Upload
others
View
3
Download
0
Embed Size (px)
Citation preview
MARKET RECAP at 4 pm ET
Wall Street tanked and oil prices
plunged after the U.S. Treasury yield
curve temporarily inverted for the first
time in 12 years, pointing to a growing
risk of a recession. Disappointing data
from Germany and China added to the
global gloom, sending investors to safe-
havens. The dollar index and
Japanese yen gained. Gold prices
rose.
Coming Up On the U.S. economic tap, the
commerce department is scheduled to
show retail sales likely increased 0.3%
in July, after it rose 0.4% in June. The
department is likely to show business
inventories increased 0.1% in June,
after advancing 0.3% in May. The labor
department is likely to show initial
jobless claims for the week ended
August 10 rose to 214,000, from
209,000. The department is expected
to report second-quarter preliminary
nonfarm productivity rose at a rate of
1.5%. Labor cost likely rose 2% in the
second quarter, after falling 1.6% in the
previous quarter. The Federal Reserve
is expected to show industrial
production likely rose 0.1% in July,
after being flat in June. The
Philadelphia Fed's business
conditions index is likely to show a
reading of 10 for August, after showing
a reading of 21.8 in July.
KEY ECONOMIC EVENTS
NY Fed Manufacturing for Aug 0830 3.00 4.30
Initial jobless claims 0830 214,000 209,000
Jobless claims 4-week average 0830 -- 212,250
Continued jobless claims 0830 -- 1.684 mln
Philly Fed Business Index for Aug 0830 10.0 21.8
Philly Fed 6M Index for Aug 0830 -- 38.00
Philly Fed Capex Index for Aug 0830 -- 36.90
Philly Fed Employment for Aug 0830 -- 30.00
Philly Fed Prices Paid for Aug 0830 -- 16.10
Philly Fed New Orders for Aug 0830 -- 18.90
Labor costs preliminary for Q2 0830 2.0% -1.6%
Productivity preliminary for Q2 0830 1.5% 3.4%
Retail sales ex-autos mm for Jul 0830 0.4% 0.4%
Retail sales mm for Jul 0830 0.3% 0.4%
Retail ex gas/autos for Jul 0830 -- 0.7%
Retail control for Jul 0830 0.3% 0.7%
Retail sales YoY for Jul 0830 -- 3.42%
Industrial production mm for Jul 0915 0.1% 0.0%
Capacity utilization SA for Jul 0915 77.8% 77.9%
Manufacturing output mm for Jul 0915 -0.1% 0.4%
Industrial production YoY for Jul 0915 -- 1.32%
Business inventories mm for Jun 1000 0.1% 0.3%
Retail inventories ex-auto revenue for Jun 1000 -- -0.1%
NAHB Housing Market Index for Aug 1000 65 65
Events ET Poll Prior
STOCKS Close %Chng Yr-high Yr-low Chng
DJIA 25479.42 -800.49 -3.05 27398.68 21712.53
Nasdaq 7773.94 -242.42 -3.02 8339.64 6457.13
S&P 500 2840.60 -85.72 -2.93 3027.98 2443.96
Toronto 16045.94 -304.90 -1.86 16672.71 13776.88
FTSE 7147.88 -103.02 -1.42 7727.49 6599.48
Eurofirst 1442.44 -23.82 -1.62 1554.34 1308.86
Nikkei 20655.13 199.69 0.98 22362.92 19241.37
Hang Seng 25302.28 20.98 0.08 30280.12 24896.87
TREASURIES Yield Price
10-year 1.5860 28 /32
2-year 1.5791 6 /32
5-year 1.4957 11 /32
30-year 2.0254 81 /32
FOREX Last % Chng
Euro/Dollar 1.1132 -0.35
Dollar/Yen 105.99 -0.69
Sterling/Dollar 1.2051 -0.06
Dollar/CAD 1.3316 0.74
TR/HKEX RMB 92.18 -0.20
COMMODITIES ($) Price Chng % chng
Front Month Crude /barrel 55.11 -1.99 -3.49
Spot gold (NY/oz) 1511.79 10.65 0.71
Copper U.S. (front month/lb) 0.0259 -0.0004 -1.31
CRB Index Total Return 179.42 -2.56 -1.41
S&P 500 Price $ Chng % Chng
GAINERS
Newmont Goldcorp Corp 37.98 0.32 0.85
Ventas Inc 71.46 0.17 0.24
Evergy Inc 63.79 0.05 0.08
LOSERS
Macy's Inc 16.80 -2.56 -13.22
Kohls Corp 45.11 -5.56 -10.97
Nordstrom Inc 26.02 -3.10 -10.65
SAMPLE
2
Walmart Inc will report its second-
quarter earnings. The retailer is
expected to post robust sales growth
despite increasing pressure from tariffs
imposed on imports from China.
Investors will watch for an update on
consumer demand in the wake of tariffs,
contingency plans to mitigate the impact
and an update on the e-commerce
business following Walmart's decision to
deprioritize Jet.com.
Alibaba Group Holdings Ltd, China's
top e-commerce company, is expected
to post a rise in first-quarter revenue as
the company benefits from its offline
commerce and cloud computing
businesses, where it has been investing
heavily in the past few months.
Nvidia Corp is expected to post a fall in
second-quarter revenue, as the chip
designer continues to struggles with
slowing sales to data centers and weak
demand for its gaming chips. Investors
will expect commentary on the overall
slowing chip industry, amid mixed
results from other chipmakers.
Chip equipment maker Applied
Materials Inc is expected to post a fall
in third-quarter revenue as chipmakers
continue to struggle with renewed trade
war worries between U.S. and China.
Investors will look for details and
forecast, as other chipmakers see
better second half for the industry.
Tapestry Inc is expected to report
higher fourth-quarter revenue, boosted
by sales of its Coach handbags.
Investors will also focus on any update
on the progress the company has
made on fixing its millennial-focused
Kate Spade brand, whose sales have
suffered in recent months due to some
of its out-of-touch fashion designs.
J C Penney Co Inc is likely to post its
fourth consecutive drop in same-store
sales in its second quarter as it battles
decreasing store traffic and fierce
online competition. The main focus
would be if the quarterly results would
be another blow for the struggling
retailer. Investors will be look for the
company's take on how escalating
tariffs would impact its business.
Mexican central bank is scheduled to
hold its next monetary policy
meeting, with markets eager to see if
the board could cut interest rates
following the U.S. Federal Reserve's
rate cut and a slowdown of inflation in
Mexico.
Argentina's National Institute of
Statistics and Censuses is expected to
report consumer prices index data for
July. It rose 2.6% in the June.
A file photo of the logo of Walmart shown on one of its stores in Encinitas, California April 13, 2016. REUTERS/Mike Blake
SAMPLE
3
Wall Street sold off sharply, with the
Dow registering its largest one-day
point drop since October 2018 as
investors were gripped by increased
concerns about a recession after the
U.S. Treasury yield curve temporarily
inverted for the first time in 12 years.
The energy sector fell 4.12% to
416.27 and the financial sector lost
3.56% to 430.82. The Dow Jones
Industrial Average fell 3.05% to
25,479.42, the S&P 500 lost 2.93% to
2,840.59 and the Nasdaq Composite
dropped 3.02% to 7,773.94 at close.
The Treasury yield curve temporarily
inverted for the first time since June
2007 in a sign of investor concern that
the world's biggest economy could be
heading for recession. The inversion -
where shorter-dated borrowing costs
are higher than longer ones - saw U.S.
2-year note yields rise above the
benchmark 10-year yield. The U.S.
curve inverted to as much as minus 2.1
basis points, a metric widely viewed as
a classic recession signal. The last
time this yield curve inverted was in
June 2007 when the U.S. subprime
mortgage crisis was gathering pace.
The U.S. curve has inverted before
every recession in the past 50 years,
offering a false signal just once in that
time. The curve was last at 0.2 basis
point after the inversion reversed.
Benchmark notes rose 28/32 yielding
1.59%. Short dated 2-year notes were
up 5/32 to yield 1.58%. The 30-year
bonds were up 2-17/32 yielding
2.03%.
The Japanese yen and dollar index
rose after the U.S. Treasury bond yield
curve inverted for the first time since
2007 and investors, gripped by fear of
a looming global recession, fled to the
safety of perceived safe-haven assets.
"There is plenty of doom and gloom to
spread across the globe," said John
Doyle, vice president for dealing and
trading at Tempus Inc in Washington.
The U.S. yield curve "is a major
recession indicator. Germany, Italy and
the UK are likely headed for a
recession. Today's Chinese data was
shockingly bad." The dollar was last
down 0.17% against the Japanese
currency at 105.97 yen. The dollar
index was 0.21% higher at 98.02.
Oil prices tumbled, after fresh Chinese
and European economic revived global
demand fears and U.S. crude
inventories rose unexpectedly for the
second week in a row. China reported
weak data for July, including a surprise
drop in industrial output growth to a
more than 17-year low. The euro
zone's GDP barely grew in the second
quarter of 2019. U.S. crude stocks
grew by 1.6 million barrels last week
compared with analysts' expectations
for a decrease of 2.8 million barrels as
refineries cut output, the Energy
Information Administration said in its
report. Profit taking after Tuesday's
gains also weighed on crude prices on
Wednesday, analysts said. Brent
crude dropped 3.28% to $59.29 a
barrel, while U.S. crude tumbled
3.47% to $55.12 a barrel.
