US stocks rose on Thursday for the 4th day in a row. Investors are positive about the quarterly reports of corporations and are optimistic about the publication of the labor market report for January (on Friday). The number of applications for US unemployment benefits fell to the lowest level since November, signaling a possible slowdown in the rate of employment decline, as the spread of Covid-19 in the US gradually wanes.
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After the end of regular trading in the extended session, shares of Peloton Interactive fell, as the company can not meet all the demand for Internet-connected simulators, and this will negatively affect its profits in the future. Ford Motor shares rose as the automaker's profit in the reporting quarter was higher than analysts ' estimates.
Dow Jones +1.1% to 31055.9 p. (from the beginning of the year +1.5%),
S&P 500 +1.1% to 3,871. 74 p. (since the beginning of the year +3.1%),
NASDAQ +1.2% to 13,777. 7 p .( from the beginning of the year +6.9%),
Russel 2000 +2% to 2202.4 p. (since the beginning of the year +11.5%).
GameStop shares fell 42% to $53.50 as an army of retail investors shifted their Reddit-coordinated focus to biotech companies Anadex Life Sciences (+43.64% to $14.91) and Cassava Sciences (-28% to $63.43). At some point, the price growth for the Anadex was 364% since the beginning of February, and for the Cassava securities +545% in just 4 trading days of the current month.
At the end of Tuesday, the S&P 500 index was trading at a ratio of 30.6 to earnings for the past year and at a ratio of 22.6 to the forecast earnings of its member companies for the coming year.
Of the 505 shares in the index, 390 rose and 114 lost value.
For every share that fell in price, there were more than three that added in value.
Apple shares contributed the most to the growth of the index (+2.6% to $137.4), as well as the largest contribution to the growth of the IT sector. The company may soon announce a cooperation agreement with Hyundai-Kia to create an Apple Car electric car. Production can be carried out at the Kia plant located in the United States.
"Rumors about such cooperation appeared a couple of weeks ago. Now this has become more and more insistent in various media outlets. Perhaps an official announcement will be made in the near future. Working with a major automaker would allow Apple to enter the electric car market relatively quickly. Apple would be responsible for building the computing hardware and software to create an unmanned version that could be used as a robotaxi, as an option.
Under a smooth cooperation scenario, production could start in 2024, but this is only a rough forecast. In the meantime, it is better to wait for official news from the companies, " said Alexey Kornilov, a leading analyst at Otkritie Broker on the international stock market.
We have a current investment idea for Apple, the target implies $145, the growth potential from the current price of 5.5%.
Align Technology shares showed the most positive dynamics among the index components (+12.6% to $615.2). In the course of trading was formed absolute maximum paper at $634,46. A leading developer of innovative technologies in the field of dentistry that promotes market aligners "Invisalign" (invisible system for straightening teeth), issued a strong report on the results of the 4th quarter. Net profit +28% YoY to $834.5 million, with analysts ' consensus forecast of $783.2 million.
Shipments of Invisilines +14% QoQ and +37% YoY to 568 thousand units. Adjusted earnings per share of $2.61 with a forecast of $2.11. If the growth in the supply of Invisiline airliners in Q3 (+28% yoy) could be explained by deferred demand after the removal, as well as the scaling effect, then the significant growth in Q4 reflects the presence of growth potential in the global geography of deliveries.
10 of the 11 sectors of the S&P 500 index showed growth.
The IT sector contributed the most to the increase in the index (+1.5%) and reached a 52-week high. Qualcomm shares (-8.8%) put the most pressure on the sector and led the decline, as the company's revenue is limited by a shortage in the semiconductor market, and the situation is not expected to improve until the second half of the year.
PayPal shares were the leaders of growth in the sector. The securities rose by 7.4% to $270.43 on Thursday and reached a new record of $274.94 during the session. This was a reaction to the quarterly report published before the start of trading, in which the payment system reported a profit above forecasts due to the installment payment system and the added ability for users to buy, sell and store cryptocurrency in PayPal wallets.
The financial sector showed the maximum growth (+2.3%). JPMorgan shares (+2.3%) are the biggest contributor to the sector's growth. Allstate shares (-1.7%) put the most pressure on the sector and became the leaders of the decline.
The materials sector was the only one to end the day with a drop (-0.5%). DuPont de Nemours shares (+2.7%) are the biggest contributor to the sector's growth.
Air Prod Shares & Chem (-7.2%) exerted the most pressure on the sector after the release of the report for the 1st fiscal quarter, according to which adjusted earnings per share amounted to $2.12-below the consensus forecast of analysts of $2.18. Sales increased by 5.3% yoy to $2.38 billion, with forecasts of $2.34 billion. But adjusted Ebitda of $932 million fell short of expectations of $956 million.
International Paper shares (-7.6%) were the leaders of the decline in the sector also due to the publication of the results of operations in the 4th quarter of 2020. Adjusted earnings per share were 75 cents, compared with Wall Street's forecast of 81 cents. At the same time, net sales fell by 4.7% YoY to $5.24 billion, with a forecast of $5.30 billion.
Other reports
Shares of Boston Scientific rose 3.5% to $38.76. The company reported results for the 4th quarter and outlined a forecast for 2021. Adjusted earnings per share in the fourth quarter were $0.23, up from $0.46 a year earlier. Revenue fell 6.8% to $2.71 billion. In 2021, management forecasts earnings per share growth of about 60% to $1.50-$1.60. Revenue growth in 2021 is expected to be in the range of 13% -19%.
"Boston Scientific makes medical devices for performing operations. Because of Covid, the number of operations decreased as hospitals were more busy treating Covid patients. There was a deferred demand for operations. 2021 could be a year of recovery if the fight against the pandemic goes ahead as planned. There are prerequisites for this. Vaccination of the population is becoming more widespread. Therefore, the management forecast also reflects positive expectations. Given the positive dynamics in the forecasts for 2021, we see an opportunity to slightly increase the target price from $39.5 to $42 based on the projected earnings per share of $1.55 and a P/E multiplier of 27x. We maintain our rating at the level of "buy", - said Alexey Kornilov.
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