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TYVM!~FUGLY Market~The Dow Plunged 552 Points Because Everybody’s Losing Now

By Evie Liu
Nov. 20, 2018 5:25 p.m. ET

{NO, will not get to see Great Grand daughter yet for awhile-have been on meds, and not had the Whooping Cough shot, she needs protection for awhile. Will be with all those five great grandsons at daughters house in KY-The WILD Ones!}

Gimme Shelter. With Tuesday’s closing bell, all 2018 gains have been wiped out. The three U.S. major indexes ended the day lower than where they started 2018. No sector was spared today. Retail led the way down, tech wallowing in the red, and energy stocks tumbled as crude prices plunged. In today’s After the Bell, we…

…dive into the FAANG’s ongoing deterioration;

…explain why Apple ’s (AAPL) troubles have a rippling effect;

…and expect to see more stuff on the shelves this shopping season.

Worst Thanksgiving Week Since Nixon

The market is not giving investors any relief just two days before the Turkey day. The Dow Jones Industrial Average tumbled 551.80 points, or 2.2%, to 24,465.64, while the S&P 500 declined 48.84 points, or 1.8%, to 2641.89 and the Nasdaq Composite lost 119.65 points, or 1.7%, to 6908.82.

The Dow is having its worst start to a Thanksgiving week since 1973, when it fell 5.21% over the first two days of the week. It is currently down 3.73% this week.

Damage in tech sector is one of the main drivers behind the recent turmoil, and there is no lack of bad signs.

The NYSE FANG+ index, which includes Tesla (TSLA), Twitter (TWTR), and Nvidia (NVDA) beyond the infamous FAANG stocks–have dropped below its 50-day moving average on Oct. 5. One month later, the index’s 50-day moving average crossed lower than its 200-day moving average–a technical signal called “death cross” by technical traders that suggests high likelihood of lost momentum and further decline.

There is a chance things might start picking up soon, according to Talley Leger from OppenheimerFunds. The last time we saw a death cross in the NYSE FANG+ index was in early 2016, writes Leger on Tuesday, but stocks in the index have already bottomed before it happened. “In other words, all the selling occured before the death cross, suggesting is might work better as a confirming buy signal for FANGs,” writes Leger.

Most investors clearly don’t think so yet. The index continued to drop another 1.4% during Tuesday’s trading. It’s now 23% down from the June peak.

One big concern about tech stocks is the possible smartphone saturation, as various Apple suppliers cut sales forecasts last week. “With 70% of people already owning a smartphone, you can see why this is a worry,” writes Dario Perkins from TS Lombard in a research report published Tuesday.

The weakness in the industry could spill over well beyond just Apple and its suppliers to the entire global economy, suggests Perkins, who points out some interesting data points about the “new tech cycle” in his Tuesday note.

The IMF estimates that smartphones accounted for a third of Asia’s export growth last year. Almost 6% of China’s exports in 2017 were smartphones, while other Asian countries–Singapore, Malaysia, Korea and Taiwan–see the mobile technologies making up between 15% and 33% of their total exports.

Despite the stock market’s tumble, this holiday season is projected to be strong.

Fueled by tax cuts and a strong labor market, American consumers plan on spending just over $1,000 this year, up 4.1% from 2017, according to a survey by the National Retail Federation. This year, Black Friday shoppers might be able to get some even better bargains–thanks to tariffs.

That may sound counter-intuitive. But trade-data firm Panjiva suggests that there was a surge in U.S. imports of consumer electronics and home appliances ahead of the holiday shopping season. “With 51.4% of U.S. home-appliance imports coming from China it’s likely there was stockpiling ahead of a potential new round of tariffs in the new year,” according to the firm.

From July through October, seaborne imports of laptops surged 46.4% from the year-ago period, while imports of TVs climbed 36.6%, and audio systems increased 30.2%. Household appliances have also jumped, according to Panjiva, with refrigerators rising 56.9% and microwaves by 20.0%.

A shopping tip: Enjoy it while you can before tariffs actually kick in.

The Hot Stock

Agilent Technologies (A) shot to the top of the S&P 500 on a very down day, following its fiscal fourth-quarter earnings report.

Agilent gained $4.91, or 7.8% to $67.52.

The testing and diagnostics firm earned 81 cents a share on revenue of $1.29 billion. Analysts were looking for EPS of 74 cents on revenue of $1.26 billion. For the first quarter, it sees EPS of 71 cents to 73 cents, in line with the consensus estimate for 72 cents. For the full year, Agilent forecast EPS of $3 to $3.05, on revenue of $5.13 billion to $5.17 billion. Consensus calls for EPS of $2.97 on revenue of $5.19 billion. The company’s board of directors also approved a new $1.75 billion share-repurchase plan.

Barclay’s Jack Meehan reiterated an Overweight rating and $80 price target on the stock, writing that “Agilent posted a very strong fourth-quarter print, which helps improve our conviction in the thesis heading into fiscal 2019. Organic growth of 9% in the quarter came in almost 400 basis points better than our expectations and guidance. Growth was broad-based across the company’s segments.”

Year to date, Agilent is up 0.8%.

–Teresa Rivas

https://www.barrons.com/articles/the-dow-plunged-552-points-because-everybodys-losing-now-1542752750?siteid=yhoof2&yptr=yahoo