Gold prices rose as an inverted U.S.
Treasury yield curve and weak euro
zone data stoked fears of a global
economic recession and drove
investors toward safe-haven bullion.
"With major economies in the euro
zone reporting negative growth, it's
possible we will see a recession. So for
gold in particular, it increases
expectations of what the U.S. Federal
Reserve will do in terms of easing"
interest rates, said Jeff Klearman,
portfolio manager at GraniteShares.
Spot gold rose 0.78% to $1,512.88 per
ounce. U.S. gold futures were up
0.75% at $1,525.40 an ounce.
Market Monitor
Traders work on the floor at the New York Stock Exchange in New York, U.S., August 13.
REUTERS/Eduardo Munoz
SAMPLE
4
U.S. Treasury bond curve inverts for
1st time since 2007 in recession
warning
The U.S. Treasury bond yield curve
inverted for the first time since 2007, in
a sign of investor concern that the
world's biggest economy could be
heading for recession. The inversion --
a situation where shorter-dated
borrowing costs are higher than longer
ones -- saw U.S. 2-year note yields rise
above the 10-year bond yield. Such an
inversion, considered a classic
recession signal, occurred last in June
2007 when the U.S. sub-prime
mortgage crisis was gathering pace.
Elsewhere, yield curves have been less
accurate in predicting downturns
but Germany's was at its flattest since
2008. Britain's bond yield curve also
inverted for the first time since the
global financial crisis.
U.S. yield curve inversion highlights
recession fears, Fed dilemma
When the U.S. Federal Reserve cut
interest rates last month for the first
time in more than a decade, it signaled
that further reductions in borrowing
costs might not be needed. Bond
markets vehemently disagree. Sliding
bond yields and the inversion of a key
part of the U.S. yield curve for the first
time in 12 years show that bond
investors have a far gloomier outlook
for the U.S. and global economies than
the U.S. central bank. "The rates
market rarely lies and globally it looks
like it's expecting a day of reckoning,"
said Tom di Galoma, a managing
director at Seaport Global Holdings in
New York. Fears are also rising the
Fed may not only be behind the curve
in cutting rates, but that central banks
may be running out of ammunition to
stimulate growth as countries offset
each other's attempts to boost growth
with looser fiscal policy.
GRAPHIC-Inverted yield curve
rattles investors wary of dying stock
bull market
A yield curve typically has an upward
slope -- when the yields are plotted on
a graph -- because investors expect
greater compensation for the risk of
owning longer-maturity debt. An
inversion, when shorter-dated yields
are higher than longer-dated ones, is
considered a warning of a looming
recession. With inverted yield curves
widely viewed on Wall Street as a
major danger signal for the economy,
Bank of America Merrill Lynch warned
this week that Wall Street's decade-
long rally is also under threat. "The
equity market is on borrowed time after
the yield curve inverts. However, after
an initial post-inversion dip, the S&P
500 can rally meaningfully prior to a
bigger US recession related
drawdown," Bank of America Merrill
Lynch analysts wrote in a report on
Monday.
The Upside Down: Yield Curve Inverts
EXPLAINER-Countdown to
recession: What an inverted yield
curve means
The yield curve is a plot of the yields on
all Treasury maturities - debt sold by
the federal government - ranging from
1-month bills to 30-year bonds. In
normal circumstances, it has an arcing,
upward slope because bond investors
expect to be compensated more for
taking on the added risk of owning
bonds with longer maturities. When
yields further out on the curve are
substantially higher than those near the
front, the curve is referred to as steep.
So a 30-year bond will deliver a much
higher yield than a two-year note.
When the gap, or "spread", is narrow, it
is referred to as a flat curve. In that
situation, a 10-year note, for instance,
may offer only a modestly higher yield
than a 3-year note. On rare occasions,
some or all of the yield curve ceases to
be upward sloping. This occurs when
shorter-dated yields are higher than
longer-dated ones and is called an
inversion.
The U.S. curve has inverted before every recession in the past 50 years, offering a false signal
just once in that time.
SAMPLE
5
Other Top News
Macy's shares sink as discounts to
clear inventory hurt, tourism drops
Macy's cut its full-year earnings
forecast after missing estimates for
quarterly profit for the first time in at
least two years, as it discounted
merchandise heavily to clear spring
inventory, sending its shares down.
Macy's executives reassured investors
on a post-earnings call that the
company is in "active discussions" with
vendors and suppliers to mitigate tariffs
and minimize customer impact in 2019
as much as possible. Macy's now
expects 2019 adjusted profit to be
between $2.85 per share to $3.05 per
share, down from a previous forecast
of $3.05 to $3.25. For the second
quarter ended Aug. 3, net income
attributable to Macy's shareholders
slumped 48% to $86 million, or 28
cents per share. The company’s shares
ended 13.22% lower at $16.8 at market
close.
WeWork to test IPO investor
appetite with widening losses
WeWork owner The We Company
published detailed financial statements
for the first time, revealing breakneck
revenue growth and soaring losses, as
it prepares for an initial public offering
as early as next month. "Large money-
losing IPOs with high valuations tend to
be challenging in the IPO market," said
Kathleen Smith, founding principal at
IPO research firm Renaissance
Capital. "IPO investors have already
been burnt by Lyft and Uber. They are
going to be cautious about WeWork."
We Company, co-founded in 2010 by
its chief executive, Adam Neumann,
said in a filing with the U.S. Securities
and Exchange Commission that it lost
more than $900 million in the first half
of 2019, up 25% from a year earlier,
even as its revenue doubled to $1.54
billion. The company did not give a
time frame for becoming profitable.
Irish regulator queries Facebook on
transcription of users' audio
The lead regulator of Facebook in the
European Union is seeking information
on how the company handled data
during the manual transcription of
users' audio recordings, Ireland's Data
Protection Commission said. "Further
to our ongoing engagement with
Google, Apple and Microsoft in relation
to the processing of personal data in
the context of the manual transcription
of audio recordings, we are now
seeking detailed information from
Facebook on the processing in
question and how Facebook believes
that such processing of data is
compliant with their GDPR obligations,"
the commission said in an emailed
statement. Facebook until recently
carried out human review of private
audio from its Messenger app in order
to improve artificial intelligence
systems to transcribe accurately but no
EU users were affected, the company
said.
FCC chairman circulates order to
approve Sprint, T-Mobile tie-up
U.S. Federal Communications
Commission Chairman Ajit Pai
circulated a draft order that would grant
approval to the $26 billion tie-up of T-
Mobile US and Sprint. The order must
still be approved by two of the other
four FCC commissioners. The U.S.
Justice Department approved the
merger last month but the deal still
faces a court challenge from 16 state
attorneys general. Democratic FCC
Commissioner Jessica Rosenworcel
said on Twitter she was "not convinced
that removing a competitor will lead to
better outcomes for consumers."
China's Luckin counts cost of
Starbucks battle
Luckin Coffee posted a bigger-than-
expected quarterly loss in its first
results as a public company, hurt by
soaring costs as it opened stores at a
rapid clip and invested aggressively to
take on Starbucks. Luckin's operating
A file photo of people standing outside a WeWork co-working space in New York City, New York
U.S., January 8. REUTERS/Brendan McDermid
SAMPLE
6
expenses surged more than three
times in the June quarter, as it opened
593 new stores taking its total to 2,963,
about 1,000 fewer than Starbucks. On
an adjusted basis, Luckin lost 48 cents
per share. In a conference call,
Luckin's CEO Qian Zhiya said the
company is on track to reach store
level break-even point during the third
quarter of 2019, after a 55.8 million
yuan operating loss in the second
quarter, "thanks to better bargaining
power due to scale benefit, and higher
store level sales."
IT services company Presidio to go
private in $2 billion deal
Presidio said it would be taken private
by BC Partners in a $2 billion all-cash
deal, as the European buyout fund
looks to expand its footprint in the
cybersecurity space. Presidio
stockholders will receive $16 in cash
for each share they own, representing
a premium of 21.3% to Presidio's
closing price on Tuesday. The deal,
which is expected to close in the fourth
quarter of 2019, includes a 40-day "go-
shop" period, which allows Presidio's
board and advisers to consider
alternative offers, the company said.
BC Partners said Presidio fits well with
its investment priorities in IT systems
and networks.
U.S. lawmakers push Mylan, Teva
over drug pricing probe
The head of the U.S. House of
Representative's oversight panel called
on three drugmakers to turn over
documents as part of an ongoing
congressional review over generic drug
price increases and accused the
companies of "apparent efforts to
stonewall" the probe. U.S. House
Oversight Chairman Elijah Cummings,
along with U.S. Senator Bernie
Sanders, the ranking member on the
Senate Budget Committee, sent the
letters to Mylan, Teva Pharmaceutical
and privately held Heritage
Pharmaceuticals, the lawmakers said.
Mylan denied obstructing the inquiry
and said it was prepared to make its
case in a court of law, while Teva said
it continues to fully cooperate with the
investigations.
