U.S. equities are being hit hard in intraday trading on Wednesday after the release of surprisingly hawkish Federal Reserve meeting minutes from the April policy meeting rattled investors.
As a result, the futures market increased the odds of a June interest rate hike from 4% to 28% as the Fed is forced to acknowledge that stable job gains and rebounding inflation will force their hand — no matter the temper tantrum being thrown by a market addicted to cheap money stimuli.
This takeaway is reinforced by recent hawkish testimony by Fed officials talking up the odds of one or even two rate hikes this year vs. the one-and-done Wall Street was looking for.
A number of stocks are getting hit hard in the fallout. Here are three to keep an eye on.
Federal Reserve Panic Sells: Boeing Co (BA)
Boeing (BA) shares have dropped back below their 200-day moving average, unable to post an upside breakout above its March high after three months of trying.
The stock has been dragged lower by indications from the airlines that profitability and margins are under pressure due, in part, to industry overcapacity. This could hit BA’s order book, especially if the global economy remains rocky.
The company will next report results on July 27 before the bell. Analysts are looking for earnings of $2.14 per share on revenues of $23.2 billion.
Federal Reserve Panic Sells: Procter & Gamble Co (PG)
Procter & Gamble (PG) shares are testing the lower end of a four-month trading range as investors worry about evidence of a pressured U.S. consumer — on a 60%-plus jump in wholesale gasoline prices — as well as reports of soon-to-launch private-label products from online retail giant Amazon.com, Inc. (AMZN).
Back in April, the company reported a 3% year-over-year decline in earnings on a 6.9% drop in revenues. Forward guidance was cautious on increased advertising spending, a higher tax rate and currency headwinds.
Watch for a drop to the 200-day moving average near $76.
Federal Reserve Panic Sells: Target Corporation (TGT)
Target (TGT) shares are down 7.7% — and is down nearly 19% from its April high — after reporting a 1.2% comp-store sales decline and a year-over-year revenue drop. Forward guidance was also cut, with earnings per share in the second quarter expected to come in between $1.00 and $1.20 per share (vs. the $1.36 analysts were expecting).
The January low was tested on an intraday basis. If it doesn’t hold, watch for a drop all the way back to late 2014 levels near $58.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
