Monday 8/12/19=DJIA -400 NASDAQ -93
Sloppy Market Today.
Daily Wrap: The market was never able to gain any traction today. The surprise election results in Argentina cause their market to tank today. We now have a new hot spot in the world today. Hong Kong remains a hot spot as the rioting has stepped up to the next level over there. In the meantime, there does not seem to be too much hope for resolution to the China trade stand-off any time soon.
I sent out tweets on the following stocks today: PERI, NVRO, GME, EMTY, ATEC, APPS, AGG, and ROKU,
Here was the mood of the market this a.m. as we started a new trading week.
- The Shanghai Composite climbed 1.5% overnight, advancing by the most in over a month, following a wild trading week in which U.S.-China trade tensions shook asset prices across the board.
- The PBOC today set the yuan at a stronger rate than expected - 7.0211 to the dollar - easing concerns of a quick devaluation after the U.S. last week dubbed China a currency manipulator.
- The positive turn didn't extend to Europe or American markets, where stock index futures fell 0.5% after President Trump suggested that trade negotiations could break off.
The latest GDP forecast.
- The Atlanta Fed trims its GDPNow model for Q3 to 1.9% from 2.2%, noting weaker data in personal consumption expenditures, private fixed investment, and government spending.
- Meanwhile the New York Fed staff Nowcast for Q3 falls to 1.6%, down 0.6 percentage point, due to negative surprises on ISM manufacturing and trade data.
Investors betting on a September rate cut.
- In the day since President Trump tweeted plans for imposing new tariffs on Chinese goods, traders are betting that Wednesday's rate cut won't be a "one and done."
- The CME FedWatch tool, which uses federal funds rate futures trading to calculate the probability of rate movement, now puts the probability of a September rate cut of 25 basis points at 98% vs. ~61% probability before the tweet.
- The argument strengthens that the likelihood of further rate cuts increases as the trade war ramps up. Fed Chair Jerome Powell noted in his press conference on Wednesday that trade tensions is one of the downside risks to the generally healthy U.S. economic outlook.
Hong Kong is still a global hot spot.
- Hong Kong is entering "a very difficult economic environment" as trade declines and growth slows, according to the city's financial secretary.
- "Industries like retail, catering and transportation have taken a hit because of the recent violent unrest, with significant revenue drops," Paul Chan wrote on his official blog. "The depressed feeling in society is affecting consumer industries to different degrees."
- Thousands of Hong Kong protesters rallied on Sunday, defying a police ban on marches in the Chinese-controlled territory and continuing a tense weekend of demonstrations which saw police fire teargas overnight.
We now have a new hot spot on the world. Emerging Markets look terrible. They are on a SELL SIGNAL in my Best Stocks Now App. I am considering EUM, which is an inverse Emerging Market ETF.
- Investors in Argentina are bracing for a market and peso selloff after Sunday's primary, which saw voters soundly reject President Mauricio Macri's austere economic policies.
- A coalition backing opposition candidate Alberto Fernandez - whose running mate is former president Cristina Fernandez de Kirchner - led by a wider-than-expected 15 percentage points with 47.3% of votes, with 88% of ballots counted.
- A candidate needs at least 45% of the vote or 40% and a difference of 10 percentage points over the second-place runner in order to win the presidency outright. Voters will return for a run-off on Nov. 24 if there is no clear
- Loma Negra Compania Industrial Argentina Sociedad Anonima (NYSE:LOMA) -45% as Argentina's stocks tumble after Macri's upset defeat in primary vote.
- Grupo Financiero Galicia S.A. (NASDAQ:GGAL) -43% as Argentina's stocks tumble after Macri's upset defeat in primary vote.
- Grupo Supervielle S.A. (NYSE:SUPV) -43% as Argentina's stocks tumble after Macri's upset defeat in primary vote.
- Banco Macro S.A. (NYSE:BMA) -39% as Argentina's stocks tumble after Macri's upset defeat in primary vote.
- Pampa Energia S.A. (NYSE:PAM) -39% as Argentina's stocks tumble after Macri's upset defeat in primary vote.
- Central Puerto S.A. (NYSE:CEPU) -34% as Argentina's stocks tumble after Macri's upset defeat in primary vote.
- Despegar.com (NYSE:DESP) -31% as Argentina's stocks tumble after Macri's upset defeat in primary vote.
- YPF Sociedad Anonima (NYSE:YPF) -31% as Argentina's stocks tumble after Macri's upset defeat in primary vote.
- CannTrust Holdings (NYSE:CTST) -26% on regulatory issues at Vaughan facility.
- Entercom Communications (NYSE:ETM) -14%.
- MercadoLibre (NASDAQ:MELI) -8% as Argentina's stocks tumble after Macri's upset defeat in primary vote.
I find it interesting that the “R” word is now starting to surface here and there.
- Piper Jaffray names Akamai (NASDAQ:AKAM) as its top networking pick in the event of a recession or macro downturn.
- The firm cites AKAM's strong balance sheet, lack of China exposure, and tailwinds related to the over-the-top video streaming, online gaming, and cloud security markets.
- Piper reaffirms an Overweight rating and $97 price target.
- AKAM shares closed last week at $89.92. The company has an Outperform average Sell Side rating.
Another AMD upgrade.
- Cowen reiterates an Outperform rating on AMD (NASDAQ:AMD) and raises the price target from $40 to $42.
- The firm cites a meeting with CTO Mark Papermaster and the unveiling of AMD's new server processor that put the company in strong competition with Intel.
- Cowen thinks AMD's consistent product execution across PC, GPU, and server can deliver upside to gross margin targets and material upside to the FY20 targets.
- AMD shares are down 0.4% pre-market to $34.04. The company has a Hold average Sell Side rating.
Roku rocks again.
- Needham pushes Roku's (NASDAQ:ROKU) target from $120 to $150 and affirms it as the firm's top mid-cap pick for 2019.
- Analyst Laura Martin cites ROKU's "dominant" market position, comparing the company to YouTube's position for user-generated content. Martin says the "value proposition to advertisers is growing."
- Needham maintains a Buy rating. Roku has an Outperform average Sell Side rating.
- ROKU shares are up 0.2% pre-market to $125.56.