Ford extends warranties on 560,000
Focus, Fiesta models
Ford Motor said it was extending
warranties on clutch and related
hardware in 560,000 Focus and Fiesta
cars in the United States and Canada
after reports of problems with their six-
speed transmission. The company said
it would reimburse any repair charges
to customers of 2014 through 2016
model cars, and offer other owners
another chance to get a software
update to fix the issue. The problems
with the cars' automatic transmission
DPS6 - made to improve the vehicle's
fuel economy - include a degree of
vibration when the transmission is
operated at low speed, and a potential
for the transmission to default to
neutral. The company declined to
reveal how much it would cost to offer
the extended warranties and said the
decision was independent of news
reports or lawsuits related to the issue.
Education group urges U.S. Justice
Department to block textbook
merger
An education group seeking to
increase access to college textbooks
and research materials asked the U.S.
government to block the proposed
merger of textbook publishers McGraw-
Hill Education Inc and Cengage
Learning Holdings II Inc. The proposed
merger "will significantly decrease
competition in a market already rife
with anti-consumer behavior," the
Scholarly Publishing and Academic
Resources Coalition (SPARC) said in a
filing with the Justice Department's
Antitrust division. A representative for
the two companies said Cengage and
McGraw-Hill were working closely with
the Justice Department and were
"confident that the transaction will
benefit our customers and create more
affordable options for students."
Anbang's Japan properties up for
sale, Blackstone seen bidding -
sources
China's troubled Anbang Insurance has
put its $2.4 billion property portfolio in
Japan up for sale and previous owner
Blackstone is bidding, two people
familiar with the company's plans said.
The insurer is offering its entire
portfolio of mainly residential buildings
in Tokyo and other big cities after it
failed to sell some of the assets last
year, the sources said. Anbang tried to
sell a portion of the Japanese portfolio
last year, but failed to attract buyers
because the assets were less attractive
due to age and location, the sources
said. They said Blackstone was among
the bidders for the entire portfolio
largely made up of apartment buildings
catering to middle class clients in
Tokyo, Nagoya and other large cities.
REUTERS/Rebecca Naden
SAMPLE
7
GRAPHIC-Dow transport average
struggles to keep pace, could be
market warning sign
The Dow Jones Transportation
Average is struggling to get into gear
and that could be a sign the market is
ready to stall further. The 20-
component index of rail operators,
airlines, truckers and package delivery
stocks is seen by many investors as a
barometer of economic activity, and it
is failing to keep up with other key
market measures. While other major
U.S. averages have set all-time highs
in 2019 amid a broad equities rally, the
Dow transports only came within 4% of
its Sept. 14 record, doing so on
April 24.
COLUMN-Trump avoids becoming
the Grinch, but weakens trade hand
with China: Russell
President Donald Trump has
inadvertently admitted that the United
States no longer holds the whip hand in
the ongoing trade dispute with China,
after backtracking on his latest
escalation of the tariff war. Trump told
reporters that the decision to defer the
tariffs on a range of mainly consumer
goods was to protect U.S. consumers
from price increases ahead of
Christmas holiday shopping. That
statement alone makes a mockery of
Trump's long-held assertion that China
is paying for the tariffs, not the U.S.
consumers.
Going negative? As trade war rages,
central banks ponder radical steps
Negative interest rate policy is
becoming a more attractive option for
some other central banks to counter
unwelcome currency rises. In Asia,
central banks in economies as diverse
as Australia, India and Thailand have
stunned markets by cutting
aggressively rates in response to the
broadening fallout from the U.S.-China
trade war. The fact such controversial
tools are being more widely contem-
plated underscores the dilemma central
banks across the world face, as the
global slowdown forces them to go to
extremes in shielding their economies
from a strengthening currency.
A visitor watches a floral decoration in the Gothic wing of Brussels' city hall during "Flowertime" event, in Brussels, Belgium, August 14.
REUTERS/Francois Lenoir
Insight and Analysis
SAMPLE
8
CANADA COMING UP Market Monitor
Top News
Canada Goose margins miss on
higher sales of less profitable,
lighter clothes
Canada Goose's quarterly gross
margins missed estimates, as the
luxury apparel maker sold more of its
light-weight spring season clothes,
which are not as profitable as its
$1,000 parkas. "The affinity and desire
we have seen for our seasonally
relevant lightweight offerings tells us
our product expansion is working,"
Canada Goose said in its statement.
The company said online and retail
sales of its light-weight, non-parka
products rose to about a third of its
total revenue in the quarter for the first
time and that it expects to sell more
parkas in the third and fourth quarter as
the weather gets colder. Net loss
widened to C$29.4 million, or 27
Canadian cents per share, in the
quarter, from a loss of C$18.7 million,
or 17 Canadian cents per share, a year
earlier.
Canada's Trudeau accepts he
breached ethics rules, refuses to
apologize
Canadian Prime Minister Justin
Trudeau accepted a watchdog's report
that he breached ethics rules by trying
to influence a corporate legal case but
refused to apologize, saying he had
been trying to defend jobs.
Independent ethics commissioner
Mario Dion said Trudeau and his team
attempted last year to undermine a
decision by federal prosecutors that
construction company SNC-Lavalin
should face a corruption trial. Dion's
scathing 58-page assessment could
hurt Trudeau's chances of retaining
power in a general election in October.
"I fully accept this report ... I take full
responsibility. The buck stops with the
prime minister," said Trudeau, adding
that he nevertheless disagreed with
some of Dion's conclusions.
Canadian pension giant plans hiring
spree in Asia, Europe
Ontario Teachers' Pension Plan plans
to hire "extensively" in Asia and Europe
over the next two years and could shift
an extra C$11 billion into infrastructure
and other real assets, its chief
executive told Reuters. Outgoing Chief
Executive Ron Mock told Reuters that
Ontario Teachers' (OTPP) could triple
its current Asia headcount of around 25
people and is considering opening
offices in Mumbai and Singapore. Mock
said China, India, Australia, Vietnam,
Indonesia and the Philippines were all
areas likely to see further investment.
"Asia represents a growth opportunity
over the next 10-15 years... you can't
TSE's S&P/TSX composite Price C$ chng % chng
GAINERS
Eldorado Gold Corp 11.37 0.68 6.36
NovaGold Resources Inc 9.20 0.37 4.19
Chemtrade Logistics Income
Fund 9.90 0.38 3.99
Detour Gold Corp 23.54 0.78 3.43
Turquoise Hill Resources Ltd 0.65 0.02 3.17
LOSERS
Kelt Exploration Ltd 2.78 -0.38 -12.03
Baytex Energy Corp 1.71 -0.16 -8.56
Crescent Point Energy Corp 3.80 -0.35 -8.43
Birchcliff Energy Ltd 2.10 -0.19 -8.30
Hudbay Minerals Inc 4.23 -0.38 -8.24
Canada's main stock index fell,
mirroring a global slump in equities.
The Toronto Stock Exchange's S&P/
TSX composite index was down
1.86% at 16,045.94.
The energy sector fell 3.44% to
121.97.
The U.S. dollar was 0.73% higher
against its Canadian counterpart at
C$1.3315.
Canada's ADP is expected to post the
country's National Employment
Report for July. In June, jobs rose by
30,400, thanks to a rise in construction
jobs.
REUTERS/Jason Lee
REUTERS/Mark Blinch
SAMPLE
9
just set up on a dime and take down on
a dime when you're investing in private
assets like private equity and
infrastructure." Despite political turmoil
in Britain as the country inches closer
to leaving the European Union, Mock
said London would remain its
European base and headcount could
rise from around 30 to more than 50
over the next two years.
Air Canada sees A220 jet delivering
boost for key U.S. transit traffic
Air Canada said it will launch a direct
Seattle-Montreal service in May 2020
with its new A220-300 jets, as the
carrier eyes new routes to expand its
share of lucrative international transit
traffic to and from the United States.
Airbus's smallest commercial jet,
expected to enter Air Canada's fleet in
December with its first delivery, will
help the carrier open new routes and
increase capacity to cities that lack
enough traffic to warrant a larger plane,
Canada's largest carrier said. "The
economics that come with this aircraft
allow Air Canada to open new routes
that you couldn't serve profitably," Mark
Galardo, the Montreal-based carrier's
vice president of network planning, said
in an interview. Air Canada will use the
fuel-efficient 137-seat jet, developed by
Bombardier, to help attract U.S.
passengers flying through its Canadian
hubs, Galardo said.
Canada's Freeland, on weak yuan,
says many reasons for currency
fluctuations
Canadian Foreign Minister Chrystia
Freeland sidestepped a question on
whether Ottawa would join Washington
in accusing China of manipulating the
yuan, saying there could be lots of
reasons why currencies rise or fall. "At
a time of volatility in the global
economy and volatility in the trading
space, there can be a lot of
explanations for why currencies fall and
rise," Freeland told a televised news
conference in Toronto when asked
whether Canada would also label
China a currency manipulator. When a
reporter suggested this comment
meant Canada would not act, Freeland
replied: "I answered your question
choosing my words with care."
Canada's CAE profit miss, weak
cash flow send shares tumbling
Canada's CAE fell short of analysts'
profit expectations and reported
weaker-than-expected free cash flow in
the quarter, sending its shares
tumbling. The world's largest civil
aviation training company reported a
negative free cash flow of C$102.1
million, much bigger than an estimated
negative cash flow of C$11 million,
according to four analysts polled by
Refinitiv. Revenue from CAE's biggest
unit, civil aviation training solutions,
rose 10.8% to C$477.6 million, mainly
driven by the CAE's acquisition of
Bombardier's business aircraft training
unit. However, the unit's revenue fell
short of estimates, TD Securities
analysts said in a note. Net income
attributable to shareholders fell 11.4%
to C$61.5 million, or 23 Canadian cents
per share, in the first quarter of fiscal
year 2020. At market close, the
company’s shares ended 4.58% lower
at C$34.17.
