The U.S. and China signed phase one of the trade deal, helping send equities higher in the stock market today. Well, at least initially. After pushing higher on Wednesday, stocks had trouble maintaining their gains going into the close.
Is this setting up as a sell-the-news event? Will it be too hard to sustain this rally, particularly as earnings get underway?
These are the questions that investors are asking themselves with U.S. markets still hovering near the highs.
Case in point? Bank of America (NYSE:BAC). This stock has been on fire, like most bank stocks, yet is down on Wednesday. That move comes after a top- and bottom-line beat, and yet, the stock isn’t advancing. That’s a sign that the rally has been too much, too fast and that a pullback may be in order.
That doesn’t mean Bank of America is bearish or that it will crater 10%-plus. But it’s something to think about given that we’re only two days into earnings season and many stocks look like BAC.
Movers in the Stock Market Today
Goldman Sachs (NYSE:GS) struggled to rally after its mixed report. While revenue of $9.9 billion smashed expectations by more than $1 billion, earnings came in well short of expectations. That’s as the bank took a $1.1 billion litigation charge. Without it, GS would have crushed both estimates. The silver lining for bulls? Goldman hit a new 52-week high in the stock market today.
Target (NYSE:TGT) shares weren’t quite as lucky, sinking about 6.7% on disappointing holiday sales. Comparable-store sales rose just 1.4% for the two-month holiday period of November and December.
Nio (NYSE:NIO) shares erupted on Wednesday, and even though they closed well off the highs, still added 14.1% on the day. The stock was up on news that GAC Group, a state-owned automaker, may invest $1 billion in the company. Like Tesla (NASDAQ:TSLA), new funding is being seen as a positive by investors.
Sticking with China, a day after Visa (NYSE:V) agreed to buy Plaid for more than $5 billion, the company received good news. In fact, several credit card companies did. Visa, Mastercard (NYSE:MA) and American Express (NYSE:AXP) will receive access to China’s payments markets, as part of the phase-one trade deal.
Shares of Beyond Meat (NASDAQ:BYND) are finally in retreat on Wednesday, falling 8.5%. The company agreed to a multi-year deal with Roquette to keep its pea protein supply coming, and a deal with McDonald’s (NYSE:MCD) bolstered sentiment too. But after rallying 80% over the past few days, investors — understandably — felt it was too far, too fast.
Heard on the Street
MoffettNathanson raised their price target on Disney (NYSE:DIS) from $150 to $165. The move comes after a bullish report was published regarding downloads for the Disney+ app.
Qualcomm (NASDAQ:QCOM) caught a price target boost too, this time from Canaccord. They bumped their target from $101 to $115 on the company’s 5G potential.
Guggenheim is feeling bullish on Facebook (NASDAQ:FB), upping their price target to $275 from $230. The analyst argues that Facebook has “significant growth runway.”
First Solar (NASDAQ:FSLR) was pegged with a double downgrade on Wednesday, as Barclays went from an “overweight” to an “underweight” rating and slapped a $49 price target on the stock. While shares slipped 6.9% as a result, the target still implies about 10% downside.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long DIS.