Mar.11 -- Dan Ives, Wedbush Securities analyst, discusses his view on tech stocks and the volatility due to coronavirus fears. He speaks with Bloomberg's Emily Chang.
For the first time in over a year, the S&P 500 is seeing its 50-day moving average cross below its 200-day moving average (see Yahoo Finance chart below) points out SunDial Capital Research. This is known on Wall Street as the “death cross,” and is commonly believed to be a bearish short-term indicator for markets. Indeed, SunDial Capital Research has the historical data handy to back up the concerns.
Corporate profit is all but certain to drop in the first quarter as the coronavirus shuts America down. But analysts still think profit will double or more at some S&P 500 companies. Double profit?
Global stocks are edging lower, and oil prices have plunged to 17-year lows at the start of another week set to be dominated by the coronavirus pandemic. The investor optimism came despite President Trump extending the U.S. lockdown to April 30 and public health officials warning that the American death toll could be between 100,000 and 200,000, with cases in the millions. In our call of the day, UBS strategists said “selling fatigue” may have kicked in as investors were no longer reacting as wildly to incremental bad news as they have been in recent weeks.
RH (RH) shares plunged 12% in after-hours trading Monday after the parent company of Restoration Hardware reported fiscal fourth-quarter revenue and net income that fell far short of Wall Street estimates. RH reported net income of $68.4 million in the quarter, or $2.66 a share. Revenue dipped to $664.9 million from $670.9 million a year ago.
JPMorgan's Global Quantitative and Derivatives Strategy team, led by Marko Kolanovic, has been crunching the numbers on the coronavirus pandemic, and found that the forecasts can vary wildly, with predicted economic declines ranging from 20% to 70%, depending on which data the analyst chooses to start with. The JPMorgan report does offer a ray of hope: because the hospital numbers are a lagging indicator, it is possible that the social containment measures have taken hold and brought us closer to the inflection point – and that infection rates will soon start declining. Kolanovic writes, “Taking into account the unprecedented monetary and fiscal measures being implemented, as well as unprecedented asset declines over the past month, we maintain that asset price recovery is likely and our pre-pandemic equity price target for 2020 is achievable sometime in the first half of 2021.”
Key market indexes held most of their gains heading into the last hour of trading Monday, with the Dow Jones Industrial Average up more than 600 points. The Nasdaq rallied 3.3%, the S&P 500 rose 3.2% and the Dow Jones industrials gained 2.9% in the stock market today. Volume was mixed, lower on the NYSE but higher on the Nasdaq, vs. the same time Friday.
Boeing earnings have evaporated as 737 Max deliveries and production are on hold and the coronavirus's spread hits air travel demand. Is Boeing stock a good buy now? Investors should look at the aerospace giant's fundamentals and the BA stock chart.
China's lifting of restrictions related to the coronavirus has been successful, according to research by Imperial College in London. "As movement increased and China restarted their economy, we didn't see an increase in transmission," says Dr. Kylie Ainslie, research associate in influenza dynamics in the Department of Infectious Disease Epidemiology at Imperial. She speaks on "Bloomberg Markets: European Open."
So, while the medical company's sales and earnings have grown consistently for several years, Abbott isn't lining up with CAN SLIM rules for investing. Investors are advised to seek companies with recent quarterly earnings and sales growth of 20%-25%. The bigger, the better.
Tesla's stock rally continued today as analysts debate the company's long-term prospects. Several analysts have cut their price targets for the company as deliveries are expected to be lower than expected before the coronavirus pandemic hit. However, some have upgraded their position on Tesla Inc.
A crushing global shortage of ventilators needed to treat coronavirus patients has sent a German smallcap stock soaring, leaving analysts scrambling to value both the shares and the company's ability to help combat the crisis. While major German indexes have lost between 17% and 30% in 2020, shares of Draegerwerk AG & Co KGaA have gained about 80%, taking off in mid-March after Germany ordered 10,000 ventilators and other medical equipment from the company. M.M. Warburg analyst Eggert Kuls estimates that each ventilator costs about 20,000 euros, making the deal worth 200 million euros ($221 million) in revenue for Draeger.
(BRKA)'s $10 billion preferred stock investment in (OXY) is looking more troubled. Two Wall Street analysts say that an embattled Occidental (ticker: OXY) may choose to pay the $800 million in annual dividends in stock rather than in cash. Paying the dividend in common stock, as permitted under the terms of the deal, would be dilutive to Occidental.
The IRS will base your payment on the most recent tax return you filed. If you haven't filed your 2019 return yet — and you now have until July 15 to do that — the tax agency will pull up your 2018 filing. If you earned too much during 2018 to receive a payment but would qualify based on last year's income, because it was lower, you'll want to file your 2019 return quickly.
The stimulus bill signed into law Friday keeps any companies that borrow from the government from paying dividends to shareholders for at least a year after the loan is repaid — even as bond yields have collapsed to to near all-time lows. The provisions of the CARE Act likely exacerbate a trend of companies trying to keep as much cash on hand as possible as the economic downturn worsens. The Goldman strategists estimate dividends for S&P 500 stocks will decline 25% to $44 per share in 2020, and note 12 companies, ranging from Apache Corp. (APA) to Old Dominion Freight Line (ODFL), have already reduced or suspended their shareholder payouts.
