Visa Hits All-Time High After Q1 Results

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Q1 earnings results for Visa Inc. beat expectations on both the top and bottom lines.

Visa posted earnings of 86 cents per share on Q1 revenues of $4.5 billion. Analysts’ expectations were for earnings of 78 cents per share on Q1 revenues of 4.278 billion, the higher revenue number reflects a 25% increase on year-on-year basis.

Visa shares have rallied over 3% today to an all-time of 85.40 as payment growth came in at $1.9 trillion, up 47% on a year-on-year basis for the three months ending September 30, 2016.

Looking ahead, Visa affirmed its positive outlook with annual net revenue growth expected in the 16 to 18% range for 2017.

Facebook Q4 Earnings

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Shares of Facebook traded to an all-time high of $137.00 just after posting better-than-expected Q4 earnings and revenue results.

The social media giant announced adjusted EPS of $1.41 per share on quarterly revenue of $8.81 billion. These numbers exceeded the street’s estimates of $1.31 per share on revenue of $8.532 billion.

In addition, Facebook announced that Daily active users increased 18% year-on-year to 1.23 billion, while monthly active users grew 17% to 1.86 billion.

However, during the earnings call, CFO, David Wehner indicated that expenses will increase in 2017.

Chart – Facebook

Exxon Q4 Results

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Shares of Exxon Mobil hit a 4-month low of $83.10 after the company missed Q4 earnings and revenue expectations.

The company announced earnings of 41 cents per share on revenue  of $61.1 billion. This compares to expectations of 70 cents per share on revenue of $61.4 billion.

The year-over-year data was mixed as Exxon earnings fell from 67 cents per share, but revenue rose from $59.8 billion against this time last year.

An upstream asset impairment charge of $2 billion, related to dry gas operations in the Rocky Mountain region, impacted Q4 as well as full-year earnings.

From a technical perspective we’re in a lower high structure with the next significant level of support near $80.00

Chart – Exxon

Apple Q1 Results

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Shares of Apple are up 3% to $125.00 as Q1 earnings and revenue beat expectations. The firm also announce that they sold a record 78.4 million iPhones over the three month period.

Earnings were announced at $3.36 per share on revenue of $78.4 billion. The street was expecting earnings of $3.22 per share and revenue of $77.3 billion.

To put these sales and earnings numbers into perspective: Q1 2017  iPhone sales generated 69% of the company’s total revenue. This compares to 2.5% in Q1 2008.

One of the few negative aspects of the report was the forward guidance. The firm announced a modest cut to Q2 revenue to $51.5 billion from $53.8 billion expected.

As the market absorbs this report and lower forward guidance, we see price support back on the old resistance near $118. A break below $118 will validate our recent Algo Engine short signal. With price trading above our breakout range, we’re on the sideline for the time being with this trade.

Chart – Apple

SP 500 Technical Picture

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The SP 500 index is at a critical juncture based on two technical price indicators. The daily chart shows that the 30-day moving average (2265.00) has now converged closely to the Daily Parabolic switch point (2263). The low of the day in the SP 500 futures today was 2263.25.

The significance of this convergence is that it often time signals a change in medium-term directional momentum. In this case, the SP 500 hasn’t posted a close below the 30-day moving average since November 7th at 2130.00.

Considering how the SP 500 price has now extended beyond forward expectations of inflation and 12-month EPS levels, a decisive break of 2263.00 will likely trigger range extension to the downside. The December 30th low of 2225.00 is the first level of downside support.

AGL Outlook

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Several market commentators have focused on AGL as an Utility Stock ready to make a strong move higher; we aren’t as confident.

While the AGL stock price has rallied over 25% during the last 12 months, the source of these continued gains are based on increased earning expectations as the increase in electricity costs roll through to both consumers and business users.

Further, AGL bulls are relying upon improved fundamentals within the electricity market to support elevated prices.

Our view is that the expected jump in earnings and dividends per share will be hard to attain and that a sideways trading pattern between $20.00 and $22.50 is a more likely outcome over the medium-term.

Chart – AGL

QBE Higher On Merger Talks

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Shares of QBE have jumped over 5% in early trade, posting a new 15-month high of 12.97, on rumors that the firm was in formal merger talks with insurance giant Allianz.

According to an article in a German newspaper, the CEO’s of the two companies met before Christmas and Allianz made an informal offer of $15.00 per share for QBE.

This offer price represents a 20% premium to QBE’s closing price on Friday. Aside from this merger rumor, the stock has had a steady increase since early November as US bond yields have move higher.

Without any further clarification about the merger talks, we would expect technical resistance to be seen in the  $13.25 area.

Chart – QBE

Colgate Shares Post 1-Year Low On Weak Guidance

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Shares in Colgate-Palmolive had their biggest one-day drop since July 2010 on weak Q4 sales and negative forward guidance for low growth in 2017.

The company reported Q4 EPS of 68 cents per share on net income of $606 million compared to estimates of 75 cents per share.

Company sales were reported at $3.72 billion, below the year-ago number of $3.89 billion, and below the street’s estimate for Q4 sales of $3.9 billion.

The worst part of the report was the announcement that the company expects 2017 EPS to be flat and in the low single digits on an adjusted EPS basis.

Our Algo Engine generated a buy signal at or near the recent $65 low and with the weakness in the overnight earnings result, we recommend running a stop-loss on a break below 63.50

Chart – Colgate

 

A Big Q4 Miss For Chevron

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Shares of Chevron lost over 2% today to $113.80 as the energy giant reported Q4 earnings results which missed estimates by a wide margin.

The company announced Q4 EPS of 22 cents per share, on revenue of $31.5 billion. Analysts had expected the firm to report EPS of 64 cents per share on revenue of $33.3 billion.

In the year-ago period, Chevron reported a loss of $588 million, or 31 cents per share just as crude oil prices were hitting a 12-year low near $27.00.

We expect Chevron’s share price to closely track the price of crude oil going forward, and would look for the next area of support to be near the November price breakout range of $105

Chart – Chevron