Trade Headlines Spark Whipsaw Action in Stocks

The VIX sounded a signal seen only four other times

by Karee Venema

Published on Aug 9, 2019 at 1:57 PM
Updated on Aug 9, 2019 at 2:46 PM

It was a volatile week on Wall Street, with U.S.-China trade headlines sparking the whipsaw price action. The bulk of the action occurred to the downside, with stocks notching their worst day of the year on Monday after President Donald Trump labeled China a currency manipulator -- sparking a dramatic surge in the Cboe Volatility Index (VIX) that's been seen just four other times to date. The S&P 500 Index (SPX) and Nasdaq Composite (IXIC) managed to snap their lengthy losing streaks, but the selling resumed on Friday on reports the White House may keep its Huawei ban intact -- putting the Dow Jones Industrial Average (DJI), SPX, and IXIC on track for back-to-back weekly losses.

Big Earnings Winners

While the tit-for-tat between Washington and Beijing kept the tech sector in focus, earnings were also on Wall Street's radar. Chicken producer Tyson (TSN) kicked things off on Monday, with the stock popping on an earnings beat. Among other earnings winners were insurance name EverQuote (EVER), Oprah stock WW International (WW), and dating services name Match Group (MTCH) -- whose blowout earnings reaction resulted in a quick profit for options bulls.

The Week's Biggest Movers

Kraft Heinz (KHC), on the other hand, gapped lower after dismal update on the food producer's first-half profit. Pfizer (PFE) partner GlycoMimetics (GLYC) also made a major move lower following disappointing drug data. Other big movers included Symantec (SYMC), which jumped on M&A buzz, and Roku (ROKU), which sailed to a record high after earnings.

Time to Buy These Stocks?

Meanwhile, the broad-market sell-off may have created a handful of buying opportunities, with blue chips Visa (V) and Microsoft (MSFT), in particular, pulling back to historically bullish trendlines. Elsewhere, Morgan Stanley said it's buying the dip on Ford Motor (F), while Goldman Sachs said to target this retail stock amid the U.S.-China trade war.

Walmart Earnings, Retail Sales Headline Options Expiration Week

Next week's docket is full of plenty of potential market-moving events, including August options expiration. On the economic front, the latest U.S. trade data will hit mid-week, while an update on inflation and retail sales will also draw attention. As far as quarterly corporate updates, a handful of weed earnings will roll in alongside results from blue chips Walmart (WMT) and Cisco (CSCO).

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