Blame it on the month of October, or China or on the Federal Reserve. But Friday was marked by notable volatility in numerous groups and relatively stable action in others. Overall, we barely saw a decline in the stock market today, with the SPDR S&P 500 ETF (NYSEARCA:SPY) down just 0.2% in the final 15 minutes of trading.
The CBOE Volatility Index (VIX) is far from elevated, up about 2.6% to $14.15 late in the day Friday. We’re not in a very volatile environment, despite it being the month notoriously feared by investors. The U.S.-China trade war continues to cautiously improve, although the U.S. did just implement those $7.5 billion worth of tariffs against Europe.
So what happened Friday? At one point Roku (NASDAQ:ROKU) was down 10%. Other high-growth stocks — like Alteryx (NYSE:AYX), Shopify (NYSE:SHOP) and The Trade Desk (NASDAQ:TTD) — were rolling over too. It’s causing many to worry whether this group has bottomed.
But we saw an interesting decline elsewhere as well, in blue-chip stocks. Boeing (NYSE:BA) was hammered on company-specific news regarding its communications with the Federal Aviation Administration. Johnson & Johnson (NYSE:JNJ) was drilled after recalling a round of its baby powder. Even Microsoft (NASDAQ:MSFT) blew through its 50-day moving average before recovering later in the session.
JNJ, MSFT and BA were included in Friday’s Top Stock Trades column.
Chinese third-quarter GDP growth of 6% didn’t help matters, as it missed expectations of 6.1% growth. A round of Fed speakers had traders on their toes too. Oh yeah, and it’s options expiration for the month of October.
That’s a lot to think about and given the round of company-specific news, it’s no wonder we saw stocks under pressure Friday. The question is whether we will stabilize or continue lower.
Earnings Movers
Coca-Cola (NYSE:KO) shares pressed higher by about 2%, nearly hitting new 52-week highs. That’s despite the company’s in-line earnings results. Revenue of $9.5 billion grew 8% year-over-year and pushed past estimates by $80 million. Organic sales grew 5% vs. expectations of 4.1%, while management maintained its full-year outlook.
Schlumberger (NYSE:SLB) didn’t wow investors with its post-earnings rallying, climbing just over 1%. However, the stock did not go on to make new lows, which many may consider a win. The move comes after non-GAAP earnings of 43 cents per share beat estimates by 3 cents. Revenue of $8.5 billion grew 50 basis points year-over-year and beat expectations by $40 million.
However, likely causing some hesitancy from investors is Schlumberger’s GAAP loss of $8.22 per share or more than $11 billion. The company took a $12.7 billion goodwill charge in the quarter. So rallying in spite of this may very well be considered a victory.
American Express (NYSE:AXP) shares slipped 2% despite the company delivering a top- and bottom-line beat. Sales grew 8.4% year-over-year to $11 billion, which came in $50 million ahead of estimates. Management reaffirmed its prior earnings outlook range of $7.85 to $8.35 per share, with the midpoint of $8.10 per share in-line with expectations. Amex’s quarter reflected strong consumer spending.
Movers in the Stock Market Today
Shares of AT&T (NYSE:T) rallied almost 2% on Friday, on reports the company and activist investor Elliott Management may come to an agreement. The company delayed its earnings from next week to Oct. 28, allowing more time for the two parties to work together on various talking points. Those talks reportedly include margin improvement, buybacks, a change to the board and reviewing possible asset sales.
Oracle (NYSE:ORCL) co-CEO Mark Hurd took a leave of absence last month. On Friday it was reported that Mr. Hurd had passed away at the age of 62. When Hurd had taken his leave of absence, co-CEO Safra Katz was joined by former CEO and co-founder Larry Ellison. Hurd took the role of co-CEO in 2014.
Juul has suffered a massive decline in value, after recently trading at $90 in a secondary market compared to its summer price of $300 a share. At the time, Juul was valued at roughly $38 billion. Remember, Altria (NYSE:MO) took a 35% stake in Juul for $12.8 billion in December 2018. Altria shares are down about 10% this year and more than 20% from its highs.
Video game sales were down 8% to $1.28 billion in September, while hardware sales fell 22% to $240 million. Overall, video game spending was down 6% for the month, with the Nintendo Switch being the only platform with gains. NBA 2K20 was the best-selling game in September — and holds the top spot for all of 2019 — followed by Borderlands 3 and FIFA 20. Legend of Zelda: Link’s Awakening and Madden NFL 20 rounded out the top five.
Worth mentioning: FIFA and Madden belong to Electronic Arts (NASDAQ:EA), while NBA 2K and Borderlands 3 belong to Take-Two Interactive Software (NASDAQ:TTWO).
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long T, ROK and TTD.