Tech Keeps Rocking and Energy Comes to Life: Earnings This Week

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Technology keeps rocking and energy comes to life. That pretty much summarizes earnings since our last recap.

The big names in tech were probably Alibaba (BABA) and video-game makers Activision Blizzard (ATVI) and Electronic Arts (EA). All three beat estimates on their top and bottom lines. BABA and EA both advanced about 7 percent, while ATVI rose 3 percent.

Smaller Internet and software companies did even better as investors kept finding value in a sector that’s led the market by a wide margin for the last two years. Here are a few standouts:

  • Blue Apron (APRN): The beleaguered meal-delivery company added more customers than expected and lost less money than feared. It’s up 32 percent in the last week. Don’t forget related stock GrubHub (GRUB) is up more than 120 percent in the last year.
  • TripAdvisor (TRIP): The hotel-booking company defied fears of a slowdown to beat the Street on its top and bottom lines. It’s back to its highest level in almost a year, and is up 25 percent in the last week.
  • Twilio (TWLO): Ever heard of this provider of cloud-based messaging for software developers? It’s more than doubled so far this year, factoring in its second straight set of blowout results on Tuesday night.
  • Shopify (SHOP): The hyper-growth provider of business e-commerce services reported yet another strong quarter, defying worries that a crackdown on user data by Facebook (FB) would crimp its style. SHOP is up 16 percent in the last week and has appreciated more than 50 percent year-over-year.

Then you have energy, which was already on a tear because of soaring oil prices. Occidental Petroleum (OXY) beat on its top and bottom lines after crude output and pipeline profits surprised to the upside. Cheniere Energy (LNG), the biggest player the fast-growing field of transoceanic natural gas, crushed estimates and raised guidance. OXY’s up about 8 percent in the last week and LNG rose 6 percent.

But there were also some losers. The worst performer in the S&P 500 over the last week was construction and engineering firm Fluor (FLR). It crashed 23 percent after earnings missed and management cut guidance.

Health-care names including Express Scripts (ESRX), CVS (CVS) and Celgene (CELG) are all at or near 52-week lows. Some beat estimates, others missed. No one really cares because the real story is concern about downward pressure on drug prices — especially as the Trump Administration prepares to address the issue.

Monster Beverage (MNST) rounds out the list. There may have been a time when the energy-drink company seemed immune to weakness in the broader consumer-staple segment. But that time has passed. Earnings fumbled on Tuesday night and analysts went for its jugular the next morning. The result? A 7 percent drop in the last week.

In conclusion, the big takeaway is that technology stocks continue to impress and energy is starting to get noticed, while healthcare seems to be losing favor. Industrials and consumer staples are also nothing to write home about… unless your mom likes bad news.

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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.