The stock market came into Wednesday near all-time highs, but that sentiment didn’t soften the blow in the stock market today. In fact, hovering so close to the highs likely hurt equities on Wednesday.
Trade worries weighed on futures before the open, but those concerns subsided as investors remained unfazed. However, midday reports about the phase-one trade agreement being pushed off to 2020 sent a chill through the market.
Markets quickly retreated and while bulls are doing a decent job defending the market, we’re finally seeing some volatility creep back into stocks.
Days like today are perfect reminders for traders. Reminders to tighten up stop losses, book some profits and get a little pickier on trade selection. It’s also a reminder that cash is a position. That said, it’s not a time to panic. We don’t know if this is a 1% correction or 5%-plus correction. Let’s see what the market gives us and go from there.
For those interested, here’s a technical look at the S&P 500.
Retail Rebound
While it’s gloom in the stock market today and it was doom in the retail sector on Tuesday, a few companies are doing their best to change the tides. That is, Target (NYSE:TGT) and Lowe’s (NYSE:LOW) erupted to new all-time highs on Wednesday on better-than-expected earnings.
Earnings of $1.41 per share came in 6 cents ahead of expectations for Lowe’s. Management upped its full-year earnings outlook, helping investors overlook revenue of $17.4 billion that came up short of estimates by $300 million and declined 20 basis points year-over-year.
Target did even better, though. The company beat on earnings and revenue expectations, raised its full-year earnings outlook and reported an increase in both gross and operating margins. Comparable-store sales growth came in at 4.5% against expectations of 3.5% growth, while e-commerce sales jumped 31%. It’s no wonder shares rallied 14% on the day, nor is it surprising that Bank of America Merrill Lynch analysts assigned a $150 price target after the report.
Movers in the Stock Market Today
Apple (NASDAQ:AAPL) continues its expansion in Austin, Texas, breaking ground on its new 3 million square foot campus set to open in 2022. It will house about 5,000 employees to start with but has the means to grow up to 15,000, more than double the 7,000 employees Apple currently has in Austin. Austin isn’t the only place Apple is growing, with Boulder, Culver City, New York, Pittsburgh, San Diego and Seattle all on the expansion list too.
Disney’s (NYSE:DIS) Frozen 2 will hit 4,400 theaters in North America this Friday and to say the world is ready for it is an understatement. Disney expects the film to draw a whopping $100 million in the first weekend. The first Frozen film ended up doing more than $1.3 billion at the box office when it was released in 2013.
Tesla’s (NASDAQ:TSLA) upcoming pickup truck unveiling in California is gaining some serious chatter. The event, scheduled for Thursday evening, will put yet another Tesla vehicle in motion. Tesla will have plenty of competition in the pickup market, competing with Ford (NYSE:F), General Motors (NYSE:GM) and Fiat Chrysler (NYSE:FCAU). Capacity, towing, power output and off-road capabilities are all things to look for in tomorrow’s event.
Heard on the Street
Raymond James upgraded Intelsat (NYSE:I) to “outperform” with a price target of $12. Remember, this name just plunged 40% in a single session earlier this week. The target implies almost 70% upside from current levels.
Johnson & Johnson (NYSE:JNJ) shares were initiated at Cantor with an “overweight” rating and assigned a price target of $160.
The feeling on Kohl’s (NYSE:KSS) is apparently neutral after the company’s earnings whiff and subsequent fall. Both Goldman Sachs and Telsey cut the stock to a “hold”-equivalent rating and assigned price targets of $48.
Bank of America upgraded Canopy Growth (NYSE:CGC) to a “buy” rating, while slapping a $24 price target on the stock. The valuation is more reasonable and estimates look “achievable (even beatable),” according to the analyst.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL and DIS.