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Afternoon Note

Knee Jerk Reaction

By Charles Payne, CEO & Principal Analyst
12/3/2019 1:42 PM

The market is responding to the latest tariff news. Stocks of companies with higher-than-average overseas sales are underperforming. Caterpillar (CAT) slipped 2.3% and Apple (AAPL) dropped 2.4%.

The Dow is down 1.3%, while the S&P 500 and Nasdaq are down 1%, respectively.  Among the 11 sectors of the S&P 500, financial is the weakest with 65 of the 67 stocks trading in the red.  In addition, the 10-year note fell 13.2 basis points to 1.70%, the biggest one-day decline, not seeing since June 2016.

S&P 500 Index



Communication Services (XLC)



Consumer Discretionary (XLY)



Consumer Staples (XLP)



Energy (XLE)



Financials (XLF)



Health Care (XLV)



Industrials (XLI)



Materials (XLB)



Real Estate (XLRE)



Technology (XLK)



Utilities (XLU)



The VIX, the so-called ‘fear index’ is trading above 16 for the first time in over a year, which means investors didn’t price in the return of stock market volatility anytime soon.

In merger news,  Cleveland-Cliffs (CLF) is buying Ak Steel (AKS) in a $1.1 billion deal.  AKS shareholders will receive 0.40 shares of CLF for every share of AKS common stock they own. 

Roku Roars Back

A day after Roku was downgraded; the stock is stronger today, up 5%. Needham raised its price target to a Street-high of $200 from $150. According to the research firm, they believe Roku will continue its massive growth in the streaming-video space.

The markets are well off the lows of the day. Let's see if buyers will emerge into the close. 


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