Analytics, News, and Forecasts for CFD Markets: stock news — 18-05-2021.

U.S. stock-index futures rose slightly on Tuesday, as a rebound in tech shares and solid quarterly earnings reports from retailers were partially offset by much-bigger-than-expected decline in U.S. housing starts.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

Visa (V) upgraded to Outperform from Neutral at Daiwa Securities; target $259

MasterCard (MA) upgraded to Outperform from Neutral at Daiwa Securities; target $402

FXStreet notes that the S&P 500 is already trading above the 3900 year-end price target of economists at Morgan Stanley. However, they are not raising that target. Instead, the economists are doubling down on why they think the upside for the main U.S. index is capped for the rest of the year. 

“The primary reason we think valuation will prove to be a headwind is we've left the early cycle part of this recovery. We call it the mid-cycle transition, and it tends to coincide with the peak rate of change in policy and growth. Typically, during this period, the price/earnings multiple for the S&P 500 falls by approximately 20%. So far, it's declined by just 5%.”

“Long-term interest rates have moved significantly higher this year, as many of the most expensive and speculative parts of the equity market have de-rated significantly, some by as much as 50%. That tells us the de-rating is well underway and will eventually drive the multiple for the S&P 500 down by another 10-15%.”

“Earnings expectations have finally caught up to the reality of this V-shaped recovery... The recovery in profitability is a function of the unprecedented policy support that amounted to a giant corporate subsidy in labor costs. But now the reopening of the economy is likely to put upward pressure on costs and downward pressure on margins.”

“Higher corporate taxes are likely coming this fall. While it's unlikely the administration will get the full hike to 28% it's seeking, we do think a compromise is likely to be passed. Our best guess is that these changes will negatively affect S&P 500 earnings estimates for next year by approximately 5%. When combined with the margin pressure we see from continued supply chain issues and labor availability, it's unlikely earnings can offset the valuation reduction we still think is to come.”

Walmart (WMT) reported Q1 FY 2022 earnings of $1.69 per share (versus $1.18 per share in Q1 FY 2021), beating analysts’ consensus estimate of $1.21 per share.

The company’s quarterly revenues amounted to $138.300 bln (+2.7% y/y), beating analysts’ consensus estimate of $131.526 bln.

WMT rose to $142.02 (+2.25%) in pre-market trading.

Home Depot (HD) reported Q1 FY 2021 earnings of $3.86 per share (versus $2.08 per share in Q1 FY 2020), beating analysts’ consensus estimate of $2.93 per share.

The company’s quarterly revenues amounted to $37.500 bln (+32.7% y/y), beating analysts’ consensus estimate of $33.677 bln.

HD rose to $327.49 (+2.34%) in pre-market trading.

Baidu (BIDU) reported Q1 FY 2021 earnings of RMB12.36 per share (versus RMB8.84 per share in Q1 FY 2020), beating analysts’ consensus estimate of RMB10.75 per share.

The company’s quarterly revenues amounted to RMB28.134 bln (+24.8% y/y), beating analysts’ consensus estimate of RMB27.161 bln.

The company also issued in-line guidance for Q2 FY 2021, projecting revenues of RMB29.7-32.5 bln versus analysts’ consensus estimate of RMB30.3 bln.

BIDU rose to $196.50 (+3.86%) in pre-market trading.