Uncle Sam is offering tax payers some relief by delaying the federal tax deadline to this summer, but you still need to double check when your state taxes are due. The federal income tax filing deadline has been pushed to July 15 from April 15 to give Americans more breathing room in the wake of the coronavirus pandemic. The Alabama Department of Revenue announced that the due date for individual tax filings is the same date as the corresponding federal income tax return on July 15.
BondCliQ CEO Chris White joins Yahoo Finance's On The Move to discuss how the Federal Reserve has handled the coronavirus pandemic.
The sucker's rally on Wall Street is in full effect in large part because Wall Street's powerful high-speed trading computers are completely mentally detached from the harsh realities breaking out on Main Street during the coronavirus pandemic. So in short, consider fading last week's rip in equities. But oh what a rip higher it was, folks, as traders got their pounds of flesh from the Federal Reserve (unlimited QE program) and government (a $2 trillion-plus fiscal relief package).
Saudi Arabia said on Monday it will raise its oil exports to a record 10.6 million barrels per day starting from May despite a global supply glut, escalating a price war with Russia. Oil prices are languishing at 17-year lows as the coronavirus pandemic threatens a painful global recession that could further sap demand. Saudi Arabia, the world's top oil exporter which already announced a sharp production increase for April, said it would add additional supplies to the global market, deepening a glut.
The promise that electric vehicles (EVs) hold in the automobile market hinges on two major factors – that they will decrease tailpipe emissions and they will be more economical to operate than internal combustion engine (ICE) vehicles. With analysts lowering their outlook for global oil demand in the second quarter of 2020 due to the COVID-19 epidemic, it is certain that the operating cost of ICE vehicles will be comparable to that of EVs. The memo looks to have reached major U.S. auto companies, with detailed production plans for North America showing Ford Motor Company (NYSE: F) and General Motors Company (NYSE: GM) forecasting to produce more than five million SUVs and pickup trucks in 2026, while only planning to make 320,000 EVs the same year.
Meanwhile, Ford announced March 24 that it is collaborating with 3M (MMM) and GE Healthcare (GE) to produce critically needed respirators and ventilators. Ford and GE Healthcare are working together to expand production of a simplified version of GE Healthcare's existing ventilator design to support patients with respiratory failure or difficulty breathing caused by COVID-19. These ventilators could be produced at a Ford manufacturing site in addition to a GE location,” the two companies said in a press release.
“The hardest thing right now is that nobody actually knows how bad it's going to get,” said Willy Walker, chief executive officer at commercial real estate lender Walker & Dunlop Inc. “That's driving everybody crazy.” After a long economic boom in which tight housing inventory gave apartment landlords unprecedented power to raise rents, the shoe is on the other foot as the calendar turns toward April. Apartment owners collect more than $22 billion in rent in a typical month, roughly a quarter of the total landlords take in across major types of commercial property, according to CoStar Group Inc. In an extreme scenario, more than 25% of the households that rent in the U.S. may need help making payments because of the coronavirus, requiring up to $12 billion a month in government support, according to research from Amherst Holdings.
Consider: If you're like most regular U.S. investors, you have most or even all of your stock market investments tied to just one index: The S&P 500 (SPY) which tracks the 500 biggest companies in America. It's the biggest index in the world, and the one that most mutual funds follow when they offer a plain vanilla “U.S. stock market fund.” In the past month the S&P 500—even counting the latest rally—has fallen 17%.
The United States' flagship crude oil grade plunged on Monday to trade at about $10 a barrel, the weakest since late 1998 as demand plummeted due to the coronavirus pandemic and storage filled quickly. The grade, priced at the heart of the Permian basin in Midland, Texas, traded at $9.50 below benchmark prices, traders said, bringing the outright price to near $10 a barrel. West Texas Intermediate crude (WTI) at Midland, along with other actively traded U.S. crude oil grades, have sharply weakened since the coronavirus pandemic has restricted the movement of billions of people around the world and shriveled energy demand.
A quote attributed to market guru Michael Mauboussin is that “great fundamental investors focus on understanding the magnitude and sustainability of free cash flow.” It's obviously difficult to determine if we already have or will soon hit bottom in the current downturn, but it's fair to say that many companies will survive with their dividend payments intact. Using TipRanks database, we've narrowed down three stocks that have well above-average dividend yields right now.
With pressure building for a COVID-19 drug — from the right, the left, patients, their families and an uneasy public in a weeks-long lockdown — Gilead Sciences Inc. said the drug developer's emphasis is on speed but also safety and efficacy. In an open letter published this weekend, Gilead Chairman and CEO Daniel O'Day explained why the Foster City-based company (NASDAQ: GILD) last week switched from individual "compassionate use" requests for its drug, called remdesivir. The drug failed in a clinical trial against the Ebola virus, but its potential to fight off a virus is promising enough that researchers in China started to use it after the coronavirus that causes COVID-19 was discovered there in December.