New Highs for Nasdaq as Analysts Circle FAANG

It was a rough week for oil prices, though

Jul 13, 2018 at 2:29 PM
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Quarterly earnings reports began trickling in this week, with several big banks reporting on Friday. Outside of the earnings confessional, the focus remained on global trade, with President Donald Trump threatening additional tariffs on Chinese goods -- which, along with plummeting oil prices, effectively snapped the Dow Jones Industrial Average's (DJI) daily win streak on Wednesday. Nevertheless, the major stock market indexes are set to end the week on a high note, and the Nasdaq Composite (IXIC) and Russell 2000 Index (RUT) both secured fresh record highs.

Earnings Season Kicks Off

PepsiCo (PEP) options traders were betting bearishly ahead of earnings. However, PEP stock popped higher after the company beat expectations. Meanwhile, Delta Air Lines (DAL) also reported stronger-than-expected earnings. Bank earnings were in focus on Friday, with Citigroup (C), Wells Fargo (WFC), and JPMorgan Chase (JPM) reporting mixed results.

Analysts Flood FAANG, Affiliates; Surprise Downgrade for NFLX

FAANG stocks remained all the rage this week, with several analysts chiming in. Nomura initiated coverage of Facebook (FB) and Google parent Alphabet (GOOGL) with "buy" ratings, saying increased regulatory scrutiny could end up being a positive. Both FB and GOOGL hit all-time highs. Amazon (AMZN) stock also touched a record high, and Canaccord Genuity analysts think the shares are headed for $2,000. On the other hand, while positive analyst attention continued to roll in for Netflix (NFLX), the stock was taken aback by a surprise downgrade ahead of earnings next week.

Elsewhere, Evercore ISI said Quest Diagnostics (DGX) could be a "safe haven" during Amazon's push into healthcare, but said the "wall of worry" is too high to climb for new Dow member Walgreens Boots Alliance (WBA). Reports of a FAANG partnership boosted Snapchat parent Snap (SNAP) early in the week, and while social media stock Twitter (TWTR) briefly tumbled on concerns about a key user metric, Goldman Sachs said to buy the dip. Meanwhile, Apple supplier Broadcom (AVGO) got trolled by analysts after a "bizarre" acquisition.

Bearish Notes for AutoNation, Chipotle

Several other stocks were slammed by negative analyst attention this week, too. Morgan Stanley cut its rating on AutoNation (AN) to "underweight," expecting sector turbulence for auto dealers. In fact, this car stock recently flashed a historic "sell" signal.

Elsewhere, Mizuho slapped Chipotle (CMG) stock with a downgrade to "underperform," while Dova Pharmaceuticals (DOVA) took a dive after Leerink chimed in. Online pet pharmacy PetMed Express (PETS) got rocked early in the week, after Craig-Hallum cut its rating to "sell."

Pharma Stocks Make Noise

Speaking of drug stocks, quite a few made headlines this week. Blue chip Pfizer (PFE) was in focus after a scathing Trump tweet about drug prices. Fellow drugmaker Eli Lilly (LLY), meanwhile, was named a top pharma pick by J.P. Morgan Securities. Lesser-known Galmed Pharmaceuticals (GLMD) skyrocketed after analysts predicted the stock will quintuple in the next year.

Galmed wasn't the only penny stock flexing some serious muscle, either. Advaxis (ADXS) stock is higher on a Food and Drug Administration (FDA) nod. Upbeat drug data and an FDA meeting request also boosted Medicinova (MNOV) shares.

Netflix On Deck; Plus, Trading Ideas This Earnings Season

Netflix will step up to the earnings plate on Monday, along with more financial names. Several blue chips will also report earnings next week, and this oil stock is sending up a historic "sell" signal before its quarterly release next week. For options speculators, we identified 25 trading ideas this earnings season.


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