest hit at -1.73%
- Gambling and travel & tourism stocks are weighing on the consumer discretionary sector (XLY)
- Transportation ($TRAN) and semiconductors are also down significantly
- Crude oil ($WTIC) has fallen another 2.79% to $52.68 per barrel; energy (XLE) is down in sympathy
- Beneficiaries today include treasuries, the U.S. dollar, and precious metals
- We currently have no active trade alerts
Market Outlook
I've discussed on several occasions recently why the U.S. market was primed for a period of selling and/or consolidation and now we're getting it. Simply put, the stock market had become way too complacent. If there's any good news today, it's that almost all of the losses occurred at the opening bell. Since then, we've seen mostly sideways action. That tells me that there are plenty of buyers to soak up scared shares being sold. That doesn't mean we won't head lower as Wall Street can be brutal at times. Here's a quick look at the S&P 500 on its hourly chart:
If I connect the highs to establish an upper trend channel line and drag that same sloped line to lows, you see that they connect perfectly. I believe we're going higher in time, but if we fail to hold this channel support, and especially if we fail to hold the price support line near 3210, then I believe we've begun a more lengthy consolidation period, one that could span several weeks.
Sector/Industry Focus
Travel & tourism ($DJUSTT) is being spooked by coronavirus fears, which makes perfect sense. Should these virus fears grow, this industry group would be directly impacted. Here's the current chart:
The DJUSTT has already dropped 3%. Given the likelihood that the coronavirus fears expand before they get any better, this is a group that could easily see much further selling until key price support is reached closer to the 600 level. Be careful with this group.
Active Trade Alerts
We have no active alerts right now.
Strong Earnings ChartList (SECL)
I am in the process of updating the SECL and hope to send everyone a new link and password in the DMR tomorrow. So watch for that.
I think it's prudent to watch the market right now and avoid over trading. I'll likely take a look at the "new" SECL tomorrow for potential trade candidates.
Movers & Shakers
One area that is certainly bucking the trend of lower prices today is homebuilding ($DJUSHB). The fearful environment has sent traders flocking into treasuries, sending the 10 year treasury yield ($TNX) down 7 basis points to 1.61% at last check. New home sales were disappointing this morning, but overall housing reports have been mostly bullish of late and the lower interest rates won't hurt the group.
While I wouldn't be pulling the trigger on any stocks today, a company like DR Horton (DHI) just posted excellent quarterly results that beat Wall Street consensus estimates as to both revenues and EPS and is one to watch. DHI is up 2.5% today and is currently the 3rd best performer on the S&P 500.
Earnings Reports
Here are the key earnings reports for this week, featuring stocks with market caps of more than $10 billion. I also include a few select companies with market caps below $10 billion. Finally, any portfolio stocks (or active trade alerts) that will be reporting results are highlighted in BOLD. Please make sure you check for earnings dates for any companies you own or are considering owning:
Monday, January 27:
DHI, S, ELS, ARNC, BRO, PKI. Others less than $10 bil: WHR, JNPR, FFIV, BYND
Tuesday, January 28:
AAPL, PFE, SAP, UTX, LMT, SBUX, MMM, SYK, CNI, AMD, HCA, EQR, EBAY, PCAR, XLNX, MKC, BXP, MXIM, NUE, PFG, WRB, PHM, CHRW. Others less than $10 bil: MKSI, PII
Wednesday, January 29:
MSFT, FB, MA, T, NVS, BA, MCD, PYPL, TSLA, GE, MDLZ, ANTM, ADP, BBD, NOW, NSC, GD, LVS, ILMN, IBN, LRCX, PGR, BSBR, DOW, MPC, CP, TEL, IR, TROW, RCL, MPLX, SWK, ADM, ROK, GIB, GLW, AMP, ALGN, ESS, HES, NDAQ, MAA, WYNN, HOLX, MKTX, QRVO, VAR, DRE, IEX, ROL, URI, AVY, BSAC, TXT, PKG. Others less than $10 bil: DLB, KNX, CREE, SLAB, CRUS
Thursday, January 30:
AMZN, V, VZ, KO, RDS.A, AMGN, LLY, TMO, DHR, UPS, MO, NOC, RTN, EPD, VRTX, MMC, SHW, BIIB, EW, DD, TFC, BX, ROP, TOELY, VLO, XEL, EA, HSY, WEC, PH, ALXN, MSCI, APTV, RMD, NOK, CTVA, WDC, CMS, ABC, AJG, GWW, IP, AMCR, DOV, MMP, DGX, CE, BEN, OTEX, FICO, APO, TSCO, WRK, CPT, EMN. Others less than $10 bil: CY, RHI, PFPT, DECK, MUR
Friday, January 31:
XOM, CVX, HON, CHTR, CAT, CL, ITW, AON, PSX, JCI, LYB, IDXX, WY, IMO, CHD, KKR, BR, PSXP, BAH. Others less than $10 bil: GNTX, BERY, MAN
Economic Reports
December new home sales: 694,000 (actual) vs. 728,000 (estimate)
Happy trading!
Tom