🍨 Daily Scoop: Deal or No Deal?
By Thu, Oct 17, 2019
Hey Scoopers,
The stock market took a breather and barely budged on Wednesday. Investors are asking whether there was ever a mini-deal between the U.S. and China. Beyond the overall market, one streaming platform wow’d investors, while SaaS stocks took a hit out of fear of slower growth in the enterprise market.
Scroll down to the “Overall Market,” “What’s Up?” and “What’s Down?” sections to read more.
MARKETS
- U.S. markets: All three indices finished Wednesday lower than where they started it, but just slightly. One can say the stock market barely moved. Scroll to the “Overall Market” section to learn more.
- Cryptocurrency: The inevitable happened, and Bitcoin’s price dropped lower than $8,000 per coin. Technical analysts continue to predict lower prices for Bitcoin before things turn out for the better.
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OVERALL MARKET
Deal or no deal?
What happened on Wednesday?
The stock market didn’t really move. However, more reports indicate that the U.S. and China didn’t really land on any specific agreement last week.
What does this mean?
Some are saying that China is not going to buy more agricultural products from the U.S. President Trump wants to meet his Chinese counterpart in November before signing anything. Also, there are reports about China not being happy about the U.S. bill supporting Hong Kong protests. As we discussed on Monday, the trade deal is not something we should expect to happen anytime soon.
Make sure you are ready for more volatility caused by trade-related news. When it comes to the stock market, the one certain thing you can bet on and win is that the stock market will fluctuate without you having any control over it. You have to consider that in all your investment decisions.
WHAT’S UP
Wowza, Netflix
So, what happened?
Netflix (Ticker: NFLX) did it again. The company announced its latest quarterly earnings report, and the company grew its revenue by more than 31% compared to the last year. Paid membership also grew by more than 21% globally. Despite all the worries about the streaming war, Netflix keeps growing at an astonishing rate. Netflix keeps doing it!
Now, the analysts are saying that this is the last quarter Netflix can grow before the streaming war kicks in. Another point of view is that all these new streaming companies will realize it is so hard to do what Netflix does well. The truth is most likely somewhere in between. For now, investors in the company are enjoying an approximately 9% increase in the stock price.
So, what happened?
Shares of three giants, JPMorgan Chase (Ticker: JPM), Johnston and Johnston (Ticker: JNJ), and UnitedHealthcare (Ticker: UNH) moved 3.02%, 2.2%, and 8.12%, respectively. All three companies had their better than expected quarterly earnings reports to thank for their higher stock prices on Tuesday.
WHAT’S DOWN
SaaS companies took a hit
Workday (Ticker: WDAY) had its user conference this week. These conferences are usually meant to get people excited about the company. However, things didn’t pan as planned for Workday. The company talked about slower growth, and financial analysts saw that as a reason to cut their price target.
The bad news didn’t stop with Workday. It also dragged the shares of a few other SaaS stocks, such as Okta (Ticker: OKTA), Splunk (Ticker: SPLK), and Atlassian (Ticker: TEAM), among others.
WATER COOLER
What’s up with Boeing?
So, what happened?
It’s been a while since we talked Boeing (Ticker: BA), and its grounded 737 Max fleet. To our surprise, when we checked the stock price today, it’s up to the overvalued range of $370. Think about that? The company has its most prized fleet of planes grounded, and to add insult to injury, Airlines have all cancel any flight schedule with the 737 Max planes until January. United Airlines CEO just told reporters that no one really knows when those aircraft will be ready to fly.
It’s surprising how supportive the stock market is to Boeing. Parts of it is that there is a global duopoly in the plane manufacturing industry between Boeing and its European counterpart, Airbus.
The other reason is that the company is out of the news these days. When there is no news, people forget about the company’s problems. Algorithms go back to their usual buying streak, and no one sells off the stock.
It’s quite likely that Boeing doesn’t end up with a safe plane to fly in January. It is very possible, but based on the stock price action in the last few weeks, no one cares.
What’s your take? Do you own Boeing’s stocks?
About the Author
The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card