A file photo of Canada's Foreign Minister Chrystia Freeland taking part in a bilateral meeting at the
Lappi Areena in Rovaniemi, Finland May 7. Mandel Ngan/POOL via REUTERS
SAMPLE
WEALTH NEWS ECONOMIC REPORT
U.S. import prices rebound, but trend still
subdued
U.S. import prices unexpectedly rose in July,
but the underlying trend continued to be
weak, pointing to subdued imported inflation
pressures. Import prices increased 0.2% last
month as a rebound in the cost of petroleum
products offset declines in prices for capital
goods and motor vehicles, the government
said. The core import prices fell 1.5% in the
12 months through July. The Labor
Department report also showed export prices
rose 0.2% in July, boosted by gains in prices
for agricultural and nonagricultural products,
after declining for two straight months. Export
prices fell 0.9% on a year-on-year basis in
July after decreasing 1.6% in June.
TRADE TENSIONS
No concessions from China as Trump postpones some tariffs -U.S. officials
China made no concessions to the United States after President Donald Trump postponed threatened tariffs on some Chinese
imports until mid-December, senior U.S. officials said.
TRUMP ON FED POLICY
Trump sees Fed rather than trade war as source of market turmoil
With global markets flashing concern about the fallout from the U.S.-China trade war and the near-term strength of the
American economy, U.S. President Donald Trump targeted Federal Reserve policy as the culprit for recent market turmoil.
OIL OUTPUT
U.S. crude stocks build unexpectedly; gasoline demand at record high-EIA
U.S. crude oil stockpiles rose unexpectedly for a second week in row as refineries cut output last week, while fuel inventories
posted surprise drawdowns with gasoline demand hitting a record high, the Energy Information Administration said.
DEAL TALKS
Osram and AMS say takeover talks are constructive
Osram and AMS said that talks about a takeover of the German lighting group by the Austrian sensor maker were progressing.
POTENTIAL TAKEOVER
Axel Springer on M&A hunt before ink dries on KKR deal
German publisher Axel Springer said it was actively looking at potential takeovers, even as a buyout of its minority
shareholders awaits completion, amid speculation that the digital classifieds sector will consolidate in Europe.
GRAPHIC
Saudi, Trump 'jawboning' suggests $75 top for oil market
Ask Saudi Arabia about its preferred oil price and the kingdom will say it has no target. But a look at the pronouncements on
the oil market by the world's top oil exporter this year points to an oil price aspiration of around $70 per barrel.
A file photo of a stack of shipping containers pictured in the Port of Miami in Miami, Florida,
U.S., May 19, 2016. REUTERS/Carlo Allegri
SAMPLE
The Day Ahead - North America is compiled by Yoganand KN and Pathikrit Bandyopadhyay in Bengaluru.
For questions or comments about this report, email us at: [email protected].
To subscribe for The Day Ahead newsletter click here
Company Name* Quarter ET EPS Estimates** Year Ago Rev Estimates (mln) Smart Estimates
KEY RESULTS
Applied Materials Q3 AMC $0.70 $0.70 $1.20 $3,523.98
NVIDIA Q2 AMC $1.15 $1.15 $1.94 $2,544.90
Tapestry Q4 BMO $0.61 $0.61 $0.60 $1,533.28
Walmart Q2 BMO $1.23 $1.22 $1.29 $130,106.42
*Includes companies on S&P 500 index. **Estimates may be updated or revised; release times based on company guidance or past practice.
I/B/E/S EPS and revenue estimates, and StarMine Smart Estimates, provided by Refinitiv.
SAMPLE
Last Close1,196.73 (USD)2019 August 13NASDAQ Exchange
Avg Daily Vol1.8M
52-Week High1,296.98
Trailing PE24.2
Annual Div--
ROE19.6%
LTG Forecast9.3%
1-Mo Return4.5%
Market Cap (Consol)824.6B
52-Week Low977.66
Forward PE23.1
Dividend Yield--
Annual Rev148.3B
Inst Own81.6%
3-Mo Return5.3%
AVERAGE SCORE
POSITIVE OUTLOOK: GOOGL's current scoreof 9 places it within the top 15% of stocks scored.
Score Averages
Software & IT Services Group: 5.2 Mega Market Cap: 7.2Software & IT Services Sector: 5.2 S&P 500 Index: 6.6
Positive
Neutral
Negative
Average Score Trend (4-Week Moving Avg)
2016-08 2017-08 2018-08 2019-08
Peers -6M -3M -1M -1W Current 1Y Trend
FB 8 8 8 9 9
GOOGL 8 6 7 9 9
YNDX 10 8 9 10 9
SOGO 6 5 4 5 5
BIDU 8 6 4 4 4
HIGHLIGHTS THOMSON REUTERS I/B/E/S MEAN- The score for Alphabet Inc last changed from 8 to 9 on 2019-
08-04.
- The recent change in the Average Score was primarily due toan improvement in the Earnings component score.
Buy Mean recommendation from all analysts coveringthe company on a standardized 5-point scale.45 Analysts
Sell Reduce Hold Buy StrongBuy
PRICE AND VOLUME CHARTS1-Year Return: -4.2% 5-Year Return: 104.7%
BUSINESS SUMMARYAlphabet Inc. is a holding company. The Company's businesses include Google Inc. (Google) and its Internet products, such as Access, Calico,CapitalG, GV, Nest, Verily, Waymo and X. The Company's segments include Google and Other Bets. The Google segment includes its Internetproducts, such as Search, Ads, Commerce, Maps, YouTube, Google Cloud, Android, Chrome and Google Play, as well as its hardware initiatives. TheGoogle segment is engaged in advertising, sales of digital content, applications and cloud offerings, and sales of hardware products. The Other Betssegment is engaged in the sales of Internet and television services through Google Fiber, sales of Nest products and services, and licensing andresearch and development (R&D) services through Verily. It offers Google Assistant, which allows users to type or talk with Google; Google Maps,which helps users navigate to a store, and Google Photos, which helps users store and organize all of their photos.
ALPHABET INC (GOOGL-O)Software & IT Services / Software & IT Services / Online Services
STOCKREPORTS+DETAILED STOCK REPORT
Report Date: 2019 August 14
The Financial andRisk business ofThomson Reutersis now Refinitiv.
Page 1 of 12© 2019 Thomson Reuters. All rights reserved.
SAMPLE
INDICATOR COMPONENTS
The AVERAGE SCORE combines the quantitative analysis of six widely-used investment decision making tools: Earnings,Fundamental, Relative Valuation, Risk, Price Momentum and Insider Trading. A simple average of the underlying component ratings isnormally distributed to rank stocks on a 1-10 scale (10 being awarded to the most favorable). These factors may be evaluated differentlyusing alternative methodologies and the importance of individual factors varies across industries, market capitalization and investmentstyles. Additional criteria should always be used to evaluate a stock.
Earnings Fundamental Relative Valuation Risk Price Momentum Insider Trading
OPTIMIZED SCORE
Historically, companies with an optimized scoreof 7 have tended to moderately outperform themarket over the following 12-month period.
As an alternative approach to equally weighting each of the six factors, independentresearch firm, Verus Analytics, conducted a backtest to empirically determine theoptimal factor blend. Results and weighting vary across four different marketcapitalization categories. For large cap stocks, price momentum and insider tradinghistorically provided the most explanatory power among the six factors and areweighted heavily in the current optimized score. Among the small cap universe, theearnings and fundamental factors joined with insider trading and price momentum toexplain returns.
PEER ANALYSIS Currency in USD
PRICE MOMENTUM VALUATION FUNDAMENTAL ANALYSTS
AverageScore Ticker
Price(2019-08-13)
1-MoReturn
3-MoReturn
1-YrReturn
MarketCap
TrailingPE
ForwardPE
DividendYield
NetMargin
LTGForecast
I/B/E/SMean
# ofAnalysts
9 FB 188.45 -8.0% 3.8% 4.7% 451.9B 32.0 21.5 -- 27.3% 22.2% Buy 49
9 BABA 164.03 -3.0% -3.5% -7.7% 414.3B 34.7 25.5 -- 23.2% 24.4% Buy 45
9 GOOGL 1,196.73 4.5% 5.3% -4.2% 356.1B 24.2 23.1 -- 23.4% 9.3% Buy 45
10 V 178.61 -1.0% 13.5% 27.4% 309.2B 34.3 29.8 0.6% 51.5% 15.8% Buy 38
7 MA 274.53 -1.8% 13.7% 35.7% 275.8B 42.3 33.3 0.5% 42.7% 16.9% Buy 38
4 NFLX 312.28 -16.3% -9.6% -8.5% 135.3B 122.5 64.9 -- 6.5% 47.3% Buy 44
8 PYPL 106.04 -11.7% -0.7% 21.9% 123.3B 50.5 33.0 -- 15.4% 19.3% Buy 41
6 UBER 36.45 -17.1% -1.8% -- 67.9B -- -- -- -66.3% -- Buy 34
4 BIDU 97.38 -15.2% -35.7% -55.2% 27.1B 11.8 23.1 -- 19.4% -1.1% Buy 34
9 YNDX 37.53 -6.9% 7.8% 17.1% 10.7B 44.3 20.9 -- 12.3% 42.3% Buy 12
5 SOGO 4.06 4.9% -22.5% -53.9% 477M 23.9 18.8 -- 6.0% -- Hold 7
7.3 Average 236.01 -6.5% -2.7% -2.3% 197.5B 42.0 29.4 0.5% 14.7% 21.8% Buy 35.2
PEER COMPANIESFB Facebook Inc PYPL PayPal Holdings IncBABA Alibaba Group Holding UBER Uber Technologies IncV Visa Inc BIDU Baidu IncMA Mastercard Inc YNDX YandexNFLX Netflix Inc SOGO Sogou Inc
ALPHABET INC (GOOGL-O)Software & IT Services / Software & IT Services / Online Services
STOCKREPORTS+DETAILED STOCK REPORT
Report Date: 2019 August 14
The Financial andRisk business ofThomson Reutersis now Refinitiv.
