In today’s briefing:
- EM Thematic Short
- Treasury Yields Reversing Higher; U.S. Dollar and High Yield Spreads to Follow?
- Thermo Fisher Scientific Inc.: Acquisition Of The Binding Site Group & Other Drivers
- Catalent Inc: An M&A Arbitrage Opportunity? What Could Be A Fair Value For The Danaher Acquisition? (02/23)
- T-Mobile Inc.: Major Drivers
- Alphabet Inc.: The ChatGPT Effect & Impact On Ad Revenues
- First UK Mission’s Root Cause Was a Dislodged Fuel Filter; Space Is Hard
- Amazon.com Inc.: Monetizing From Shopify & Other Merchants & Other Drivers
- AMETEK Inc: Major Drivers
EM Thematic Short
- EEM topped ahead of the DXY 101 bottom (lead) showing strong synergy with our bull DXY and bullish yield charts from last week.
- Bull divergence implies a 2-3 month USD and yield up cycle is in store. EEM rising channel breakdown due.
- HK was the first to crack trendline support. Korea is a weak link. India is one of the clearer shorts. Australia, Taiwan and then Japan are set to roll over.
Treasury Yields Reversing Higher; U.S. Dollar and High Yield Spreads to Follow?
- We continue to expect the 4165-4200 level to cap upside on the S&P 500, but cannot rule out a trip to 4300-4325 (August 2022 highs)
- Either way, we continue to preach caution and believe that upside is limited on the market indexes.
- Treasury yields are starting to reverse above multi-month downtrends, and we are monitoring for similar reversals on the U.S. dollar (DXY) and high yield spreads.
Thermo Fisher Scientific Inc.: Acquisition Of The Binding Site Group & Other Drivers
- Thermo Fisher produced a solid set of results in the fourth quarter, with impressive growth in the low teens for the quarter and mid-teens for the entire year.
- The management saw a decent growth in industrial and produced significant year-over-year growth in the businesses of mass spectrometry, chromatography, and electron microscopy.
- Overall, we give Thermo Fisher a ‘Hold’ rating with a revised target price.
Catalent Inc: An M&A Arbitrage Opportunity? What Could Be A Fair Value For The Danaher Acquisition? (02/23)
- This is a special, one-time report on Catalent, a leading contract manufacturer and provider of advanced delivery technologies, development, and manufacturing solutions for drugs, biologics, cell and gene therapies, and consumer health products.
- This report aims to examine the factors that could influence Catalent’s valuation and provide an unbiased assessment of the company’s worth.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
T-Mobile Inc.: Major Drivers
- T-Mobile has recently been in the news for suffering from a major network outage affecting around 83,000 customers.
- T-Mobile added many new customers but the company ended Q4 on a mixed note.
- Their financial results also enabled them to launch share repurchases earlier than anticipated and speed up network rollouts.
Alphabet Inc.: The ChatGPT Effect & Impact On Ad Revenues
- Alphabet is going through a tough period.
- The company’s stock is losing value given the expected impact of the popularity of ChatGPT on its Search revenues.
- We downgrade the stock of Alphabet and give it a ‘Hold’ rating with a revised target price.
First UK Mission’s Root Cause Was a Dislodged Fuel Filter; Space Is Hard
- Virgin Orbit’s first international launch, after four 100% successful commercial ones, failed to deliver its payload because an in-line fuel filter was dislodged, which caused a fuel pump to run in a degraded mode.
- Thus, the engine was starved for fuel and the rocket did not deliver its payload.
- On the January 9 attempt, Cosmic Girl released the rocket, which began accelerating to 11,000 mph.
Amazon.com Inc.: Monetizing From Shopify & Other Merchants & Other Drivers
- Amazon delivered a mixed result as its worldwide net sales grew by 12% year over year which was above the expectation of Wall Street.
- The company worked hard to secure millions of deals and offer low prices for customers this quarter, including its foremost Prime Early Access Sale and the Thanksgiving.
- In the quarter, Amazon customers spent more on everyday essentials and shifted to lower-priced and value brands in electronics.
AMETEK Inc: Major Drivers
- Ametek continued to deliver excellent results with strong growth in the fourth quarter as well.
- The company delivered an all-around beat in this quarter and has seen a positive impact in the organic growth initiatives.
- On the other hand, the organic sales growth was 9%.
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