Mattel Lifts Market Despite GE Plunge

What a day for GE! The stock plunged 7%, the company CEO, John Flannery, hoping to fan optimism and getting nothing less than the exact opposite. Flannery announced a company reorganization aimed at streamlining the conglomerate’s vast operations. That, though, didn’t come without costs. The annual dividend was slashed in half; it was only the second time since the Great Depression that the company cut its dividend. The stock saw its largest daily decline since the housing recession. Selling pressure didn’t abate, lasting all day long, shares trading down as much as 8.5% at one point in intraday trading. Having historically encompassed a huge range of businesses – with interests in media, chemicals, railroads, banking and marine engines – the company’s new focus will be on this trio: health care, aviation and energy.

GE, though, didn’t stop stocks from ending higher. The market bucked the dour news from the industrial powerhouse, also not getting bogged down by tax reform worries and concerns. Mattel (MAT) provided the counterweight, helping the S&P 500 rise 0.1% on the day, offsetting in very large part the weaker than expected 2018 guidance from GE.

Hasbro (HAS) made a bid for MAT. MAT jumped 20%, HAS adding as much as 8% in morning trading. The market sees the deal as positive all around, especially after Toys R Us declared bankruptcy. The economies of scale and pricing power the joint company would have certainly found favor in the market’s eyes. Their ability to leverage their unique niches is what made the market salivate, eagerly anticipating the blockbuster deal.

The NASDAQ also tacked on 0.1%, Facebook, Apple, Amazon and Netflix pushing ahead, biotech stocks and Apple, though, slipping on the day.

The Dow, in turn, got a lift from Boeing, with contributed the most to the 17 point gain on the blue chip index. GE, on the other hand, was the index’s biggest loser. Emirates, the Dubai airline, announced a provisional order for 40 Boeing 787 Dreamliner. For Boeing, the deal is worth $15.1 billion.

At the same time, it’s impossible to entirely tuck under the rug the prospect that tax reform won’t be completed until next year. As things have it, another worry gnawing at investors is that even if tax reform is pushed through this year, a corporate tax cut – if the Senate get its druthers – won’t make it through both houses of Congresses until 2019. Though the House wants a vote to be held already this week, the Senate doesn’t seem to want to budge. First Standard Financial chief market economist, Peter Cardillo, shared, “As the tax debate intensifies, investors are becoming more skeptical.” Cardillo added, “I think the market is caught in a reality check right now.”

Before Opening: Home Depot will be reporting Q3 earnings today before the opening bell. Hurricanes Harvey, Irma and Maria are likely to show up, giving the company a boost. The hurricanes hit in the company’s two key markets, Texas and Florida. KeyBanc wrote in a note, “We believe that both Home Depot and Lowe’s could report about a 200 basis-point sales lift considering the magnitude, costs, and the concentration of damage in Florida and Texas, the two key markets for Home Depot and Lowe’s.”  FactSet expects HD to see EPS of $1.82, up from $1.60 last year.

On the tech front, Amazon was compelled to sell off a large part of its hardware assets from its China public cloud business. Tightening online data regulations are clamping tech firms’ ability to operate. Being the world’s second largest economy, China’s Communist Party’s policy decisions can have far-reaching implications and consequences for large American firms. The jury is out to see how things will further develop; among other things, China’s lax patent protection has enabled cheap rip-offs that bite into global tech firms’ earnings, Apple likewise suffering, along with other companies.

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Economic Calendar

 

DAY TIME (EST) Event Forecast Impact
Tuesday 6:00 NFIB Small Business Optimism Index 105.0  Medium
Tuesday 8:30 PPI 0.1 % Medium
Wednesday 8:30 Consumer Price Index 0.1 % Medium
Wednesday 8:30 Retail Sales 0.1 % Medium
Wednesday 8:30 Empire State Mfg Survey 26.0 Medium
Wednesday 10:00 Business Inventories 0.1 % Medium
Wednesday 10:30 Oil Inventories Low
Thursday 8:30 Jobless Claims 235 K Medium
Thursday 8:30 Philadelphia Fed Business Outlook Survey 25.0 Medium
Thursday 8:30 Import and Export Prices 0.4 % Medium
Thursday 9:15 Industrial Production 0.5 % Medium
Thursday 10:00 Housing Market Index 67 Medium
Friday 8:30 Housing Starts 1.188 M Medium

 

Earning Calendar

 

Symbol Company AM/PM Day
WUBA 58.com Inc. AM Monday
TSN Tyson Foods, Inc. AM Monday
JD JD.com, Inc. AM Monday
AAP Advance Auto Parts, Inc. AM Tuesday
DKS Dick’s Sporting Goods, Inc. AM Tuesday
LNG Cheniere Energy, Inc. AM Tuesday
HD The Home Depot, Inc. AM Tuesday
TJX The TJX Companies, Inc. AM Tuesday
YY YY Inc. PM Tuesday
Z Zillow Group, Inc. PM Tuesday
TGT Target Corporation AM Wednesday
NTES NetEase, Inc. PM Wednesday
NTAP NetApp, Inc. PM Wednesday
LB L Brands, Inc. PM Wednesday
CSCO Cisco Systems, Inc. PM Wednesday
HP Helmerich & Payne, Inc. AM Thursday
WMT Wal-Mart Stores, Inc. AM Thursday
BBY Best Buy Co., Inc. AM Thursday
SJM The J. M. Smucker Company AM Thursday
VIAB Viacom, Inc. AM Thursday
WSM Williams-Sonoma, Inc. PM Thursday
GPS The Gap, Inc. PM Thursday
SPLK Splunk Inc. PM Thursday
ROST Ross Stores, Inc. PM Thursday
AMAT Applied Materials, Inc. PM Thursday
BRK-B Berkshire Hathaway Inc. AM Friday
FL Foot Locker, Inc. AM Friday

 

New York Strategy Swing

# Date Stock Long\

Short

Statues Data Close Profit\

Loss

1 1.9.2017 VNTV Long Close 14.9.2017 +1.35%
2 12.9.2017 CPB Short Close 15.9.2017 -1.10%
3 18.9.2017 INSM Long Close 22.9.2017 +1.92%
4 25.9.2017 GPS Long Close 2.10.2017 +1.69%
5 27.9.2017 SQM Long Close 29.9.2017 +1.69%
6 2.10.2017 ATI Long Close 6.10.2017 +3.12%
7 2.10.2017 TROX Long Close 18.10.2017 +13.93%
8 3.10.2017 ABT Long Close 11.10.2017 +1.60%
9 9.10.2017 ZGNX Long Close 12.10.2017 +3.26%
10 16.10.2017 INSM Long Close 19.10.2017 -2.82%
11 24.10.2017 CVS Short Close 1.11.2017 +4.77 %
12 30.10.2017 SKX Long Close 31.10.2017 -1.42%
13 31.10.2017 STX Long Close 2.11.2017 -0.15%
14 3.11.2017 AKAM Long Close 8.11.2017 +1.37%
15 10.11.2017 JUNO Long     +3.13%