Page 2 of 12© 2019 Thomson Reuters. All rights reserved.
SAMPLE
EARNINGS
POSITIVE OUTLOOK: Strong earnings withrecent analyst upgrades or a history ofsurpassing consensus estimates.
Currency in USD
Earnings Score Averages
Software & IT Services Group: 6.5 Mega Market Cap: 7.4Software & IT Services Sector: 6.5 S&P 500 Index: 6.5
Positive
Neutral
Negative
Earnings Score Trend (4-Week Moving Avg)
2016-08 2017-08 2018-08 2019-08
Peers -6M -3M -1M -1W Current 1Y Trend
FB 10 9 7 9 9
GOOGL 9 2 2 9 9
BIDU 6 8 5 5 6
YNDX 6 4 4 7 6
SOGO 8 6 4 6 3
EARNINGS INDICATORSEarnings Surprises
(33.3% weight)Estimate Revisions
(33.3% weight)Recommendation Changes
(33.3% weight)
BIDUGOOGLSOGO
FBYNDX
FBGOOGLYNDX
BIDU
SOGO
FB
YNDXGOOGL
SOGOBIDU
Last 4 Quarters Last 4 Weeks Last 120 Days
# Positive Surprises (> 2%) 3 # Up Revisions 27 # Broker Upgrades 1# Negative Surprises (< -2%) 1 # Down Revisions 9 # Broker Downgrades 2# In-Line Surprises (within 2%) 0 Avg Up Revisions 58.7%Avg Surprise 14.7% Avg Down Revisions -19.6%
HIGHLIGHTS PRICE TARGET- Alphabet Inc currently has an Earnings Rating of 9, with two of three
components rated as bullish (7 or greater). The average EarningsRating for its Online Services industry is 7.0 and the S&P 500 indexaverage is 6.5.
- On 2019-07-25, the company announced quarterly earnings of 14.21per share, a positive surprise of 25.8% above the consensus 11.30.Over the past 4 quarters, the company has reported 3 positive, 1negative, and 0 in-line surprises. The average surprise for this timeperiod has been 14.7%.
- GOOGL's current quarter consensus estimate has increased over thepast 90 days from 12.03 to 12.44, a rise of 3.4%. Consensusestimates for the Online Services industry have moved an average -4.0% during the same time period.
The chart indicates where analysts predict the stock price will be withinthe next 12 months, as compared to the current price.
2,000
1,800
1,600
1,400
1,200
1,000Current Price
(USD)Price Target
1,196.73MEAN
HIGH
LOW
12-Month Price Target
Mean (USD) 1,410.00High 1,880.00Low 1,230.00Target vs. Current 17.8%# of Analysts 44
ALPHABET INC (GOOGL-O)Software & IT Services / Software & IT Services / Online Services
STOCKREPORTS+DETAILED STOCK REPORT
Report Date: 2019 August 14
The Financial andRisk business ofThomson Reutersis now Refinitiv.
Page 3 of 12© 2019 Thomson Reuters. All rights reserved.
SAMPLE
EARNINGS PER SHARE
Earnings per share (EPS) is calculatedby dividing a company's earnings by thenumber of shares outstanding. Analyststend to interpret a pattern of increasingearnings as a sign of strength and flator falling earnings as a sign ofweakness.
The charts provide a comparisonbetween a company's actual andestimated EPS, including the high andlow forecasts.
18.00
16.00
14.00
12.00
10.00
8.0018-09 18-12 19-03 19-06 19-09 19-12
Actuals Estimates
13.06 12.77
9.50
14.21
MEAN
HIGH
LOW
Quarterly 19-09 19-12Mean 12.440 13.000High 15.330 16.070Low 10.830 10.880# of Analysts 35 34
72.00
63.00
54.00
45.00
36.00
27.002017 2018 2019 2020
Actuals Estimates
32.01
43.70
MEAN
HIGH
LOW
Annual 2019 2020Mean 48.750 55.690High 52.180 65.870Low 44.820 48.000# of Analysts 34 39
MEAN ESTIMATE TREND ANALYST RECOMMENDATIONSQ
19-09Q
19-12Y
2019Y
2020Price
TargetCurrent 12.440 13.000 48.750 55.690 1,410.0030 Days Ago 12.010 12.480 45.380 53.570 1,340.0090 Days Ago 12.030 12.540 45.410 53.620 1,340.00% Change (90 Days) 3.4% 3.7% 7.4% 3.9% 5.2%
Current Fiscal Year End: 19-12Next Expected Report Date: 2019-10-23
Thomson Reuters I/B/E/S Mean: Buy (45 Analysts)
Strong Buy
Buy
Hold
Reduce
Sell
15
25
5
0
0
EARNINGS SURPRISESComparing a company's actual earnings to the mean expectation ofanalysts results in a difference referred to as a 'positive' or 'negative'surprise. Research has shown that when a company reports asurprise, it is often followed by more of the same surprise type.
Surprise Detail (Last 6 Periods)
SurpriseType
AnnounceDate
Period EndDate
ActualEPS
MeanEPS
Surprise(%)
Positive 2019-07-25 2019-06-30 14.210 11.300 25.8%Negative 2019-04-29 2019-03-31 9.500 10.610 -10.5%Positive 2019-02-04 2018-12-31 12.770 10.820 18.0%Positive 2018-10-25 2018-09-30 13.060 10.420 25.3%Negative 2018-07-23 2018-06-30 4.540 9.592 -52.7%Positive 2018-04-23 2018-03-31 13.330 9.281 43.6%
Surprise Summary (Last 12 Quarters)
Surprise Type Amount PercentPositive Quarters (> 2%) 8 66.7%Negative Quarters (< -2%) 4 33.3%In-Line Quarters (within 2%) 0 --
ANNUAL REVENUEA pattern of increasing sales inconjunction with a rising EPS mayinfluence a buy recommendation, whileflat or falling sales and falteringearnings may explain a sellrecommendation. A rising EPS with flator falling sales may result fromincreased cost efficiency and margins,rather than market expansion. Thischart shows the sales forecast trend ofall analysts and the highest and lowestprojections for the current and nextfiscal year.
200B
180B
160B
140B
120B
100B2017 2018 2019 2020
Actuals Estimates
110.9B
136.8B
MEANHIGH
LOW2019 2020
Mean 162.5B 190.9BHigh 165.3B 195.9BLow 161.0B 186.5BForecasted Growth 18.8% 39.5%# of Analysts 33 34
ALPHABET INC (GOOGL-O)Software & IT Services / Software & IT Services / Online Services
STOCKREPORTS+DETAILED STOCK REPORT
Report Date: 2019 August 14
The Financial andRisk business ofThomson Reutersis now Refinitiv.
Page 4 of 12© 2019 Thomson Reuters. All rights reserved.
SAMPLE
FUNDAMENTAL
POSITIVE OUTLOOK: Strong fundamentalssuch as high profit margins, low debt levels, orgrowing dividends.
Fundamental Score Averages
Software & IT Services Group: 5.4 Mega Market Cap: 6.1Software & IT Services Sector: 5.4 S&P 500 Index: 6.0
Positive
Neutral
Negative
Fundamental Score Trend
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q22017 2018
PeersQ3
2018Q4
2018Q1
2019Q2
2019 Current 3Y Trend
FB 10 8 NR NR 10
GOOGL 10 10 NR NR 10
SOGO 10 10 NR NR 10
YNDX 10 10 NR NR 10
BIDU 9 4 NR NR 4
FUNDAMENTAL INDICATORSProfitability(25% weight)
Debt(25% weight)
Earnings Quality(25% weight)
Dividend(25% weight)
FBGOOGLYNDX
BIDUSOGO
FBGOOGLSOGOYNDX
BIDU
SOGOYNDX
FBGOOGL
BIDU
BIDUFBGOOGLSOGOYNDX
Revenue Growth 19.7%For year over yearending 2019-06Gross Margin 55.8%For latest 12 monthsending 2019-06Return On Equity 19.6%For interim periodending 2019-06Net Margin 23.4%For latest 12 monthsending 2019-06
Current Ratio 4.0For interim periodending 2019-06Debt-to-Capital 2.2%For annual periodending 2018-12Interest Funding 0.3%For interim periodending 2019-03Interest Coverage 487.5For interim periodending 2019-06
Oper. Cash Yield 38.1%For latest 12 monthsending 2018-12Accruals 17.8%For latest 12 monthsending 2018-12Days Sales In Inv. 6.7For annual periodending 2018-12Days Sales In Rec. 53.2For annual periodending 2018-12
Dividend Growth --For year over yearending --Dividend Payout --For latest 12 monthsending --Dividend Coverage --For annual periodending --Current Div. Yield --For latest 12 monthsending --
HIGHLIGHTS- Alphabet Inc currently has a Fundamental Rating of 10, which is
significantly more bullish than the Online Services industry average of6.4.
