Stock Market Update 6-1-2019 Weekend Vibes

Hey have you heard? Turns out the heat in the trade war oven is being turned up. Trump’s threat to open a trade war with Mexico has sent Wall Street slipping and sliding, with auto stocks among the hardest hit being sent straight to the scrap yard.

Ford (F)was gapping down into oversold territory Friday, below 9.50 in mid day trading. The stock, like many in the SP500 right now, is on course to test its 200 DMA around 9.12.

General Motors (GM) gapped down as well, below angular support. GM has been trading under its 200 DMA for awhile and looks on target to test its lower angular support inside a massive symmetrical triangle.

GM chart

Not looking so hot…

Europe were already nervous that the US would hit Mexico next with the trade war hammer.

DJT announced in his usual favorite fashion…a tweet!  We now know that tariffs on all goods coming from Mexico would be introduced and increased until the country curbs illegal immigration into the US.

Stock News Tweet

The tweet was followed up with a White House statement giving more details. The plan thus far is to start the tariff on Mexico June 10th with a 5% tariff and would steadily rise to 25%.

Jesús Seade, Mexico’s top diplomat for North America, said the proposed tariffs would be “disastrous”, wall street has been speculating that the measure may be the fuse on the bomb that goes off and triggers the global economy into the R word (recession)…

From A to Z Amazon picks up the phone

Reports that Amazon (AMZN) is giving thoughts to entering the cell service world through a deal that one analyst says would help pave the way for regulatory approval for the merger of T-Mobile (TMUS) and Sprint (S). AT&T (T) and Verizon (VZ) investors did not take the news well. as both stocks opened with a gap down and were down around 3% in midday Friday. This was one of the trade setups we gave in the swing trade room on Friday morning. After Verizon bounced off lows, retested a technical daily trend line, it faded another 1% before closing at lows.

BIG LOTS BEATS.

Big lots (BIG) surprised by 33% Friday. The stock opened up, but quickly dropped with the overall market. It ended the day up over 6% and closed on its 9EMA daily which is typically a good sign of momentum going back. The raised guidance was a welcome sign for investors to buy the dip today. Keep your eye and see if this one can trend despite the market chop.

MARKETS

  • Gold Gets Going: Gold futures were on fire Friday. Apparently the sell off in the market has traders looking for a hedge. Not to mention, Fed rate cut talks have people wondering about inflation. The consolidation breakout and roll over in the USD had traders flowing into options bets in ETFs like GDX at three times the normal volume.
  • Marijuana Stocks: What a buzz kill..man. Cannabis Stocks get bummed out as FDA casts a Debbie downer style outlook on CBD-Infused Foods. Pot stocks fell sharply on Friday after the Federal Drug Administration said it was not sure how safe cannabinoids found in marijuana is for ​people to eat…Independent experts disagree.
  • Tilray (TLRY) fell 3% Friday, while Aurora Cannabis (ACB), Cronos Group (CRON) and Canopy Growth Corp (CGC) fell 4%.The FDA has started its first public hearing on cannabidiol Friday. Cannabidiol  is one of the most common (and useful) chemical compounds found in weed. Naturally, The Cannabis lobby was there and did its best at trying to convince the FDA to permit the sale of cannabis-derived dietary supplements and foods products. Of course, there will be other powerful lobbyists (We’re looking at you pharmaceutical industry) talking in the other ear of the FDA against it. 
Buzz Kill Man

Come on FDA..you’re really killing the vibe man

On The Lookout Monday

ISM Manufacturing PMI at 10:00

Monday we get ISM data, last month, we missed. This reports important because it looks at a lot of data of over 400 companies and their numbers.

Earnings

Earnings today look quiet. But we’ll highlight a relatively small company, Box Inc (BOX) Thee company is known for providing a cloud-based, mobile friendly solutions to organizations of all sizes. The stock had awesome earnings last quarter, surprising by 150%. But lowered guidance, and hence, the box has been a little banged up in transit on the NYSE. It’s been trading at the lower end of its range since last quarter, prime for a bounce of support. Be on the lookout for an earnings beat, and raised guidance to get the bulls excited again. The company reports after the bell Monday. 

ECONOMY

 Rate cuts, already? Looks like the Fed might have to walk back interest rates again…That’s what a growing number of economists and investors said last Friday, at least. It looks to be that escalating tariffs, hitting the air waves without warning has upped the risk level to the worlds economy and increased the likelihood the Fed will have to dip the interest rates already. It seems like they just started raising them because the economy was strong, but now a cut? How will investors handle this signal if they decide to go this route? Some food for thought.

Hot Topic: 

OK, who remembers The Dark Crystal? Well, Netflix (NFLX) has revived the classic 80s film with a new Series that is a prequel to the movie. The Dark Crystal: ‘The Resistance’ airs in late August. 

If you were that kinda kid that was into star wars, comic books, or Lord of the Rings growing up, chances are you remember the Dark Crystal movie. It’s one of the late, great, Jim Henson’s masterpieces. The movie was a stunning visual masterpiece, had incredibly well done puppetry that Jim was known for. But what made it special was that it was an extremely dark film when compared to Jim’s other work.

The official Netflix trailer for the movie is pretty epic, and has over 4.3 million views in only a few days. Netflix has been killing it with content. In 2018 they spent 13 billion and in 2019 they are on pace to spend about 15 billion. Will it pay off for the streaming kingpin? Netflix has been banking on it.

NETFLIX – BY THE NUMBERS

Here are the upbeat numbers from last quarter’s earnings:Earnings per share: 76 cents, vs. 57 cents expected.Revenue: $4.52 billion, vs. $4.50 billion expected.Domestic paid subscriber additions: 1.74 million, vs. 1.61 million.International paid subscriber additions: 7.86 million, vs. 7.31 million.Netflix revenue rose 22.2% year over year, reporting $4.52 billion compared with $3.70 billion a year earlier. Earnings per share climbed from 64 cents in Q1 2018 to 76 in the same quarter this year, marking an 18.8% increase. The numbers don’t lie. Netflix continues to draw more subscribers into its platform to…Netflix and chill. The only thing hampering Netflix for Q2 is that it provided light guidance for the second quarter, coming up July 16th. The company estimated Q2 earnings per share of 55 cents compared with the 99 cents analysts were expecting. The stocks been trading below its 50 Daily Moving Average, but above its 200 Day Moving Average. Chances are investors and speculators are waiting for net earnings, or a technical level before going long, or taking profit. 

Enjoy the rest of your weekend friends. We’ll see you Monday bright and early. 

P.S. – Private Swing Trade Alerts are coming. Real time. Actionable. Get pumped! Oh and go check out our magic mushrooms stocks post. It’s pretty far out.

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