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Markets were extremely well-mannered in Thursday trading. We entered the regular session this morning mixed, with Nasdaq measurably ahead of the pace of other indexes, and finished with roughly the same relative margins, but everything in the green: the Dow gained 0.17% on the day, the S&P 500 climbed another 0.42% — yet another all-time high for the index — and the Nasdaq finished ahead of the pack, +1.03%. The small-cap Russell 2000 closed +0.80%, reversing recent losses.
The Nasdaq is now at its highest point in the last seven weeks, as the Q1 rotation into cyclicals and out of high-growth tech continues its measured reversal. Apple (AAPL - Free Report) rose 1.8% on the day, with Microsoft 1.3%. Tech led the way for the trading day, while Energy was at the tail of the laggards, -1.3%. We see this in Chevron (CVX - Free Report) and ExxonMobil (XOM - Free Report) both losing 1% on the day. We consider this a resumption of this mean reversion ahead of Q1 earnings season, when it begins in earnest.
Already for Levi Strauss & Co. (LEVI - Free Report) , Q1 results are out after today’s closing bell. Typically, the results are strong — LEVI has not missed an earnings consensus since going public in early 2019 — with earnings of 34 cents per share beating estimates by a solid dime. Revenues in the quarter came in at $1.31 billion, ahead of the $1.25 billion expected. Both earnings and revenue guidance for Q2 was boosted in the company’s earnings release, as well.
Adjusted Gross Margin at Levi’s reached 57.7%, very strong for a retailer. Digital Sales grew 41% in the quarter, while Inventories dropped 2%. The company’s Q2 dividend was also raised from 4 cents to 6 cents. Shares jumped 7% on the news initially, but have cooled a bit since. LEVI shares have already gained 27% year to date and +81.6% from a year ago. We should also get used to companies beating year-over-year comps by leaps and bounds, as the early pandemic begins to show up in year-ago figures.
Finally, Netflix (NFLX - Free Report) has reportedly reached a deal with Sony whereby it gets the rights to stream movies from Sony Pictures, including the Spiderman and Jumanji franchises, starting next year. Netflix will also gain access to Sony’s vault of previously released films. The value of the deal is rumored to be around $1 billion, but this was not directly stated in early news reports. Netflix was up 1.4% in regular trading Thursday.
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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Tech Gets Some Market Love, LEVI Makes Solid Beat
Markets were extremely well-mannered in Thursday trading. We entered the regular session this morning mixed, with Nasdaq measurably ahead of the pace of other indexes, and finished with roughly the same relative margins, but everything in the green: the Dow gained 0.17% on the day, the S&P 500 climbed another 0.42% — yet another all-time high for the index — and the Nasdaq finished ahead of the pack, +1.03%. The small-cap Russell 2000 closed +0.80%, reversing recent losses.
The Nasdaq is now at its highest point in the last seven weeks, as the Q1 rotation into cyclicals and out of high-growth tech continues its measured reversal. Apple (AAPL - Free Report) rose 1.8% on the day, with Microsoft 1.3%. Tech led the way for the trading day, while Energy was at the tail of the laggards, -1.3%. We see this in Chevron (CVX - Free Report) and ExxonMobil (XOM - Free Report) both losing 1% on the day. We consider this a resumption of this mean reversion ahead of Q1 earnings season, when it begins in earnest.
Already for Levi Strauss & Co. (LEVI - Free Report) , Q1 results are out after today’s closing bell. Typically, the results are strong — LEVI has not missed an earnings consensus since going public in early 2019 — with earnings of 34 cents per share beating estimates by a solid dime. Revenues in the quarter came in at $1.31 billion, ahead of the $1.25 billion expected. Both earnings and revenue guidance for Q2 was boosted in the company’s earnings release, as well.
Adjusted Gross Margin at Levi’s reached 57.7%, very strong for a retailer. Digital Sales grew 41% in the quarter, while Inventories dropped 2%. The company’s Q2 dividend was also raised from 4 cents to 6 cents. Shares jumped 7% on the news initially, but have cooled a bit since. LEVI shares have already gained 27% year to date and +81.6% from a year ago. We should also get used to companies beating year-over-year comps by leaps and bounds, as the early pandemic begins to show up in year-ago figures.
Finally, Netflix (NFLX - Free Report) has reportedly reached a deal with Sony whereby it gets the rights to stream movies from Sony Pictures, including the Spiderman and Jumanji franchises, starting next year. Netflix will also gain access to Sony’s vault of previously released films. The value of the deal is rumored to be around $1 billion, but this was not directly stated in early news reports. Netflix was up 1.4% in regular trading Thursday.
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Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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