- The company's net margin has been higher than its industry averagefor each of the past five years.
- The company's current ratio has been higher than its industry averagefor each of the past five years.
- The company's accruals ratio has been higher than its industryaverage for each of the past five years.
- Alphabet Inc does not currently pay a dividend. Of 89 firms within theOnline Services industry, it is among the 83 companies without adividend.
ALPHABET INC (GOOGL-O)Software & IT Services / Software & IT Services / Online Services
STOCKREPORTS+DETAILED STOCK REPORT
Report Date: 2019 August 14
The Financial andRisk business ofThomson Reutersis now Refinitiv.
Page 5 of 12© 2019 Thomson Reuters. All rights reserved.
SAMPLE
RELATIVE VALUATION
NEGATIVE OUTLOOK: Multiples significantlyabove the market or the stock's historic norms.
Relative Valuation Score Averages
Software & IT Services Group: 4.1 Mega Market Cap: 4.3Software & IT Services Sector: 4.1 S&P 500 Index: 4.8
Positive
Neutral
Negative
Relative Valuation Score Trend (4-Week Moving Avg)
2016-08 2017-08 2018-08 2019-08
Peers -6M -3M -1M -1W Current 1Y Trend
YNDX 8 8 8 7 7
BIDU 7 7 7 6 6
FB 4 5 5 7 6
SOGO 4 4 4 3 5
GOOGL 4 4 4 2 2
RELATIVE VALUATION INDICATORSForward PEG
(50% weight)Trailing PE(25% weight)
Forward PE(25% weight)
YNDXFB
GOOGL
BIDUSOGO
BIDU
GOOGLSOGOFB
YNDX
SOGOYNDXBIDUFB
GOOGL
Forward PEG 2.5
5-Yr Average 1.3
Rel. to 5-Yr Avg. 85% Premium
S&P 500 Index 1.7
Rel. to S&P 500 50% Premium
Trailing PE 24.2
5-Yr Average 34.3
Rel. to 5-Yr Avg. 30% Discount
S&P 500 Index 21.8
Rel. to S&P 500 11% Premium
Forward PE 23.1
5-Yr Average 23.3
Rel. to 5-Yr Avg. 0.7% Discount
S&P 500 Index 17.3
Rel. to S&P 500 33% Premium
HIGHLIGHTS- Alphabet Inc currently has a Relative Valuation Rating of 2 which is
significantly below the S&P 500 index average rating of 4.8.- GOOGL's 2.5 Forward PEG is currently at the high end of its 5-year
range (lowest 1.0 to highest 2.5).
- GOOGL's 24.2 Trailing P/E is currently at the low end of its 5-yearrange (lowest 24.0 to highest 64.6).
- GOOGL's Forward P/E of 23.1 represents a 0.7% Discount to its 5-year average of 23.3.
ALPHABET INC (GOOGL-O)Software & IT Services / Software & IT Services / Online Services
STOCKREPORTS+DETAILED STOCK REPORT
Report Date: 2019 August 14
The Financial andRisk business ofThomson Reutersis now Refinitiv.
Page 6 of 12© 2019 Thomson Reuters. All rights reserved.
SAMPLE
PRICE TO SALESThe most recent week's close price divided by the revenue per share.
Price to Sales: 2.45-Year Average: 2.7
S&P 500 Index Average: 2.1Online Services Industry Average: 4.6
2.22.42.62.83.03.23.43.63.84.04.2
20192018201720162015
5-Yr Average
TRAILING PEThe most recent week's close price divided by the sum of the four mostrecently reported quarterly earnings.
Trailing PE: 24.25-Year Average: 34.3
S&P 500 Index Average: 21.8Online Services Industry Average: 37.7
05
1015202530354045
>50
20192018201720162015
5-Yr Average
FORWARD PEThe most recent week's close price divided by the sum of the fourupcoming quarterly consensus estimates.
Forward PE: 23.15-Year Average: 23.3
S&P 500 Index Average: 17.3Online Services Industry Average: 30.8
1618202224262830323436
20192018201720162015
5-Yr Average
FORWARD PEGThe Forward P/E divided by the five-year forecasted growth rate.
Forward PEG: 2.55-Year Average: 1.3
S&P 500 Index Average: 1.7Online Services Industry Average: 1.4
1.01.21.41.61.82.02.22.42.62.83.0
20192018201720162015
5-Yr Average
ALPHABET INC (GOOGL-O)Software & IT Services / Software & IT Services / Online Services
STOCKREPORTS+DETAILED STOCK REPORT
Report Date: 2019 August 14
The Financial andRisk business ofThomson Reutersis now Refinitiv.
Page 7 of 12© 2019 Thomson Reuters. All rights reserved.
SAMPLE
RISK
NEUTRAL OUTLOOK: Moderate risk (mediumvolatility).
Risk Score Averages
Software & IT Services Group: 4.6 Mega Market Cap: 8.9Software & IT Services Sector: 4.6 S&P 500 Index: 8.2
Positive
Neutral
Negative
Risk Score Trend (4-Week Moving Avg)
2016-08 2017-08 2018-08 2019-08
Peers -6M -3M -1M -1W Current 1Y Trend
FB 6 6 7 7 7
GOOGL 8 8 8 7 7
BIDU 7 6 5 5 6
YNDX 5 4 6 6 6
SOGO 4 4 5 4 4
RISK INDICATORSMagnitude of Returns
(25% weight)Volatility
(25% weight)Beta (1-year)(25% weight)
Correlation(25% weight)
FBGOOGLSOGOYNDXBIDU
GOOGLFB
BIDUYNDX
SOGO
BIDUYNDXFBSOGOGOOGL
BIDUFBGOOGLYNDXSOGO
Daily Returns (Last 90 Days)Best 9.6%Worst -6.1%Monthly Returns (Last 60 Months)Best 21.8%Worst -9.7%
Standard DeviationLast 90 Days 1.91Last 60 Months 6.06Intra-Day Swing (Last 90 Days)Average 1.7%Largest 4.9%
Beta vs. S&P 500 1.30Positive Days Only 1.49Negative Days Only 1.12Beta vs. Group 1.00Positive Days Only 1.07Negative Days Only 0.97
Correlation vs. S&P 500Last 90 Days 58%Last 60 Months 56%Correlation vs. GroupLast 90 Days 65%Last 60 Months 45%
HIGHLIGHTS- Alphabet Inc currently has a Risk Rating of 7 while the S&P 500
index has an average rating of 8.2.- On days when the market is up, GOOGL shares tends to
outperform the S&P 500 index. However, on days when themarket is down, the shares generally decrease by more thanthe index.
- In both short-term and long-term periods, GOOGL has shownhigh correlation (>= 0.4) with the S&P 500 index. Thus, thisstock would provide only low levels of diversification to aportfolio similar to the broader market.
- Over the last 90 days, GOOGL shares have been more volatilethan the overall market, as the stock's daily price fluctuationshave exceeded that of 78% of S&P 500 index firms.
RISK ANALYSISLast 90 Days Last 60 Months
Peers
BestDaily
Return
WorstDaily
Return
#Days
Up
#Days
Down
LargestIntra-Day
Swing
BestMonthlyReturn
WorstMonthlyReturn
GOOGL 9.6% -6.1% 35 29 4.9% 21.8% -9.7%
BIDU 3.4% -16.5% 28 36 5.6% 36.4% -33.8%
FB 4.2% -7.5% 35 28 8.6% 27.2% -11.2%
SOGO 9.4% -11.7% 27 36 19.1% 21.9% -26.7%
YNDX 6.2% -4.0% 39 25 17.6% 50.1% -27.9%
S&P 500 2.1% -3.0% 33 30 2.7% 8.3% -9.2%
ALPHABET INC (GOOGL-O)Software & IT Services / Software & IT Services / Online Services
STOCKREPORTS+DETAILED STOCK REPORT
Report Date: 2019 August 14
The Financial andRisk business ofThomson Reutersis now Refinitiv.
Page 8 of 12© 2019 Thomson Reuters. All rights reserved.
SAMPLE
PRICE MOMENTUM
POSITIVE OUTLOOK: Strong recent priceperformance or entering historically favorableseasonal period.
Currency in USD
Price Momentum Score Averages
Software & IT Services Group: 6.4 Mega Market Cap: 7.5Software & IT Services Sector: 6.4 S&P 500 Index: 6.6
Positive
Neutral
Negative
Price Momentum Score Trend (4-Week Moving Avg)
2016-08 2017-08 2018-08 2019-08
Peers -6M -3M -1M -1W Current 1Y Trend
GOOGL 6 6 9 10 10
FB 9 10 10 9 9
YNDX 9 7 8 7 7
SOGO 4 2 2 3 5
BIDU 5 2 3 3 2
PRICE MOMENTUM INDICATORSRelative Strength
(70% weight)Seasonality(30% weight)
GOOGL
FBYNDXSOGO
BIDU
FBGOOGLBIDUSOGO
YNDX
Relative Strength Indicator (Scale from 1 to 100)GOOGL Industry Avg
Last 1 Month 56 44Last 3 Months 53 47Last 6 Months 52 48
Average Monthly Return (Last 10 Years)AUG SEP OCT
Company Avg -1.2% 3.7% 5.7%Industry Avg -0.7% 2.9% 1.1%Industry Rank 69 of 123 14 of 121 70 of 120
PRICE PERFORMANCEDaily close prices are used to calculate theperformance of the stock as compared to arelevant index over five time periods.
