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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

 

-0.99%

Communication Services (XLC)

 

-0.71%

Consumer Discretionary (XLY)

 

-1.31%

Consumer Staples (XLP)

 

-0.76%

Energy (XLE)

 

-1.15%

Financials (XLF)

 

-1.85%

Health Care (XLV)

 

-0.44

Industrials (XLI)

 

-1.39%

Materials (XLB)

 

-0.79%

Real Estate (XLRE)

+0.61%

 

Technology (XLK)

 

1.35%

Utilities (XLU)

+0.13%

 

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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