Trump Takes on China, Europe, and the Fed

FAANG stocks Netflix and Amazon also made headlines this week

Jul 20, 2018 at 2:24 PM
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Blue-chip earnings helped determine the stock market trajectory this week, with several Dow Jones Industrial Average (DJI) members reporting. In addition, speculators weighed an earnings miss for Netflix (NFLX), and a Prime Day website crash for Amazon (AMZN). Fed Chair Jerome Powell was also in the spotlight as he made his way around Capitol Hill, predicting "several years" of strong employment and making the case for gradual rate hikes. However, President Donald Trump took the Fed to task, saying tightening "hurts all that we have done" on the economic front.

Just days after a controversial press conference with Russian leader Vladimir Putin, the commander-in-chief also threatened tariffs on essentially all imported goods from China, and accused the country and the European Union (EU) of currency manipulation. Economic advisor Larry Kudlow also accused China of not wanting to make a trade deal, though Beijing's foreign ministry spokesperson called the allegations "bogus." Nevertheless, the Dow and its index peers are set for weekly gains, with the Nasdaq Composite (IXIC) notching a record high on Tuesday, and this Cboe Volatility Index (VIX) options signal pointing to a possible volatility spike.

Blue-Chip Earnings Bombardment; M&A Win for Disney

Goldman Sachs (GS), Johnson & Johnson (JNJ), IBM Corp (IBM), American Express (AXP), and Travelers (TRV) were among the blue chips that reported earnings this week. In addition, UnitedHealth Group (UNH) stepped up to the earnings plate, with analysts at RBC calling the company's 2019 outlook "attractive." Likewise, Microsoft (MSFT) earnings closed out the week, helping to offset escalating trade tensions.

Meanwhile, squashed Amazon rumors gave Cisco Systems (CSCO) a boost, and Boeing (BA) announced a round of billion-dollar deals at the Farnborough Airshow. Fellow Dow stock Walt Disney (DIS) had a big week, too. The shares initially capitalized on a lackluster earnings showing for Netflix, and later in the week celebrated a win in its bidding war for Fox assets.

The FAANG Stock Flashing Buy; Amazon Prime Day

FAANG stocks once again remained front-and-center this week. A website crash at the onset of Amazon's highly anticipated Prime Day event couldn't keep AMZN shares down, with the stock going on a lengthy win streak. On the other hand, some of the wind was taken out of Netflix's sails after the streaming company reported lackluster subscriber growth. However, the FAANG stock's dip could be a buying opportunity, if past is prologue.

6 Commodities Stocks Presenting Trading Opportunities

Oil prices are set for another weekly loss, even with the dollar lower. However, the recent pullback could be a buy signal for Range Resources (RRC), if history is any indicator. Meanwhile, fellow energy stocks Halliburton (HAL) and Hess (HES) tend to exceed options traders' volatility expectations, and earnings are right around the corner. Elsewhere, short-term options are also cheap for this pair of steel stocks, and analysts say buy the dip on Alcoa (AA) stock after earnings. 

Analysts Eye Biotech, Social Media Stocks

While Citron Research called AbbVie (ABBV) "the next great drug short," Craig-Hallum analysts expect Champions Oncology (CSBR) stock to double. In the same vein, Euro Pacific Capital expects this fellow biotech stock to triple on the charts, and Barclays has high hopes for Cellectis (CLLS).

Canaccord Genuity weighed in on social media stock Meet Group (MEET), doubling its price target. On the flip side, sector peer Twitter (TWTR) was targeted for a relatively rare downgrade by Macquarie ahead of earnings next week.

2 Stocks to Trade Before Earnings; Plus, More FAANG Ahead

Wall Street will be anxious to get a first look at the second-quarter gross domestic product (GDP) data next Friday, especially after U.S. Treasury Secretary Steven Mnuchin recently predicted a "big ... number" on the back of Republican tax cuts.

FAANG will remain in the spotlight next week, too, with Facebook (FB), Amazon, and Google parent Alphabet (GOOGL) reporting earnings. In addition, Intel (INTC) will step up to the plate, as will rival Advanced Micro Devices (AMD). As for trade ideas, short-term options speculators may want to consider this pharma stock, while this airline stock is sending up sell signals ahead of earnings.

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