GOOGL
NASDAQ 100
1-Week
1-Month
3-Month
YTD
1-Year
2.2%2.8%
4.5%-2.7%
5.3%5.5%
14.5%22.1%
-4.2%4.4%
GOOGL NASDAQ 100Close Price (2019-08-13) 1,196.73 7,72852-Week High 1,296.98 8,01752-Week Low 977.66 5,899
- The Price Momentum Rating for Alphabet Inc is at its 3-yearhigh of 10.
- On 2019-08-13, GOOGL closed at 1,196.73, 7.7% below its52-week high and 22.4% above its 52-week low.
- GOOGL shares are currently trading 5.5% above their 50-daymoving average of 1,134.63, and 6.0% above their 200-daymoving average of 1,128.73.
ALPHABET INC (GOOGL-O)Software & IT Services / Software & IT Services / Online Services
STOCKREPORTS+DETAILED STOCK REPORT
Report Date: 2019 August 14
The Financial andRisk business ofThomson Reutersis now Refinitiv.
Page 9 of 12© 2019 Thomson Reuters. All rights reserved.
SAMPLE
INSIDER TRADING
NEUTRAL OUTLOOK: Mixed transactions byinsiders or low volume of trades.
Currency in USD
Insider Trading Score Averages
Software & IT Services Group: 3.9 Mega Market Cap: 3.6Software & IT Services Sector: 3.9 S&P 500 Index: 4.1
Positive
Neutral
Negative
Insider Trading Score Trend (4-Week Moving Avg)
2016-08 2017-08 2018-08 2019-08
Peers -6M -3M -1M -1W Current 1Y Trend
GOOGL 3 4 5 4 4
FB 1 1 1 1 1
BIDU NR NR NR NR NR
SOGO NR NR NR NR NR
YNDX NR NR NR NR NR
INSIDER TRADING INDICATORSShort-Term Insider
(70% weight)Long-Term Insider
(30% weight)
GOOGL
FB
BIDUSOGOYNDX
GOOGL
FB
BIDUSOGOYNDX
Most Recent Buys and Sells (Last 90 Days)Insider Name Role Tran Date Tran Type SharesDrummond, David C O 2019-08-01 S 800Hennessy, John L D 2019-07-29 S 75
Insider Summary (Last 6 Months)Total Shares Acquired 30,114Total Shares Disposed 59,359Net Shares -29,245Sector Average 1,869,862
HIGHLIGHTS- Alphabet Inc currently has an Insider Trading Rating of 4, while the
Online Services industry average is 3.86.
- Executives at Alphabet Inc have not purchased or sold any sharesthus far this quarter. Over the past five years, the average purchaseand sell totals for Q3 have been $0 and $0 respectively.
MONTHLY BUYS AND SELLS
0
S O N D J F M A M J J A
BUYS
SELLS
No insider activity during the past year50
50
100
100
$ Market Value
Excludesderivativeand optionexercises
TOP INSTITUTIONAL HOLDERS
Institution NameInst.Type
%O/S
SharesHeld
ReportedDate
The Vanguard Group Inc Inv Mgmt 7.4% 22.2M 2019-03-31Fidelity Management Inv Mgmt 4.9% 14.8M 2019-03-31BlackRock Institutional Inv Mgmt 4.3% 12.8M 2019-03-31State Street Global Inv Mgmt 3.8% 11.5M 2019-03-31T. Rowe Price Associates Inv Mgmt 2.4% 7.09M 2019-03-31
Updated daily as of 2019-08-13
TOP EXECUTIVE HOLDERS
Insider Name RoleDirect
Shares ValueReportedDate
Shriram, Kavitark Ram D 64,112 72.5M 2019-07-05Schmidt, Eric E D 18,882 21.4M 2019-02-25Brin, Sergey P 12,000 13.6M 2017-08-10Tilghman, Shirley M D 6,036 6.83M 2018-02-09Pichai, Sundar OD 5,473 6.19M 2019-06-26
Updated monthly as of 2019-07-21
ALPHABET INC (GOOGL-O)Software & IT Services / Software & IT Services / Online Services
STOCKREPORTS+DETAILED STOCK REPORT
Report Date: 2019 August 14
The Financial andRisk business ofThomson Reutersis now Refinitiv.
Page 10 of 12© 2019 Thomson Reuters. All rights reserved.
SAMPLE
DETAILED STOCK REPORT TIPS
The Thomson Reuters Stock Report is a comprehensive, company-specific analysis that includes a proprietary Stock Rating along with underlying component indicators and supportive data elements. The report is updated daily, although some of the data elements and the ratings are updated weekly.
Average Score The Average Score combines a quantitative analysis of six widely-used investment decision making tools - Earnings, Fundamental, Relative Valuation, Risk, Price Momentum, and Insider Trading. First, a simple average of the six underlying component ratings is calculated. Then, a normal distribution is used to rank each stock across the market on a scale of 1 to 10, with 10 being most favorable. A score of 8 to 10 is considered positive, 4 to 7 is neutral, and 1 to 3 is negative. These six factors may be evaluated differently using alternative methodologies, and the importance of individual factors varies across groups, market capitalization and investment styles. Additional criteria should always be used to evaluate a stock.
A company must have sufficient data available for at least four of the six component indicators in order to receive an overall Average Score. Approximately 85% of the stocks within the coverage universe meet the criteria to generate a score.
Optimized Score As an alternative to the average score, the Stock Report includes an Optimized Score generated by independent research firm, Verus Analytics. It uses the same six component ratings, but rather than equally weighting each of the factors, the weighting varies by market capitalization of the underlying security based on backtesting research. These scores are also updated weekly and distributed normally on a 1 to 10 scale, with 10 being best. The variable size is assigned monthly by ranking the market capitalization and assigning the appropriate category as follows:
Large - Top 5.55% Mid - Next 13.87% Small - Next 34.68% Micro - Remaining 45.9%
Indicator Components The six indicators that comprise the stock rating are displayed. Like the stock rating, the component rating scale is 1 to 10, with 10 being best. A company will receive an ‘NR’ for No Rating if the required data elements or criteria are not met. A detailed section for each component is included in the report.
Indicator Trends Within each component section, historical score trends are displayed, typically using a 4-week moving average over a timeframe of the past three years. The dotted orange line indicates the average of the scores over those three years. The most recent occurrences of the best and worst scores are also displayed on the chart in grey boxes to put the current score into historical context.
Next to the trend chart for the company, current score averages are included, along with peer company comparisons of values from 6 months ago, 3 months ago, 1 month ago, the most recent value from 1 week ago, and the current score. The four closest industry peers are presented based on similar market capitalization.
Peer Analysis ● The Thomson Reuters Business Classification (TRBC) system is used for
industry comparisons. It is designed to track and display the primary business of a corporation by grouping together correlated companies that offer products and services into similar end markets. The system includes 10 Economic Sectors, 28 Business Sectors, 54 Industry Groups, and 136 Industries.
● The Peer Analysis section of the report compares the company to its ten closest peers. The peers are selected from the industry based on similar market capitalization. The peer listing may have fewer than ten companies if there are fewer than ten companies classified within that industry.
Highlights The Thomson Reuters proprietary automated text-generation system creates highlights summarizing the most noteworthy data. The bullets will vary by company and will change from week to week as different criteria are met.
Earnings The Earnings Rating is based on a combination of three factors: earnings surprises, estimate revisions, and recommendation changes. Each factor is equally weighted. Then, equal deciles are used to rank each stock across the market on a scale of 1 to 10, with 10 being most favorable. A stock needs to have at least two of the three earnings factors in order to receive a score.
● Earnings Surprises - The number of positive and negative surprises within the last 4 quarters.
● Estimate Revisions - The number of up and down revisions and the average percentage change of those revisions within a 4 week period.
● Recommendation Changes - The number of broker upgrades and downgrades in the last 120 days.
Price Target The price target is based on the predictions of analysts covering the stock and shows the high, low and mean price expected within the next 12 months.
Earnings Per Share The quarterly and annual earnings per share are presented when available, along with the mean, high and low. Quarterly data is displayed for the past 4 quarters (actual) and the next 2 quarters (estimated). Annual data is displayed for the past 2 years (actual) and the next 2 years (estimated).
Mean Estimate Trend The mean estimates show how the consensus has changed over the past 30 days and 90 days for the upcoming two quarters and two years. The percentage change is calculated for the company as a means for comparison by measuring the difference between the current consensus estimate and that of 90 days ago.
Analyst Recommendations The I/B/E/S Mean is the average recommendation of all analysts covering the stock, as provided by Thomson Reuters I/B/E/S (Institutional Brokers Estimate System). The recommendations are presented on a five-point standardized scale: strong buy, buy, hold, reduce, and sell.
