Is Bankruptcy The Light At The End Of Your Tunnel?

Is Bankruptcy The Light At The End Of Your Tunnel?

Many things can happen in life that can cause personal financial strain. It can be brought on by poor decisions, loss of income or even, a death in the family. No matter More »

How To Pick The Best Personal Bankruptcy Lawyer To Help Your Case

How To Pick The Best Personal Bankruptcy Lawyer To Help Your Case

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Bankruptcy: What Are My Options And Limitations?

Bankruptcy: What Are My Options And Limitations?

Even though filing for personal bankruptcy can seem like something to put off, you should not wait too long to do it. Know what you are about to go through and then More »

Why Personal Bankruptcy Is The Best Option For Some People

Why Personal Bankruptcy Is The Best Option For Some People

Looking into bankruptcy can be like looking into a murky sea. With so many laws and regulations, how do you know what steps to take so you can file for bankruptcy and More »

 

Stocks making the biggest moves midday: Virgin Galactic, Square, Tesla, Box, Etsy & more

Inside Virgin Galactic’s hangar at Spaceport America in New Mexico.

Virgin Galactic

Check out the companies making headlines in midday trading.

Virgin Galactic — Shares of the space company sank more than 18% amid multiple pessimistic sell-side analyst notes. Both Credit Suisse and Morgan Stanley downgraded the equity from overweight/outperform to equal weight/neutral. Morgan Stanley analyst Adam Jonas wrote that the stock’s recent price surge over the last month means investors should be “waiting for the fundamentals to catch up.” Credit Suisse echoed that sentiment, saying the price had grown too frothy and that they are “no longer able to recommend SPCE shares” as such.

Tesla — Tesla dropped about 9% amid the broader market’s sell-off as investors ditched what Wall Street views as some of the market’s riskiest names. The stock, down more than 21% since Monday, came under pressure after Panasonic said it would end its partnership with Elon Musk’s electric-car company and stop producing solar panels with Tesla as soon as May. The announcement marked the latest rift between the two companies that have otherwise been partners in a broader push to sell electric cars.

Etsy — Shares of Etsy soared more than 11% after the e-commerce website reported earnings per share of 25 cents on revenue of $270 million, topping analysts’ expectations. Analysts forecast earnings per share of 16 cents on revenue of $265 million, according to Refinitiv. Etsy also issued full year revenue guidance above Wall Street’s estimates.

Box – Shares of Box surged 8% after the online storage software company reported better-than-expected earnings. Box beat estimates by 3 cents with adjusted quarterly profit of 7 cents per share, according to Refinitiv. The company also saw revenue beat estimates as demand for cloud services in general continues to accelerate.

Square – Shares of Square jumped 9% after the mobile payments technology company posted strong quarterly numbers. Square came in 2 cents ahead of estimates with adjusted quarterly profit of 23 cents per share, according to Refitiniv. Square saw its user base numbers surge compared to a year earlier.

Anheuser-Busch InBev – Shares of Anheuser-Busch InBev tumbled more than 8% after the beer brewer said its current quarter profit would decline by about 10% due to the coronavirus. The company expects the coronavirus outbreak to significantly hit demand for its products in China.

Microsoft – Shares of Microsoft are down 3.5% after the tech giant said it did not expect to meet prior guidance for its personal computing segment, due to supply chain disruptions related to the coronavirus outbreak.

Facebook, Apple, Amazon, Netflix, Google — Shares of the so-call FAANG stocks were hit hard by the market sell-off. Shares of Apple tanked 4%, Facebook shares fell 1.4%. Amazon fell 2.5% and Google parent Alphabet tumbled 3.2%. Netflix shares bucked the broader market’s trend, gaining 2.3%

Airlines, hotels — Travel stocks took a beating on Thursday morning as companies and countries around the world issued travel restrictions and advisories. Among airlines, American Airlines dropped 4.8%, JetBlue fell 3.5% and Southwest Airlines slipped 2.3% and hit a new 52-week low. Royal Caribbean plunged 6.4%, while fellow cruise stocks Carnival and Norwegian Cruise Lines were down roughly 3%. MGM Resorts also lost 3%.

Marathon Petroleum — Shares of the energy company slid 6% as the sector came under pressure, dragged lower by falling oil prices. At the lows of the day, U.S. West Texas Intermediate crude fell more than 5%, breaking below $46 to trade at its lowest level in 13 months. ConocoPhillips and Occidental Petroleum were each down more than 4%, with EOG Resources, Pioneer Natural Resources and Devon Energy all shedding more than 3%.

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JPMorgan says buy the dip, bank on Fed ‘insurance’ cuts

Trader Michael Urkonis works on the floor of the New York Stock Exchange, January 28, 2020.

Bryan R Smith | Reuters

For investors struggling to see an end to this market mayhem, JPMorgan said it’s time to buy the dip as the bank believes the coronavirus impact is “likely temporary” and the Federal Reserve will come to the rescue.

Stocks tumbled into correction territory briefly on Thursday as the massive sell-off accelerated amid concern over the fast-spreading coronavirus and its damage to the global economy. JPMorgan is sticking with its bullish market forecast, with a year-end S&P 500 target of 3,400, betting on “potential Fed insurance cuts” to lift stocks. The target represents a 10% rise from Thursday’s level.

“While it is easy to turn cautious on the market after a ~10% drop, we argue investors should not discount the benefit of announced and unannounced global policy responses that are likely to outlast the impact of COVID-19,” Dubravko Lakos-Bujas, J.P. Morgan’s chief U.S. equity strategist, said in a note on Thursday.

