Bill Gunderson’s Daily Market Observations for Friday 9/27/19

Friday 9/27/19=DJIA -67 NASDAQ -91 U.S. 10yr=1.68%
Limit U.S. Investments in China?
Minnesota Oct. 15, 16, & 17-Bill Gunderson and his team will be at the Radisson Blu-Mall of America. Call (855)611-BEST or visit our website to make an appointment.
Daily Wrap: The market is looking for direction! It really wants to go up, but each time it does it gets knocked back again by bad news on the U.S./China trade front. The market really needs a resolution to this mess. Maybe this latest threat, which almost seems nuclear, will do the trick. Only time will tell.
Trading: It was a very dull day in the market today. It really spiraled down, however when Trump hinted at limiting U.S. investment in China. This almost seems like the nuclear option. All I did today was add a little bit here and there to some dividend paying stocks for new clients. The growth stocks were under pressure once again today.sition in my Ultra-Growth Portfolios. It is a leading stock in a leading sector. I still see 85% upside potential over the next 5 years in it. I also bought a brand-new position in the Dividend and Growth Portfolios. It is a semi-technology stock with nice dividend yield, a lot of momentum and good value.

Tweets: I was a little quiet on Social Media today. I sent out tweets on: MU and BABA.
The market wants to go higher, but the drumbeats continue from the media.

Futures reverse, point to gains
• U.S. stock index futures are ahead by 0.4%, recouping some of the losses caused by yesterday's political turmoil.
• Overnight, China's top diplomat, Wang Yi, said Beijing was willing to buy more U.S. goods, and said trade negotiations would yield results if both sides "take more enthusiastic measures" to show goodwill and reduce "pessimistic language."
• Also keep an eye on the chip sector after weak guidance from Micron Technology late Thursday caused the stock to slide 7% in after-hours trading.

Hard to believe!

European shares log sixth week of gains
• Japan -0.77%.
• Hong Kong -0.33%.
• China +0.11%.
• India -0.41%.
• London +1.18%.
• Paris +0.37%.
• Frankfurt +0.79%.

The U.S. economy is still doing just fine.

Durable goods post surprise jump in August
• August Durable Goods: +0.2% vs. -1.2% expected, +2.0% prior (revised from +2.1%).
• Core Durable Goods: +0.5% vs. +0.2% expected, -0.5% prior (revised from -0.4%).

Pending home sales comes in strong
• August Pending Home Sales: +1.6% to 107.3 vs. +0.6% expected and -2.5% prior

Welcome to the S&P 500

Las Vegas Sands +4.5% amid move to S&P 500
• Las Vegas Sands (NYSE:LVS) is up 4.5% alongside news that it's joining the S&P 500 index.
• The company will replace Nektar Therapeutics (NASDAQ:NKTR) in the 500, and Nektar will move down to the MidCap 400 index to replace Sotheby's (NYSE:BID), which is set to be acquired by BidFair USA.
• Those moves are effective prior to the open of trading on Thursday, Oct. 3.
• Meanwhile, The Pennant Group (PNTG), a spin-off of The Ensign Group (NASDAQ:ENSG), is joining the SmallCap 600 before the open of trading on Tuesday, Oct. 1.
• Making way for Pennant Group is Gulf Island Fabrication (NASDAQ:GIFI), set to be removed from the SmallCap 600.
Meet the new boss at Wells. Same as the old boss?

Wells Fargo recruits BNY Mellon's Scharf for CEO
• Six months after Tim Sloan stepped down as CEO after attempting to restore the bank's reputation after a rash of scandals, Wells Fargo (NYSE:WFC) names Charles W. Scharf CEO and president as well as a member of the board as of Oct. 21.
• WFC gains 2.2% in premarket trading.
• Scharf comes to San Francisco-based Wells Fargo from Bank of New York Mellon (NYSE:BK), where he was chairman and CEO.

Wow, a cannon shot fired across the bow of rival discount brokers!

Interactive Brokers launches 'Lite' service; rivals slip
• Interactive Brokers (IBKR -3.1%) is launching a new zero-commission service, IBKR Lite.
• The news is pounding rival brokerage stocks. TD Ameritrade (NASDAQ:AMTD) -4.4%; E-Trade (NASDAQ:ETFC) -3.6%; Charles Schwab (NYSE:SCHW) -1.8%.
• IBKR Lite offers commission-free, unlimited trades with no account minimums and no inactivity fees.
• It also promises free market data for U.S. exchange-traded stocks, high interest on idle cash (1.5% under Fed Funds rate) and low margin rates (2.5% over Fed Funds).

No thanks!
Peloton spins its wheels in public debut
• Peloton (PTON) is currently swapping hands at $26.80 on its first day of trading and hit a low point of $26.25 earlier in the session.
• The public debut of the cycling fitness service is the third-worst for companies that have raised at least $1B over the last ten years, according Bloomberg.
• While the underwriters of the IPO have to hold their pens in check for a few weeks, Seeking Alpha authors were decidedly bearish heading into the splashy IPO.

Do you have your 11 yet?

Apple iPhone 11 seeing 'decent' demand - UBS
• UBS says Apple (NASDAQ:AAPL) is seeing "decent" demand for the iPhone 11 family, but notes that expectations are low.
• Analyst Timothy Arcuri says the launch "appears strong at least in the U.S." and that spot checks don't "suggest the type of short-falls in sales that we saw last year." But the supply chain is still being conservative with build plans.
• Apple shares are down 0.5% to $220.02. Apple has an Outperform average Sell Side rating.

Micron hurt the tech stocks today.

Micron -5.7% on weak NAND forecast
• Micron (NASDAQ:MU) -5.7% reports Q4 beats with revenue down 42% Y/Y. Peer Western Digital (NASDAQ:WDC) -2.3% also dropping after the report.
• Q4 operating cash flow was $2.23B, down from $2.71B in Q3 and $5.16B in last year's quarter.
• Q1 guidance sees upside revenue of $4.8-5.2B (consensus: $4.78B) and in-line EPS of $0.39-0.53 (consensus: $0.49). The company expects gross margin of 25-28% and capex of $7-8B for FY20.
• Huawei impact: Sales to Huawei declined sequentially and were "down meaningfully" from what MU predicted before the U.S. ban. The company has applied for waivers with the government. If those aren't granted, the sales will worsen in subsequent quarters.
• DRAM outlook: CY19 bit supply growth slightly below the industry demand of mid-teens growth. For CY20, bit supply close to market demand. For FY20, cost reductions to moderate to high-single-digit percentage compared to CY19.
• NAND outlook: CY20 bit growth significantly below industry demand due to inventory supplies. Minimal cost reductions expected in FY20 with meaningful reductions expected in FY21.

I featured NOC on my show today.

Northrop Grumman wins $1.4B U.S. defense contract
• Northrop Grumman (NYSE:NOC) is awarded a $1.36B U.S. Navy contract to produce nine Japan configuration E-2D Advanced Hawkeye aircraft under the Foreign Military Sales Act, the Pentagon announces.
• This modification definitizes a previously awarded modification for long lead parts associated with the Japan E-2D aircraft.
• Work will be performed in many locations across the U.S., including St. Augustine, Fla., and Syracuse, N.Y.

Bill Gunderson

Bill Gunderson

Bill Gunderson is a wealth manager, syndicated financial talk show host, and author of the Best Stocks Now -- one of the top 10 best selling financial aps in the world.

He is a frequent guest on local and national media, including CNBC, Fox Business, Fox News, Bloomberg, Barron's, Forbes, and others.

His wealth management business caters to high net worth individuals clients all over the world. He would be happy to look at your portfolio.

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