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Disappointing jobs numbers:
The pace of job creation in the US slowed more than expected in May, and less participation in the labor market helped to push the unemployment rate to a 16-year low. The economy added 138,000 nonfarm payrolls while the unemployment rate fell to 4.3%, the Bureau of Labor Statistics said in its monthly report on Friday. Economists had forecast 182,000 nonfarm payrolls and a 4.4% unemployment rate, according to a Bloomberg survey. A broader measure of unemployment that includes people who are working part-time but would prefer full-time jobs — the U6 or underemployment rate — fell to 8.4%, the lowest level since November 2007. The share of people who are either working or job hunting relative to everyone in their prime working age — the labor-force participation rate — declined to 62.7% from 62.9%. Wage growth was little changed, and economists had expected this because of a calendar quirk: the survey week for the jobs report usually includes the 12th of the month. But in May, it was different from the week of May 15, when many workers get paid and would receive any raises.
US jobs report shows slower hiring, lower unemployment rate in May - Business Insider
The surging dollar? Perhaps not..
President Donald Trump has been compared to President Ronald Reagan in many ways. In a note on Wednesday, HSBC strategists did this through the lens of the US dollar. The greenback surged to a 14-year high in late 2016 as Wall Street hoped for pro-growth policies from the incoming president and the Federal Reserve raised interest rates. "The trajectory of the USD envisaged by our FX team is quite similar, but more compressed, to the way in which the USD behaved in the 1980s under President Reagan," wrote John Lomax, HSBC's head of global emerging-market equity strategy. "Reasons for the compression in the timetable include a much higher starting level of the debt stock; less cyclical strength, lower inflation and a more dovish central bank; and less political cohesion between the presidency and the House."
HSBC says dollar under Trump will surge then plunge, resembling 1980s - Business Insider
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We're buying 500 SHOP at $84.99
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We're buying 500 FNSR @ $24.53
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Finisar Corp. (NASDAQ: FNSR) was reiterated as Buy with a $34 price target (versus a $25.04 close) at Jefferies. The firm noted that datacom optics demand is on fire due to hyperscale demand and likely will continue to be for the foreseeable future
Top Analyst Upgrades and Downgrades: Adobe, Alibaba, Apple, Pandora, Vodafone, Cigna, Lexicon Pharma and Many More - 24/7 Wall St.
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Some good news:
More importantly, as we previewed, management reiterated multiple positive drivers for 2QFY18 (Oct.) and beyond. First, QSFP28 (100G Datacom) continues to be sold out and pricing is holding up better than expected. Second, the company believes it should have ~$20mn in 3D sensing revenues in 2QFY18, with good GMs, which is higher than we are modeling. Third, the company is likely to be qualified for WSS/ROADM and CFP2-ACO to Verizon (VZ, Not Rated) through Cisco (CSCO, Neutral, $31.58, $34 FV) by 2QFY18. Finally, Finisar is fully qualified again for CFP and CFP2 at Huawei. The Chinese inventory work down and demand recovery remains murky (unclear if China will be up q/q in 2QFY18), but we believe China will recover in late CY17 or early CY18.
Finisar Surges 9%: Street Cheers Implication Apple’s Given Them 3-D Sensing Orders - Barron's
And our own article:
Finisar, the biggest optical networking company, trades at a huge discount compared to number two Lumentum. We don't see reasons for that in terms of margins, growth, profitability or balance sheet. And now the last reason for the value gap, Lumentum's upcoming boom in VSCELs is also matched by Finisar. We think the value gap will close significantly starting today and Finisar will be able to rejoice.
Finisar's Big Value Gap To Lumentum Is Going To Close - Finisar Corporation (NASDAQ:FNSR) | Seeking Alpha
In fact, the VSCEL order is rumored coming from Apple, exactly the same what drove Lumentum higher..
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We're buying 6900 DSNY at 0.199
Here is why
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We're buying another 5000 DSNY at $0.20
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Following on from our April 28th and May 24th Apple Churn, we have seen some recent resolution in this space. It is our belief that Lumentum (LITE) has received orders for both low- powered and high-powered solutions. Finisar (FNSR) appears to have secured orders for high-powered solutions as well, although we believe LITE will be the dominant supplier. Viavi (VIAV) looks to have a stranglehold on the filter side of the design with a sole-sourced position. POSITIVE: LITE, FNSR, VIAV; NEGATIVE: IIVI as we see little evidence of any 2017 orders at this time, HIMX on the VCSEL front.
Lumentum, Finisar, Broadcom in ‘iPhone X’ Winners Circle, Says BlueFin - Barron's
As we argued Lumentum is 2.5x as expensive as Finisar, while the latter has a better balance sheet and slightly better margins. This difference is impossible to explain with the Apple VSCEL orders.
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We're buying another 5000 DSNY at $0.20
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We're buying 5000 DSNY at $0.20
We're buying 500 AAOI at $61.28
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