Sigh. The Dow Jones Industrial Average couldn't hold on to its gains...again. In today's Intraday Update, we...
•...explore the impact of "nonlinear policy making" on the market;
•...consider Macy's (M) big gain and Myriad Genetics’ (MYGN) big drop;
•...look back at American Express' (AXP) investor day;
•...and examine the shift of sporting events to the internet.
And down we go.
The major market indexes opened up this morning, and even a short while ago the Dow Jones Industrial Average was clinging to its gains. Not anymore. The S&P 500 has fallen 0.4%, to 2770.91, while the Dow has declined 78.84 points, or 0.3%, to 25,099.77. The Nasdaq Composite has dropped 0.7%, to 7531.91.
Illustration: Getty Images
What's got the market down? Your guess is as good as ours. But part of the problem could be the ad hoc policy making that's coming out of Washington. Remember, tariffs talk caused the market to tank until it was watered down, while yesterday's announcement that the Trump Administration had blocked Broadcom's (AVGO) takeover of Qualcomm (QCOM)—before there was even a deal—had to raise questions in the minds of any merger-minded executive.
And then there's the departure of Rex Tillerson as Secretary of State this morning. Wells Fargo economist John Silvia calls it "nonlinear policy making," and that seems as good a description of it as any. It might not be an easy environment for capital-allocation decisions—but it shouldn't come as a shock. "President Trump was elected to disrupt," Silvia writes. "Therefore, it is not surprising that established interests are opposed."
It does require a different kind of thinking, though, doesn't it?Midday Movers
Illustration: Getty Images
Kohl's (KSS) has gained 3.5%, to $64.60, at 1:42 p.m. today, and Macy's (M) has climbed 4.4%, to $30.02, after Macy's presented at the Bank of America Merrill Lynch Consumer & Retail Technology Conference. Credit Suisse also initiated coverage of the two stocks: Kohl's was assigned an Outperform rating, while Macy's was slapped with a Neutral rating.
Alaska Air Group (ALK) is rising 3.4% on its February operations update, joining United Continental Holdings (UAL), Spirit Airlines (SAVE), and other airlines on the rise today.
AbbVie (ABBV) has gained after it revealed that a Phase 3 study of its uterine fibroid treatment succeeded.
FedEx (FDX) has gained 2.4%, to $252.44, after Citigroup said it's time to buy the stock, which has been range-bound for much of the last month.
Myriad Genetics (MYGN) has tumbled 12%, to $29.21, after getting subpoenaed by the Department of Health and Human Services looking into “possible false or otherwise improper" Medicaid and Medicare claims.Out of Sight, Not Out of Mind: American Express
American Express (AXP) shares haven't made much headway since the company’s investor day last week, and the stock is down more than 3% year to date, a far cry from its high-flying 2017 performance. Is it time to buy?
Illustration: Justin Sullivan/Getty Images
Yes, argues Oppenheimer's Ben Chittenden, who says investors need to look at the bigger picture.
About that investor day: Chittenden argues that the takeaway wasn't new figures to plug into a model, but larger assurance that its long-term business is still "hitting on all cylinders." He writes that the presentations showed that all segments are seeing accelerating activity, helped in large part by management's savvy strategy.
That gives the company—and him—greater confidence about its ability to execute and competitive positioning. "There is clearly an evolutionary process going on in order to get revenues/earnings to the next level," he explains. "It's a work in progress, but we continue to like the AXP story." Chittenden says the stock can trade up to $117.
Now if it can only overcome the gender pay gap and the near-term repercussions of the tax bill.
Shares of American Express have slipped 1.8%, to $95.92, at 2:05 p.m. today.Let the Online Games Begin
Social media is already a place where sports fans go to vent their emotions. Will it be the place they watch games as well?
Illustration: Getty Images
Last week, Facebook (FB) announced that it would stream up to 25 weekly Major League Baseball games, starting this year. This is just the “tip of the spear” for sports programming content initiatives, writes GBH Insights' Daniel Ives.
Ives sees the deal—reportedly worth between $30 million and $35 million—as the start of Facebook's sports programming ambitions, as evidenced by its recent hiring of former Eurosport CEO Peter Hutton.
Of course, what one tech giant has its eye on is likely to be on others' radar as well. As such, Ives argues that the next 12 to 18 months are a "pivotal window" for companies like Facebook and Amazon.com (AMZN) to aggressively go after rights—especially if they hope to get ahead of Disney's (DIS) own streaming initiatives for ESPN.
He believes that Google parent Alphabet (GOOGL) and Apple (AAPL) are the wild cards in the battle for live sports content, as it will depend on their strategic content directions, and he also sees Snap (SNAP) and Twitter (TWTR) "tangentially" in the mix. The NFL, MLB, and NHL will see media rights deals largely end in 2021, which could be the first major opportunity for Amazon, Facebook, and other big tech firms to make an even bigger move.
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