Category: Commentary

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While most emerging markets are under pressure, U.S. stock indexes are still trading near all-time highs. How long can this decoupling persist?

Can the record corporate earnings and sales growth alleviate the fear of emerging markets’ contagion? So far the answer is a resounding Yes as dip buyers continue to be active on the slightest pullbacks.

It’s not all sunshine and rainbows in the U.S. markets either. While retailers and software stocks are crushing estimates and breaking out, homebuilders are near 52-week lows. Maybe rising interest rates are finally starting to matter for some sectors or at least the market believes they will matter for future earnings.

We also go over some new ideas.

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Match Group, which owns Tinder and various other dating applications crushed earnings estimates again and it is trading near $44 per share in the after-hours session. They reported earnings per share of $0.41 vs $0.16 for the same quarter last year. Analysts expected $0.35. The surprise is not huge but it might be enough to fuel some upside momentum tomorrow.

Keep in mind that 50% of MTCH’s 62 million shares float is short. The short sellers are backed against the wall and they will try to fade MTCH tomorrow morning. If MTCH can stay above $45 after the market opens on Wednesday, we might see it attack its all-time highs near 48.65. Above it, there’s a potential for a monster short squeeze.

Here’s Tinder’s Chief Product Officer, Brian Norgard on the latest numbers:

The $Match numbers are out:

-Tinder average subs were 3.8MM in Q2 2018, increasing 299,000 sequentially & 1.7 million YOY
-Total Revenue grew 36% over the prior year quarter to $421MM
-Operating income was $150MM, an increase of 81% over the prior year quarter

Great work team

— Norgard (@BrianNorgard) August 7, 2018

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Chinese tech stocks might be trouble but their U.S. counterparts are hitting of all cylinders. And there are good fundamental reasons: 75% of the S&P 500 companies reported earnings already. So far, the average year-over-year earnings growth is 30%, the average y/y sales growth is 10%. We haven’t seen such high growth rates since 2010.

We take a look at some new and some old ideas: SEND, DOCU, FIVE, NKE, DIS, BL, MELI, NVDA, AAPL, TWLO, ETSY, AMGN, SGEN, MYGN, and others.