Amid the market rout, traders are increasingly pricing in a rate reduction in the coming months. The fed funds futures market is assigning a near 60% chance of a rate cut at the Fed’s April policy meeting, according to the CME FedWatch Tool. Traders also see the possibility of three reductions in 2020.

“Potential Fed insurance cuts at a time when the US employment base is close to full and prime-age participation rate is on a rise could result in an even hotter economy once the COVID-19 impact rolls off and stimulus remains,” Lakos-Bujas said.

JPMorgan’s view is more bullish than some of the other biggest banks on Wall Street. For instance, Goldman said Thursday it now sees zero earnings growth for U.S. companies this year because of the outbreak.

Still, JPMorgan believes the sell-off is only short-lived as it thinks the stock rout is also partly caused by the rise of Senator Bernie Sanders in the Democratic Presidential pool.

“Additionally, the market is pricing in rising odds of a progressive candidate, even though much can still change ahead of the DNC nomination, while polls remain firmly in favor of President Trump,” Lakos-Bujas said.

The bank is not alone in blaming the sell-off to the election. “Bond king” Jeffrey Gundlach also pointed the finger at Sanders for the market’s tumultuous rout this week.

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Goldman sees zero earnings growth for US companies this year because of coronavirus

People wait in a line to buy face masks at a retail store in the southeastern city of Daegu on February 25, 2020.

JUNG YEON-JE | Getty Images

Earnings growth for U.S. companies will be stagnant in 2020 as a result of the coronavirus, according to Goldman Sachs.

The Wall Street firm revised its earnings estimate for the year to $165 per share from $174 per share, representing 0% growth in 2020. That is a dramatic move from the consensus. Forecasts still expect earnings to climb 7% this year.

“US companies will generate no earnings growth in 2020,” Goldman Sachs chief U.S. equity strategist David Kostin said in a note to clients on Thursday. “We have updated our earnings model to incorporate the likelihood that the virus becomes widespread.”

U.S. equities have been in a tailspin this week on fears that the deadly virus will dent global economic growth. The rapid spreading of the virus across multiple continents forced the Dow Jones Industrial Average to drop more than 7% since Monday. The S&P 500 lost about 6.6% and the Nasdaq fell nearly 2% in the same period.

“Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity, and elevated business uncertainty,” said Kostin.

Dow futures on Thursday indicated a drop of 400 points at Thursday’s open, after the Centers for Disease Control confirmed the first U.S. coronavirus case of unknown origin in Northern California. A decline of that magnitude would put the 30-stock average in correction territory, down at least 10% from its 52-week high.

Investors, however, have held out hope that earnings would recover after coronavirus passes. Goldman, with this new note to clients, is shooting down that hope. Goldman expects S&P 500 companies will report a decline in earnings in first half of the year.

Companies like Apple, Nike and United Airlines have warned they will not meet their earnings and revenue guidance due to the virus’s impact on supply chains. Chip stocks have been especially hit hard as they have large portions of their revenues coming from China.

Microsoft raised a flag on Wednesday that the technology giant won’t meet quarterly revenue guidance for segment that includes Windows because of coronavirus.

“A more severe pandemic could lead to a more prolonged disruption and a US recession,” Kostin added. In this case, S&P 500 earnings would fall by 13% in 2020.

The firm expects earnings of $175 per share in 2021, representing 6% growth in earnings.

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— with reporting from CNBC’s Michael Bloom.

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Why coronavirus isn’t scaring Federated’s Phil Orlando out of the stock market

Federated Hermes’ Phil Orlando is putting money to work in coronavirus battered stocks.

The firm’s chief equity market strategist started buying large-cap domestic growth names on Monday night, hours after the Dow fell 1,031 points.

“This is an area that we took profits in at the end of last year. With the broad market down 8%, a lot of the stocks in this category have been down 15% or 20%,” he told CNBC’s “Trading Nation” on Wednesday. “If we’re looking out until the end of this year and into 2021, a lot of these stocks are offering terrific value.”

However, it doesn’t mean he believes the market is in the clear.

Orlando, who’s one of Wall Street’s biggest bulls for 2020, believes the coronavirus fallout could slam stocks for months.

“We think the life of this pandemic might be three to six months. Remember, this started back in December. Now the news is going to get uglier,” Orlando said. “But as we get to the middle of the year, I think we’re going to see the trajectory of this thing peaking and rolling over.”

Orlando may be a long-term optimist, but he had a major pullback in his forecast before the coronavirus outbreak. Late last year, he told “Trading Nation” that market valuations were stretched, and he expected the record rally to pause. He took steps to protect his assets by increasing cash.

‘Smack in the middle of it’

“We had a tremendous rally in the stock market. We were anticipating perhaps a 5% to 10% air pocket,” he said Wednesday. “Here we are smack in the middle of it.”

The Dow is down more than 2,000 points over the past three sessions. On Wednesday, the Dow and S&P 500’s early rally failed before the close. Thursday’s futures prices were down more than 1%.

“Our view is that we’re going to take some pain here in the first quarter and the first half,” Orlando said. “But then we see a nice rebound off of a very slow pace of growth in the second half of the year into 2021, and investors begin to price that in.”

Orlando has an S&P 500 year-end price target of 3,500, a 12% gain from Wednesday’s close. His 2021 target is 4,000, which implies a 28% jump.

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