THE sell off we are all looking for now may be the type of existential threat to the sector that Cambridge Analytics represents with FB or the fear that Alexa (home) and Uber (car), Facebook (personal) and Google (everywhere) could conspire against us, really. It’s One thing to watch the Ed Snowden movie and decide it won’t hurt if we cover up our WebCam and microphone but it’s another thing for legitimate entities to prove that we needed to cover up our WebCam and microphone.
Tech is vulnerable – if not for the credit risk presenting itself in investment grade markets or unsustainable valuations – now we have growing fears that hits deeper: that which we loved could hurt us. Trust can be given and it can be taken away.
Today’s Markets
In Asia, Japan -0.5%. Hong Kong +0.1%. China +0.4%. India +0.2%.
In Europe, at midday, London +0.3%. Paris +0.2%. Frankfurt +0.2%.
Futures at 6:20, Dow -0.1%. S&P flat. Nasdaq -0.2%. Crude +1% to $62.75. Gold -0.4% to $1312.20. Bitcoin -1.6%to $8458.
Ten-year Treasury Yield +2 bps to 2.86%
Stocks of Interest
- Tesla’s (TSLA) shares slip after Goldman Sachs said Q1 2018 Model S/X deliveries are tracking below guidance and believes Model 3 deliveries will fall “well short” of consensus expectations
- Large digital companies operating in the EU like Alphabet (GOOGL) and Twitter (TWTR) could face a 3% tax on their gross revenues based on where their users are located, according to Bloomberg, citing a draft proposal by the European Commission
- Facebook fell as much as 8.1 percent to $170.06 on Monday in New York, wiping out all of the year’s gains so far. That marked the biggest intraday drop since August 2015. Facebook, meanwhile, has sought to explain that the mishandling of user data was out of its hands and doesn’t constitute a “breach” – a definition that would require the company to alert users about whether their information was taken, per U.S. Federal Trade Commission rules.
- BlackBerry shares jumped 5.1% in after-hours trading on news of a strategic partnership with Microsoft (NASDAQ:MSFT). The enterprise software deal will provide a secure environment for Microsoft Office apps like Excel, PowerPoint or Word. The “first-of-its-kind solution,” BlackBerry Enterprise BRIDGE (NYSE:BB), will also help business users access the apps on Apple and Android devices.
- ARNA – Phase 2 UC data reads close to a home-run -JMP Securities raises PT to $79 this morning. Muted aftermarket stock reaction (+25% and below recent highs) reflects misconstrued debate regarding cardiac safety, and presents a good buying opportunity, JMP
Barron’s mentions:
Gap (NYSE:GPS) is identified as a stock that could run up 25% on the back of the Old Navy business, while investor concerns on Allergan (NYSE:AGN) are called overdone. In a piece on Broadcom (NASDAQ:AVGO) – Xilinx (NASDAQ:XLNX), Micron, Microchip Technology (NASDAQ:MCHP), Marvell Technology Group (NASDAQ:MRVL), Maxim Integrated Products (NASDAQ:MXIM) and Analog Devices (NASDAQ:ADI) all make the list of potential Plan B options for the company after the Trump Administration snub on Qualcomm (NASDAQ:QCOM).
Good Reads
Great Bloomberg article on Credit markets and Tech
“If credit spreads widen, the equities with bad balance sheets will underperform,”
U.S. equity funds took in a record $34.5 billion in the week to March 14, compared to just $2.4 billion for bonds, according to Stanford C Bernstein & Co. That brings the quarterly total for debt funds to $37.3 billion, the slimmest quarterly addition since the three months ending in December 2016, the data show.
The prospect of a risk-off trade that would weaken stocks and lift government bond prices.
My Price Targets for Key Plays if Market Pullsback
DIA break of 243.50 = 234/ 200D; bullish >255
BA break of 325 = 300/ 30wk; bullish >137
INTC break of 50 = 48.50 /10wk; bullish >53
HD break 175.50 = 168 /200D; bullish >186
V break 122 = 119 to start; bullish >125
UNH 214
AAPL 170
MCD (in room Mon was easy short 163-159) with Morning Star Reversal on D with PT at 21/8 support which is $159. Now we could have sideways chop until 154.60 breaks; bullish >164
MMM break 229 = 220/215; bullish >245
CAT with USD bounce = 140; bullish >162
SMH breaks 108 = 101, bullish >111
SPX breaks 2702(2694) = 2650 (2610, 2390), bullish > 274
QQQ breaks 166 = 162 then 158 /30wk to 154; bullish > 168
IWM breaks 155.40 = 151; bullish > 160
FB PT at 177 open was 170; MUST HOLD OR 166 – 160 and I think this is #NotDone
NVDA to 233 cont short
NFLX to 287 cont short
TSLA to 300 cont short
SNAP h-shape break of 16.35 = 15 /61.8 fib
BABA break 191.75 = 186.30/184 bullish >199
VXX in room said 41-44 then PB to 42 before finishing at 46 this wk 56 next and then we’ll see
FXY H&S break at 89.30 = 87.50 and with that GLD should fall.
XLE 65 is double support so when it breaks = 60 bullish >69
XLF breaks 28
GLD breaks 124.50 = 122 then 119
With that, Happy Trading!
Samantha
