SALESFORCE CRUSHES EARNINGS AND ACQUIRES SLACK, NIKOLA STOCK CONTINUES TO TUMBLE AS WE FINALLY GET THE FIRST VACCINE APPROVAL IN THE UK, LET’S DISCUSS THIS AND MORE ABOUT THE STOCK MARKET
Hey everyone! So, let’s start with the recap of yesterday as we saw the NASDAQ COMPOSITE leading the way up almost 1,3%, finishing at a new record high, the SP500 also up over 1,1% and finishing at a new record high, while the DOW had smaller gains but was still up to intraday records before finishing over +0,6% for the day. The VIX rose for the day after opening at 20,2 and as you can see in this HEAT MAP big gains were led by the FAANG stocks with Apple, Alphabet, Facebook and Netflix gaining over 2% for the day while Amazon and Microsoft also were up at least 1%. This pulled the big indexes higher as they account for a big part of them.
Over 60% of companies were advancing on average volume while companies moving above important moving averages continued to climb as we are going into a very risky market, as to many companies are trading high at the moment and are due for a correction. CHART
The biggest gaining SECTORS yesterday were Communications, Financials and Technology with most sectors being in the green, except industrial, as the laggards from yesterday were small cap growth companies and especially those from CHINA, like NIO, Alibaba and others, that have suffered from the recent news that the US is looking to delist some of them if they do not meet new standards. CHART
Here are the most interesting economic events and data for TODAY, as we will see how Mortgage Applications and ADP Jobs are going. Afterwards a couple of FED leaders will speak before we can take a look at how the Petroleum Inventories are going.
While GREAT NEWS started to pop in the early morning as the UK has become the first country to authorize the Pfizer vaccine for use.
This news are already baked in the market in my opinion as investors were already expecting this to happen sooner rather than later, but this are still very good news to hear, as a confirmation is still great to have, rather than just expectations. I expect the US will soon follow in the next 10-14 days to approve both the Pfizer and Moderna vaccine, that might just have a bigger impact on the stock market, but I would be careful until then, as we might get a correction in the stock market after this huge rally before we can move on even higher, as I fully expect this bull market to continue into 2021 and 2022.
Well yesterday, as I expected Nikola tumbled again after the insider lockup period expired, as only the possibility of Milton selling his shares has spooked the market after an already bad day with the GM deal disappointing investors. As the original deal is null and void with GM not taking any stake in Nikola or helping with the engineering or manufacturing of the Badger pickup truck. The only good thing in sight for the company is the possible hydrogen fueling station network partnership by year end as announced by the management. I maintain my sell opinion on this stock as I predicted a 15-16$ in the future when the stock was trading over 20, I think it has more room to go down, it might go to single digits in the long run, as the company has become very shady after the fiasco with the misleading tactics and no breaking new fuel cell technology.
On the other hand, Salesforce crushed earnings expectations, as they beat the EPS by almost 1$ and had a revenue beat of over 160 million$. They also raised guidance for both revenue and EPS for next year way above the consensus while also maintaining cash and equivalents at over $9B, up 45% for the year.
The company also officially announced the acquiring of Slack in a deal worth almost $28B. This will result in the Slack software being incorporated in every aspect of Salesforce cloud offering. This 2 will be the biggest competitors yet for Microsoft. So, I believe after the dust settles, and CRM stock finally gets back on track, we will have a good long term growth opportunity with Salesforce.
Slack also reported earnings yesterday after the bell as the company posted a beat of estimates and an increase in paid customers and billings.
We also got some numbers from Cyber Monday sales as the spending increase over 15% but, this was not enough to meet all the estimates as holiday shopping has been probably spread through the whole month of November and will continue to go strong in December in my opinion.
While on the economic front news were not so great as the November ISM index fell shy of expectations with light vehicles sales dropping by almost 1 million from last month and are way below the year ago period.
But we did see some big improvements in construction spending, as the numbers came in about half a % better than consensus and are up 3,7% year over year while the November PMI index saw the biggest improvement in over 6 years.
Other interesting news came in as Visa pushed even further in the Bitcoin space and partnered with BlockFi to offer a credit card that offers 1,5% back in Bitcoin instead of $. They will also offer 250$ worth of Bitcoin if you spend more than 3k in the first 3 months, but the card has a pretty high annual fee of 200$.
The biggest earnings that will be released today will be from CrowdStrike and Okta, as I expect both of them to turn out a positive EPS, as we might see some momentum in this stocks if they don’t disappoint.
I greatly expect the IPO of AirBNB, as this could become a company that will benefit a lot from the reopening of the world in the next year or two.
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