Stocks Deflate Amid Trade Fears

Social media stocks SNAP and TWTR took two very different earnings paths

by Andrea Kramer

Published on Feb 8, 2019 at 12:55 PM

The first full week of February started on a high note, though volume was initially light as traders recovered from the most boring Super Bowl ever (don't @ us, Pats fans). However, after two straight triple-digit gains, the Dow Jones Industrial Average (DJI) spent the latter half of the week in the red, amid renewed concerns about the global economy and a U.S.-China trade deal -- or lack thereof -- before the March 1 deadline. In addition, the State of the Union address did little to assuage fears about another government shutdown. As such, the major market indexes are set to end the week in the red, after enjoying their best six-week winning streaks since the March 2009 bottom.

Google Wraps Up FAANG Earnings

After last week's FAANG earnings onslaught, Google parent Alphabet (GOOGL) stepped into the earnings confessional late Monday. The internet issue is pacing for its worst week of 2019, amid growing concerns about rising costs. Meanwhile, founder and CEO Bernie Schaeffer is keeping an eye on this FANG-loaded exchange-traded fund (ETF), which has historically been the best ETF to own in February.

More Earnings Winners and Losers

Walt Disney (DIS) stock initially moved higher after earnings, but ultimately finished in the day and the week in the red -- to the delight of recent DIS option buyers. In the social media stratosphere, Snapchat parent Snap (SNAP) skyrocketed after a big earnings beat, while rival Twitter (TWTR) got destroyed, disappointing recent call buyers. Meanwhile, Chipotle (CMG) stock soared to a three-year high after earnings, but analysts aren't expecting the same fate for fellow restaurant concern Bloomin' Brands (BLMN) next week, with BofA-Merrill Lynch downgrading BLMN to "underperform."

4 Biotech Stocks Making Noise

Outside of the earnings confessional, several biotechs made headlines. Amarys (AMRS) rocketed higher after announcing a big weed deal, and analysts think this biopharma stock could triple on a Food and Drug Administration (FDA) nod. Gene-editing stocks took a hit after disappointing data from Sangamo Therapeutics (SGMO), and Corcept Therapeutics (CORT) issued a "white paper" to respond to "offensive nonsense" from high-profile short sellers.

3 Stocks Flashing Bearish Signals

While an overbought S&P 500 Index (SPX) tends to be a short-term buy signal, per Schaeffer's Senior Quantitative Analyst Rocky White, several stocks flashed bearish signals recently. Of note, Wells Fargo (WFC) could be a short play -- and WFC's near-term options are attractively priced, to boot. Meanwhile, this transport stock could sink soon, if past is prologue, and it might be time to jump ship on this cruise concern.

Cisco Earnings, Possible Government Shutdown Ahead

Along with blue chip Cisco Systems (CSCO), Activision Blizzard (ATVI) is among the companies expected to report earnings next week, and ATVI bulls hope the stock fares better than these video game peers. Outside of Wall Street, traders will keep an eye on Washington, D.C., in the hopes that Congress can agree on a budget deal and avoid another government shutdown on Friday, Feb. 15.


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