In April, the US stock market extended its bull run, aided by another strong earnings season, and despite some concerns over international trade.
The NASDAQ Composite gained 3.40% in April. It was followed by the S&P 500, which ended the month 2.74% in the green, while the Dow Jones Industrial Average inched up by 1.27%. For the first four months of the year, the NASDAQ Composite surged by 21.44%, while the S&P 500 and the Dow Jones Industrial Average saw gains of 17.36% and 13.91%, respectively.
With US-China talks ending at the beginning of the month, no deal has been revealed yet. However, it is expected that a deal will be signed later this month. In the meantime, President Trump has recently threatened to raise tariffs on around $200 billion worth of Chinese goods to 25% from 10%, as a response to the slow progress of talks.
At the same time, the President diverted his attention to trade with the EU. On April 9, he said the US would impose tariffs on $11 billion worth of EU products. The warning came a day after US trade officials came up with a list of EU products to target. The tariffs are a reaction to an ongoing dispute between the US and Europe over aid to aircraft manufacturers Boeing and Airbus.
As April marks the beginning of a new quarter, investors’ attention shifted to companies’ Q1 earnings. According to FactSet data, by April 26, 46% of the companies in the S&P 500 had reported their financial results. Among these companies, 77% posted better-than-expected EPS and 59% beat their revenue expectations. However, FactSet also noted that the blended earnings decline for the S&P 500 amounted to 2.3%, if this trend persists, it will mark the first annual decline in EPS since the second quarter of 2016.
TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors, looked at the 20 most searched tickers among Financial Advisors in April.
Petróleo Brasileiro S.A. – Petrobras (NYSE: PBR) saw heightened interest from advisors. The oil giant made some major announcements in the last week of April. On April 26, the company said it had completed three agreements to sell assets worth $10.30 billion. Three days later, Petrobras announced plans to raise around $20 billion by selling eight refineries in Brazil, although the process can take up to a year. The asset-selling program is part of Petrobras’ strategy to focus on its core oil and gas exploration businesses.
Another oil company that made the list of the most-searched tickers is Seadrill Ltd (NYSE: SDRL), which captured the attention of Financial Advisors amid a major deal brewing in the oil industry. In April, Chevron Corporation (NYSE: CVX) reached an agreement to buy oil driller Anadarko Petroleum Corporation (NYSE: APC), although the board of the latter also engaged in talks with Occidental Petroleum Corporation (NYSE: OXY), creating a bidding war.
The fourth most-searched ticker among financial advisors was semiconductor manufacturer Applied Materials, Inc. (NASDAQ: AMAT). The semiconductor industry has been in the spotlight in the last couple of months caused by warnings and concerns over lower spending, a cyclical downturn, and trade issues with China.
Procter & Gamble Co (NYSE: PG) was the fifth most-searched ticker in April and it’s the stock we’re going to look into more detail in this piece. The company kept attention drawn to itself throughout the entire month of April.
On April 8, analysts at Wells Fargo upgraded their rating on Procter & Gamble’s stock to ‘Outperform’ from ‘Market Perform’. The analysts explained the boost by suggesting that the company has reached a turning point, helped by the company’s CEO David Taylor, who inspired a “sense of urgency and accountability.”
The following day, the consumer goods giant declared a dividend of $0.7459 per share, which represented an increase of 4% from the previous quarter’s dividend.
On April 12, it was reported that Unilever NV ADR (NYSE: UN) will buy Fluocaril and Parogencyl dental brands from Procter & Gamble. The details of the transaction were not disclosed, but it’s expected to close sometime this quarter.
However, the development that had the most impact on Procter & Gamble’s stock last month was the company’s financial report. For the fiscal third quarter, the company posted EPS of $1.06 and revenue of $16.46 billion. Even though the revenue was $90 million higher than expected and the bottom line beat expectations by $0.02, the stock lost over 2.60% on April 23.
The consumer goods giant also reported organic sales growth of 5% in the quarter, helped by 9% growth in the beauty segment, 5% in health care, and 7% in fabric & home care. It also provided a strong outlook, anticipating all-in-sales growth of flat to 1% for the full year and organic sales growth between 2% and 4%.
One thing investors might have taken issue with was Procter & Gamble issuing an EPS growth target of between 3% and 8%, which Wells Fargo analysts suggested might be too wide, when explaining the post-earnings drop of the stock.
Nevertheless, looking ahead, analysts remain confident in Procter & Gamble’s stock, with most of them reiterating their rating on the stock.