Chip Stocks, Oil Prices Headline Wishy-Washy Week

Broadcom's warning weighed on semiconductor stocks

by Lillian Currens

Published on Jun 14, 2019 at 1:31 PM
Updated on Jun 14, 2019 at 2:48 PM

It was a volatile week for stocks, though the major market indexes are pacing for a second straight weekly win. Traders were bursting with optimism on Monday, with the Dow clocking its sixth consecutive win -- the longest win streak in over a year -- after President Donald Trump backpedaled on his tariff threats against Mexico. However, a struggling tech sector and a revenue warning from Apple supplier Broadcom (AVGO) ultimately took some wind out of the bulls' sails.

In addition, traders digested disappointing inflation data, which boosted expectations for a Fed rate cut this summer. While the central bank isn't expected to cut rates at next week's meeting, Wall Street will pore over comments from Fed Chair Jerome Powell. Meanwhile, oil prices also garnered notable attention. After touching a multi-month low early in the week, crude prices surged after tanker strikes in the Gulf of Oman provoked the already tumultuous relationship between the United States and Iran. 

6 Stocks That Shined on Analysts' Bull Notes

Several stocks enjoyed analysts' bullish predictions. On Monday, Analog Devices (ADI) and Redfin (RDFN) surged on big upgrades from Goldman Sachs and Stephens, respectively, while Morgan Stanley gave Walt Disney (DIS) a price-target hike, and boosted its Disney+ subscriber growth forecast. Plus, a positive earnings season prediction for the airline sector from J.P. Morgan Securities propelled American Airlines (AAL) higher. Ride-share concerns Lyft (LYFT) and Uber (UBER) got in on the action, too, with Evercore ISI initiating coverage on both stocks. 

 

Chip Stocks That Grabbed Wall Street's Attention

It was a big week for semiconductor stocks, even outside of the Broadcom warning. BofA-Merrill Lynch boosted its price target for Microsoft (MSFT) supplier Advanced Micro Devices (AMD) after a new Xbox unveiling at this year's Electronics Entertainment Expo (E3). AMD also landed on Schaeffer's Senior Quantitative Analyst Rocky White's list of the best stocks to own during Fed week. On the other side of the spectrum, LAM Research (LRCX) was hit with a downgrade from Evercore ISI, and Magnachip Semiconductor (MX) soared on guidance.

Retail Stocks Stepped Up to the Earnings Plate 

Several retail stocks were in the spotlight this week after releasing quarterly earnings reports. Chico's (CHS) and Casey's General Store (CASY) both saw a surge in their shares after stepping into the earnings confessional, while options traders came in droves ahead of Tailored Brands' (TLRD) earnings report. Elsewhere, the options market was pricing in a huge swing before Lululemon Athletica's (LULU) impressive earnings beat. 

All Eyes on The Fed Next Week 

Things are going to heat up next week, as investors turn their attention to the Federal Open Market Committee (FOMC) meeting and a press conference from Fed Chair Jerome Powell, who has been hinting at interest rate cuts. Historically, the stock market has struggled during Fed meeting weeks. Quarterly results from Kroger (KR), Adobe (ADBE), and Canopy Growth (CGC) will headline a relatively earnings-light week. Elsewhere, Wall Street will continue to monitor any trade updates ahead of the G-20 meeting in Osaka, Japan, at the end of this month, and options traders will see a rare quadruple witching next Friday. 


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