STTG Market Recap April 17, 2014

Blain here: Final reminder to take our quarterly reader satisfaction survey. Results will be posted next week. Thanks!

With markets closed for Good Friday, stocks finished off a very good week, retracting a decent portion of the losses we had seen in the previous few weeks.  The coast is still not clear thought for major risk taking – but we are seeing some rebounds in the hardest hit areas, specifically internet, biotech, and momentum stocks.  Today the S&P 500 gained 0.14% and NASDAQ 0.23% after both opened in the red with Google and IBM pressured.  Stocks came off their lows after a gauge of manufacturing activity in the Philadelphia region rose to 16.6 in April from 9.0 in March – this was ahead of expectations.  For the week, the S&P 500 added 2.7% and the NASDAQ advanced 2.4%.

The S&P 500 continues to look in better shape than the NASDAQ; with the latter index we really won’t know what new pattern it is headed for until we see it break over the blue downtrend line.



We noted the NYSE McClellan Oscillator was in the very phase of oversold last week – today it has rallied all the way back to a positive reading.


We’ll use MarketSmith charts today to look at individual names:

Chinese microblogger Weibo made its market debut on the Nasdaq, with shares of the Twitter rival lately trading well above its initial public offering at $17 per share.  Here is a 5 minute chart for the name:


Its parent company Sina (SINA) had a very good day after a dreadful month.


In the earning sphere we had a significant drop in Chipotle Mexican Grill (CMG) but not because of a bad quarter.  Overall revenue rose 24% vs. a year earlier to $904.2 million, above consensus estimates for $873 million. It was the biggest sales gain in two years and continued a long run of double-digit increases.Chipotle’s same-store sales surged 13.4% — even better than the prior quarter’s 9.3% gain.  The stock was hurt due to a proposed price hike coming to offset rising costs:

The Denver-based burrito restaurateur will begin hiking prices in the mid-single digits by the end of the current quarter, CFO Jack Hartung said on a conference call following Chipotle’s Q1 earnings release Thursday.  However, rising costs for beef, avocados and cheese tamped down Chipotle’s Q1 earnings, which came in at $2.64 a share. That was up from $2.35 a year earlier but below views for $2.86. The restaurant-level operating margin fell 40 basis points from the prior year to 25.9%.


Morgan Stanley (MS) rose after the financial services company reported a rise in first-quarter earnings.


General Electric (GE) posted a 12 percent rise in overall industrial profits and its stock gained.


During the correction we mentioned some stocks that held in very well – one was Taiwan Semiconductor (TSM).  Usually stocks that do well during a correction have strong performances once the market stabilizes, so today we saw a nice launch.


Another name that held up well was Southwestern Energy (SWN) which likewise had nice action today.


Have a good long weekend and Happy Easter.

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