Company / Analytics

Daily comment Oct 31

• Wall St opens mixed as China reportedly doubts long-term deal with the US
• Fed cut interest rate by 25bps as expected
• AAPL+2.2% on strong 4Q sales of iPhone, Wearables
• FB +4.3% on 3Q EPS beat
• OLED +9% on stellar 3Q results
• Fiat +3.3%, Peugeot -12% on merger deal
• WTI -1.1%

Market movers:

• Apple (+2.2%) reported 4Q rev. and EPS beat. 4Q sales +2% y/y to $64bn vs est. $63bn, driven by iPhone, wearables strength. iPhone sales +10% y/y to $33.4bn vs est. $32.8bn; Wearables rev. +54% y/y to$6.5bn vs est. $5.94; services rev. +18% y/y to a record $12.5bn. Adj. EPS +4% y/y to $3.03 vs est. $2.84. Sees 1Q rev. of $85.5-$89.5 vs est. $86.7; gross margin of 37.5%-38.5% vs est. 37.6%. (https://apple.co/2WwplUZ)
• Facebook (+4.3%) reported 3Q rev. and EPS beat. 3Q rev. +29% y/y to $17.65bn vs est. $17.35bn. 3Q MAU +7.9% y/y to 2.45bn (in-line with est.); DAU +8.7% y/y (in line). Ad. rev. +28% y/y to $17.38bn vs est. $17.09bn. Adj. EPS +19.6% y/y to $2.48 vs est. $1.91. (https://bit.ly/2NwjYkV)
• Universal Display (+9%) reported 3Q rev. and EPS well above analyst estimate, raised guidance. 3Q rev. +26% y/y to $97.5mn vs est. $85.9mn. Adj. EPS +63.4% y/y to 78c vs est. 61c. Sees FY rev. of $400mn-$410mn, saw $370.0mn-$390.0mn vs est. $383.4mn. The Co. sees profit growth to continue in 2020. (https://bit.ly/36nJykm)
• Fiat and Peugeot’ PSA struck a deal on business combination, potentially creating the 4th largest carmaker in Europe. (https://bloom.bg/36kJYZ0)

Macro:

• Fed announced interest rate cut by 25bps yesterday. Jerome Powell indicated the conclusion of this year series of cuts, citing possibility of US-China preliminary trade agreement and lowered risk of no-deal Brexit. (https://bloom.bg/2WqR1ea)
• Meanwhile, China questions the possibility of long-term trade deal with Trump. (https://bloom.bg/36ek7BQ)
• US Sep Jobless claims: +5k to 218k vs est. 215k. Consumer spending for Sep: +0.2% m/m vs est. +0.3%. (https://bloom.bg/2qdDo5N)

Commodities:

• WTI (-1.1%): US crude stockpiles grew 5.7mn bls in the week ended Oct 25: EIA. Analysts expected an increase of 494k bls.
• Russia lowered oil production to 11.23mn bpd, representing 73% compliance with OPEC pact. (https://reut.rs/2N4PszA)

Coming up:

• On Fri (11/1): US jobs report for Oct