Stocks Stage a Volatile Finish to Second Quarter

Walgreens struggled its first week on the Dow, while booted GE stock soared

Managing Editor
Jun 29, 2018 at 1:56 PM
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Trade war tensions took investors on a wild ride over the past five days, as evidenced by the Dow Jones Industrial Average (DJI) snapping a historic streak above its 200-day moving average. U.S. trade relations with the European Union (EU) and China remained icy all week, which kept upside in check. However, the major equity benchmarks all closed higher for the second quarter.

The Cboe Volatility Index (VIX) jumped to new June highs as traders bet on a summer volatility spike -- and volatility was especially rampant for tech stocks and oil prices. Meanwhile, the Russell 2000 Index (RUT) was hit with some profit-taking. 

Chip, Tech Names Hit by China Concerns

Diving right in, the VanEck Vectors Semiconductor ETF (SMH) was hit hard by China trade worries, and options bears piled on. Nvidia (NVDA), however, landed a few more bull notes from analysts. Advanced Micro Devices (AMD) stands out as another name in the sector that could benefit from upgrades this summer -- but the surprise departure of CEO Brian Krzanich from AMD's blue-chip rival Intel (INTC) prompted a downgrade.

In the broader tech sector, Seagate Technology (STX) has room to run after bouncing from its 120-day moving average, while online security name Okta (OKTA) sent up a bullish signal. A big winner this week was Marvell Technology (MRVL), which first received a key upgrade from Deutsche Bank, then a critical Chinese regulatory nod later in the week. Lastly, Square (SQ) stock's latest pullback to its 40-day moving average could be an ideal entry point.

Drug Stocks Turn In Volatile Week

Multiple drug stocks made outsized moves this week, too. One analyst set incredibly lofty goals for penny stock Avenue Therapeutics (ATXI), while Merrimack Pharmaceuticals (MACK) sunk to a record low after ending its pancreatic cancer drug development. 

Achaogen (AKAO) sold off after a Food and Drug Administration (FDA) rejection, while Acadia Pharmaceuticals (ACAD) scored a big FDA approval -- and failed studies sent more than one drug stock careening lower. Lastly, these two pharma stocks could once again be standouts in July.

Amazon Makes Waves With PillPack Purchase

The big story among FAANG names this week was Amazon.com (AMZN). Not only did the stock flash a buy signal, but the e-commerce empire led by Jeff Bezos made a splash in the pharmacy sector with its purchase of PillPack -- news that proved devastating for new Dow stock Walgreens Boots Alliance (WBA). (Newly demoted General Electric turned in a solid performance in its first week as a non-Dow member in over a century.)

Among other FAANG names, Apple (AAPL) stock landed an analyst nod, and streaming king Netflix (NFLX) received its most ambitious price target yet. Non-FAANG streaming stock Spotify (SPOT) enjoyed some bullish brokerage attention of its own. 

Other Weekly Winners and Losers

Rounding out this week's action, two steel stocks with cheap options look ready to climb in the coming weeks. The SPDR Gold Shares ETF (GLD), on the other hand, saw options premiums spike following a death cross.

Following the latest Fed rate hike, utilities ETF XLU just sent up a rare bullish signal, but options traders profited from puts on much-hyped bank stock JPMorgan Chase (JPM). And in the wake of a recent Supreme Court ruling, Shopify (SHOP) extended its recent sell-off.

Turning towards the consumer side, Chipotle (CMG) disappointed investors and analysts alike following a conference call. However, blue-chip apparel stock Nike (NKE) landed a wave of bull notes following its latest earnings victory.

Stocks to Buy and Sell in July

Next week's holiday-shortened slate will still feature plenty of action, including jobs data and the Fed minutes. With the new month rolling in, be sure to check out the best stocks to buy in July, as well as some stocks to avoid in the upcoming third quarter

 

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