Stock Market Today: Apple’s Next Billion-Dollar Deal; Buy Snap Stock?
It was setting up for another lazy trading session on Tuesday. But then reports began circulating that U.S. trade officials would head to Shanghai this weekend in an effort to make progress on a trade deal. That was the big event in the stock market today, despite a flurry of earnings reports. It sent the S&P 500 and Dow Jones up 65 basis points, while the Nasdaq rallied 0.58%.
That being said, the trade situation remains both a risk and an opportunity depending on how talks progress. If China and the U.S. move closer to a deal, equities will respond favorably. If tensions flare again, the markets will feel the pain — remember the price action in May?
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The trade war is just one of many considerations at the moment. Next week we have the Fed and investors are still trying to decide if it will cut rates 25 basis points or 50 basis points. Currently, the market is pricing in a 78% chance of a 25 basis point cut. Throw in all of the earnings reports and it’s a lot for investors to digest.
Top News in the Stock Market Today
The rumors about Qualcomm’s (NASDAQ:QCOM) future continue to fly. This time it’s not the FTC or DoJ at the root, but Apple (NASDAQ:AAPL). You may remember that Apple and Qualcomm settled their legal disputes, netting a huge win for Qualcomm that shocked the market. That’s why its stock erupted more than 50% in less than a month earlier this year.
However, QCOM stock is struggling Tuesday, down about 2.4%, on reports Apple is in talks to buy Intel’s (NASDAQ:INTC) smartphone modem-chip business for $1+ billion. Apple doesn’t toss around $1 billion lightly, but if it does for Intel’s business, it could have lasting implications on Qualcomm down the road despite its multi-year supply deal with Apple.
Staying in tech, a number of chip stocks caught a boost as the White House appears to be making good on lifting some of its restrictions on Chinese smartphone maker Huawei. The company orders billions of dollars worth of chips and supplies from U.S. companies and a potential resolution has many of these stocks rallying.
Executives from the following companies met with President Trump to discuss Huawei, along with trade and national security: Micron (NASDAQ:MU), Broadcom (NASDAQ:AVGO), Qualcomm, Western Digital (NASDAQ:WDC), Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) and Cisco Systems (NASDAQ:CSCO).
Ford (NYSE:F) was in the spotlight Tuesday, mostly over its F-150. The automaker is being sued for allegedly falsifying fuel economy tests for the truck. However, if its latest design works out, emissions may not be an issue. Kidding aside, management posted a video of the all-electric truck prototype towing 1.25 million pounds worth of rail cars, showing just how serious Ford is about the vehicle.
Remember, the F-Series has been the best-selling vehicle in the U.S. for 36 years.
Big Movers
Snap (NYSE:SNAP) stock will break the ice for social media stocks when it reports earnings after the close on Tuesday. Shares rallied almost 5% into the print, following a pair of analyst upgrades. Stifel and Rosenblatt analysts both upgraded Snap stock to buy, assigning price targets of $17 and $18, respectively. Shares are up 168% so far on the year.
United Technologies (NYSE:UTX) and Lockheed Martin (NYSE:LMT) both beat on earnings per share and revenue estimates. Both companies also raised their full-year outlook. That says something about aerospace and defense, doesn’t it? Despite the strong quarterly results, both stocks were barely changed on the day.
Here’s the trade setups for LMT and UTX, and it also includes Coca-Cola (NYSE:KO), which hit new all-time highs on Tuesday after it delivered a top- and bottom-line beat.
After the close, investors will also hear from Chipotle Mexican Grill (NYSE:CMG) and Visa (NYSE:V). Before the open, we’ll get reports from Boeing (NYSE:BA), AT&T (NYSE:T), Caterpillar (NYSE:CAT) and United Parcel Service (NYSE:UPS).
Last but not least, we’ve got some analyst initiations for The RealReal (NASDAQ:REAL), which went public almost a month ago. Stifel and UBS analysts both initiated REAL with buy ratings and a $30 price target, while KeyBanc analysts also went with a buy rating, but assigned a $31 price target. From current levels, the latter represents about 22% upside.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell was long AAPL, T, V, AVGO and GOOGL.
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