Earnings Surprises ● The surprise summary includes the total number of quarters (and percentage) in
the past 12 quarters in which earnings surprises were positive, negative, or in-line. In order to be recognized as a positive or negative surprise, the percent must be greater than 2% above or 2% below the consensus, respectively.
● The surprise detail section includes a listing of the company's quarterly earnings reported for the most recent 6 quarters. The consensus analyst estimate is provided to determine if the actual earnings report represented a positive surprise, negative surprise, or in-line result.
Fundamental The Fundamental Rating is based on a combination of four factors: profitability, debt, earnings quality, and dividend. Companies that do not pay a dividend are not penalized. Each factor is equally weighted. Then, equal deciles are used to rank each stock across the market on a scale of 1 to 10, with 10 being most favorable. A stock needs to have at least two of the four fundamental factors present for a given fiscal quarter in order to receive a score.
● Profitability is comprised of four data elements. - Revenue Growth: (Net Sales – Previous Net Sales) / Previous Net Sales - Gross Margin: Gross Profit / Net Sales - Return on Equity: Net Income / Total Equity - Net Margin: Net Profit / Net Sales
● Debt is comprised of four data elements.- Current Ratio: Current Assets / Current Liabilities - Debt-to-Capital: Total Debt / Total Capital - Interest Funding: (Interest Expense on Debt + Preferred Cash Dividends) /
Funds from Operations - Interest Coverage: Earnings before Interest and Taxes / (Interest Expense on
Debt + Preferred Cash Dividends) ● Earnings Quality is comprised of four data elements.
- Operating Cash Yield: (Operating Cash Flow – Net Income) / Net Income - Accruals: (Net Income – Operating Cash Flow – Investing Cash Flow) /
Average Net Operating Assets - Days Sales in Inventory: 365 / (Cost of Goods Sold / Inventory) - Days Sales in Receivables: 365 / (Net Sales / Receivables)
● Dividend is comprised of four data elements. The company must have a current dividend yield. - Dividend Growth Rate: (Dividends per Share – Previous Dividends per Share)
/ Previous Dividends per Share - Dividend Payout: Dividends per Share / Earnings per Share - Dividend Coverage: Funds from Operations / Cash Dividends - Dividend Yield: Annual Dividends per Share / Current Market Price per Share
Indicator Trend The fundamental indicator trend displays quarterly scores over the past three years. The best and worst scores over that timeframe can be easily determined from the values shown on the chart for each quarter.
ALPHABET INC (GOOGL-O)Software & IT Services / Software & IT Services / Online Services
STOCKREPORTS+DETAILED STOCK REPORT
Report Date: 2019 August 14
The Financial andRisk business ofThomson Reutersis now Refinitiv.
Page 11 of 12© 2019 Thomson Reuters. All rights reserved.
SAMPLE
Relative Valuation The Relative Valuation Rating is based on a combination of three factors: Forward PEG (50% weight), Trailing P/E (25% weight), and Forward P/E (25% weight). After the weightings are considered to combine individual factors, equal deciles are used to rank each stock across the market on a scale of 1 to 10, with 10 being most favorable. These common valuation metrics are evaluated against the overall market, the index, and the company's own historic 5-year averages. A stock needs to have at least one of the three relative valuation factors in order to receive a score.
● Trailing P/E: Close Price / Most Recent 4 Quarters of Earnings ● Forward P/E: Close Price/ Upcoming 4 Quarters of Earnings● Forward PEG: Forward P/E / Long-Term Forecasted Growth Rate
Valuation Averages Negative values are excluded when calculating the averages. A maximum value of 100 is placed on Trailing P/E and Forward P/E, a maximum value of 5 is placed on Forward PEG, and a maximum value of 20 is placed on Price to Sales when calculating the averages. Higher values are rounded down to the maximum for the averages.
Valuation Multiples The valuation multiples provide the Trailing P/E, Forward P/E, Forward PEG, and Price to Sales for the company and the S&P 500 index average. In addition, a comparison of the current company’s values to its 5-year average and an industry average are presented. A discount occurs when the company’s ratio is valued more favorably (lower) than that to which it is compared.
Risk The Risk Rating displays stocks on a scale of 1 to 10 with 10 being awarded to the least risky stocks. It is derived by looking at a series of long-term (5-year) and short-term (90-day) stock performance measures including volatility, magnitude of returns, beta, and correlation. Each factor is equally weighted. Then, equal deciles are used to rank each stock across the market. A stock needs to have at least two of the four risk factors in order to receive a score.
● Magnitude of Returns – The best / worst daily returns in the past 90 days and the best / worst monthly returns in the past 60 months.
● Volatility – The standard deviation of the stock price over the last 90 days and last 60 months, along with the average and largest intra-day stock swing.
● Beta – Measures the tendency of a security’s returns to respond to swings in the market, based on the beta of the company versus the relevant index.
● Correlation – Determines how closely the returns of the stock and the relevant index move together, measured over the last 90 days and last 60 months.
Risk Analysis Price analysis for the company and the S&P 500 is provided over two time periods. Daily analysis is provided for the last 90 days, whereas monthly statistics are used for the last 60 months.
Price Momentum The Price Momentum Rating is based on a combination of two technical performance factors: relative strength (70% weight) and seasonality (30% weight). After the weightings are considered to combine individual factors, equal deciles are used to rank each stock across the market on a scale of 1 to 10, with 10 being most favorable. A stock needs to have data for the relative strength factor in order to receive a score.
● Relative Strength – The relative strength of the company for the last 1 month, 3 months, and 6 months on a scale of 1 to 100.
● Seasonality – The average monthly return (price performance) for the currentmonth and next 2 months for the company and industry, over the past 10 years. A lower industry rank indicates a higher return.
Price Performance Daily close prices are used to calculate the price performance of the stock. The performance of the S&P 500 is also displayed as a means of comparison.
Insider Trading The Insider Trading Rating is based on short-term (70% weight) and long-term (30% weight) legal insider trading behavior. After the weightings are considered to combine individual factors, a function similar to a normal distribution is used to rank each stock across the market on a scale of 1 to 10, with 10 being most favorable. A stock needs to have at least one of the two insider trading factors in order to receive a score.
● Short-Term Insider – Uses insider buy and sell transactions within the past 90 days. This factor is based on the Thomson Reuters quantitative insider trading model that considers the insider's role, consensus, number of shares, market capitalization of the company, and the historic stock performance following trades by the given insider.
● Long-Term Insider – Looks at buying, selling and option exercise decisions over the past six months relative to other stocks within the same business sector. The net shares are presented alongside the business sector average as a means of comparison.
Monthly Buys and Sells The total market value of open-market buying and selling is displayed by month in the chart for easy comparison. Transactions by trusts and corporations are excluded, along with buys greater than $10 million and sales greater than $50 million. Transactions for the exercise of derivatives and option exercises are excluded from the totals.
Institutional Holders The top five institutional holders of the company are listed in descending order, based on their total share holdings. Possible values for the institution type include Brokerage, Funds, Inv Mgmt, or Strategic.
Executive Holders The top five executive insiders of the company are listed in descending order, based on their total direct common share holdings (options are not considered). Indirect holdings are excluded, as the owner may not actually have investment discretion over these shares. This table is updated monthly. Insiders who have not filed any transactions or holdings over the past two years are excluded as this may indicate that the individual is no longer associated with the company. Additionally, direct shares held must be greater than 1,000 to be considered.
Insider Roles These role codes may appear in the data for recent insider buys and sells or top executive holders:
AF - Affiliate IA - Investment Advisor AI - Affiliate of Advisor MC - Member of Committee B - Beneficial Owner MD - Managing Director C - Controller O - Officer CB - Chairman OB - Officer / Beneficial Owner CEO - Chief Executive Officer OD - Officer / Director CFO - Chief Financial Officer OE - Other Executive CI - Chief Investment Officer OS - Officer of Subsidiary CO - Chief Operating Officer OT - Officer / Treasurer CT - Chief Technology Officer OX - Divisional Officer D - Director P - President DO - Director / Beneficial Owner R - Retired DS - Indirect Shareholder S - Secretary EC - Member of Exec Committee SH - Shareholder EVP - Exec Vice President SVP - Senior Vice President FO - Former T - Trustee GC - General Counsel UT - Unknown GP - General Partner VC - Vice Chairman H - Officer / Director / Owner VP - Vice President
DISCLAIMER
Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. All information in this report is assumed to be accurate to the best of our ability. Thomson Reuters is not liable for any errors or delays in Thomson Reuters content, or for any actions taken in reliance on such content.
Any forward-looking statements included in the Thomson Reuters content are based on certain assumptions and are subject to a number of risks and uncertainties that could cause actual results to differ materially from current expectations. There is no assurance that any forward-looking statements will materialize.
The content in this Thomson Reuters report does not constitute investment advice or a recommendation to buy or sell securities of any kind. Past performance is not a guarantee of future results. Investors should consider this report as only a single factor when making an investment decision.
ALPHABET INC (GOOGL-O)Software & IT Services / Software & IT Services / Online Services
STOCKREPORTS+DETAILED STOCK REPORT
Report Date: 2019 August 14
The Financial andRisk business ofThomson Reutersis now Refinitiv.
Page 12 of 12© 2019 Thomson Reuters. All rights reserved.
SAMPLE