US Stocks Overview and Marathon Petroleum

Both the Non-Farm Payrolls and Wages for November showed an upside surprise last Friday. The seasonally adjusted NFP data recorded +263K versus market expectations of +200K, while the October value revised up to +284K (was +261K). On the other hand, the average hourly earnings recorded 0.6% (m/m) (the fastest growth rate since January this year), its previous value revised up to 0.5% (was 0.4%); compared to the same period last year, the data recorded 5.1%, higher than previous value (4.6%) and consensus estimate (4.7%). Unemployment rate remains unchanged at 3.7%.

Fig.1: US NFP, Unemployment Rate and Average Hourly Earnings. Source:Trading Economics

Tightening of the labor market coupled with rising wages (which could trigger higher inflation) shall pressure the Fed that the central bank may require to raise its forecast for terminal rate. It is still early to call victory over inflation, and even if it is not in recession, the US economy is likely to be in a tepid state in 2023. At market close, the US main indices ticked slightly lower: USA500 at 4064, USA100 at 11960, USA30 at 34341.

Overview – Sector Performance (Source: Tradingview):

Energy Minerals sector is the biggest winner throughout 2022, with YTD gains at +52.34%.
Industrial Services comes second, with YTD gains at +22.42%.
Other sectors with positive YTD gains include Distribution Services, Health Services, Health Technology, Non-Energy Minerals and Utilities.
The biggest loser is Consumer Durables (YTD -36.69%), followed by Technology Services (YTD -27.96%), Retail Trade (YTD -17.61%), Electronic Technology (YTD -16.72%), etc.

Marathon Petroleum

Founded in 1887, the US oil company Marathon Petroleum engages in refining, marketing, and transportation of petroleum products. It is one of the fastest growing energy stocks and one of market participants’ favourite alternatives to energy stocks besides Occidental Petroleum (the Oracle of Omaha – Warren Buffett’s baby).

Fig.2: Reported Sales of Marathon Petroleum versus Analyst Forecast. Source: CNN Business

Marathon Petroleum delivers satisfactory results throughout 2022. Its sales for the past three quarters of the year performed on par with consensus estimates, at $38.4B, $54.2B and $47.2B. Its Q4 earnings are scheduled to be released on 1st February next year. Analyst forecasts the sales of the company to reach $35B, whereas the overall sales for the year shall hit $163.7B, up over 35% from a year ago.

Fig.3: Reported EPS of Marathon Petroleum versus Analyst Forecast.

Source: CNN Business

In terms of EPS, the company had a huge leap in Q2, at $10.61 (Q1 at $1.49). The latest quarter recorded $7.81. All the three quarters performed above consensus estimates. In the coming quarter, analyst forecasts its EPS to hit $6.04, while the EPS for the whole year is expected to hit $25.65, over 10 times higher than those reported in 2021.

Technical Analysis:

#MarathonPetrol (MPC.s) share price has been riding on a strong bullish trend since gaining support in March 2020. Recently, it ended a 6-week gains streak, retesting support at $117 (FE 61.8%). A close below this support may indicate the bears to continue exerting pressure towards the next support at $101 (FR 23.6%), followed by $85 (FR 38.2%). Otherwise, as long as the support $117 remains intact, the nearest resistance to focus on is the all-time high $128, followed by $142.


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Larince Zhang

Market Analyst

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