U.S. blue-chip stocks are surged higher on Wednesday thanks to a newly dovish Federal Reserve, which surprised the bulls by not only removing any reference in their policy statement to further rate hikes but admitted it was ready to adjust its balance sheet normalization.
This is huge, since “quantitative tightening” — the process of reducing its holdings of bond purchased during multiple rounds of quantitative easing — has been a big worry for Wall Street. Late last year, Fed chairman Jerome Powell said this was on “auto pilot” despite stock price volatility and evidence of economic slowing.
Now, the Fed is admitting that this too is subject to the flow of incoming data. Which is giving buyers the green light to go crazy despite the ongoing flow of Q4 earnings results. Here are seven blue-chip stocks that are leading the way higher:
Apple (AAPL)
Apple (NASDAQ:AAPL) shares are zoomed nearly 7% higher on Wednesday, crossing back up and over its 50-day moving average, after reporting Q4 results that were in-line with lowered guidance. Sure, the iPhone is struggling amid pressure from Chinese competitors and a lukewarm reception to this year’s update to the iPhone X.
But strong demand for the new iPad Pro and the promise of an all-new iPhone later this year shows that the company, when it innovates, can still push unit volume. Also of note was the 19% growth in its services business and a healthy 63% gross margin.
Boeing (BA)
Boeing (NYSE:BA) shares are challenging the early October high thanks to a seemingly insatiable demand for new airliners around the world. The rise, in response to earnings, threatens to push the stock up and out of the sideways consolidation range that has been in play since the beginning of 2018. That, in turn, capped a massive 300% rise off of the lows seen in late 2016.
The company reported earnings of $5.48 per share, 93 cents ahead of estimates, on a 14.4% rise in revenues. Core earnings grew 8% year-over-year when the Street was looking for an outright decline. Looking ahead, the company is forecasting deliveries of 895 to 905 aircraft this year, up from 806 in 2018 and 763 in 2017.
IBM (IBM)
IBM (NYSE:IBM) shares are threatening to jump up and over their 200-day moving average after a post-earnings gap move higher earlier in the month. The move puts an end to the slide off of last autumn’s high that resulted in a 33% loss in value as investors have been encouraged by the first growth in full-year revenues and earnings in six years.
The company will next report results on April 23 after the close. Analysts are looking for earnings of $2.22 per share on revenues of $18.8 billion. When the company last reported on Jan. 22, earnings of $4.87 beat estimates by 5 cents per share despite a 3.5% decline in revenues.
Johnson & Johnson (JNJ)
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Shares of Johnson & Johnson (NYSE:JNJ) are coming back to life, rising back over their 200-day moving average to end a two-month consolidation range as worries related to a baby powder lawsuit give way to optimism about future growth. Recent earnings were good as well when reported on Jan. 22, with earnings of $1.97 beating estimates by two cents on a 1% rise in revenues.
The company will next report on April 23 before the bell. Analysts are looking for earnings of $2.09 per share on revenues of $19.6 billion. Barclays analysts expect shares to rise to the $135 level, which would challenge the 50-day moving average.
Advanced Micro Devices (AMD)
Despite some post-earnings headwinds from competitors Nvidia (NASDAQ:NVDA) and Intel (NASDAQ:INTC), and harnessing that abroad buying interest in semiconductor stocks in recent weeks, Advanced Micro Devices (NASDAQ:AMD) is enjoying a surge in shares up and out of their three-month trading range to jump over its upper Bollinger Band for the first time since last summer.
The catalyst was the reporting of in-line earnings of 8 cents per share on a 5.9% jump in revenues from last year. While forward guidance was weak, analysts at Cowen note that a second-half bounce back is expected on market share gains for its Ryzen processor in the 7mm factor.
Micron Technology (MU)
Continuing the theme of strength in semiconductors, memory maker Micron (NASDAQ:MU) is enjoying a nascent breakout from a long downtrend going back to last summer with a push above its 50-day moving average. Watch for a rise to the 200-day average, which would be worth a gain of roughly 20% from here as traders price in a likely reaccelerating of global economic growth — and thus, demand for computer components.
The company will next report results on March 21 after the close. Analysts are looking for earnings of $1.7 per share on revenues of $6 billion. When the company last reported on Dec. 18, earnings of $2.97 matched estimates on a 16.3% rise in revenues.
Snap (SNAP)
And finally, for the deep value hunters, take a look a beleaguered social media stock Snap (NYSE:SNAP). Shares have been crawling near recent lows since October and are only now trying to extend above their 50-day moving average with a possible move above overhead resistance near $7. Investors have been watching and waiting amid management turnover and strategic missteps, but with competitor Facebook (NASDAQ:FB) making errors of its own, there is an opportunity to grab market share.
The company will next report results on Feb. 5 after the close. Analysts are looking for a loss of 8 cents per share on revenues of $376.6 million.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.
