5 Blue-Chip Stocks That Will Get the Worst of the Selloff

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blue chip stocks - 5 Blue-Chip Stocks That Will Get the Worst of the Selloff

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U.S. equities are meandering beneath the unchanged line on Wednesday, shell-shocked from Tuesday’s big 1%-plus decline that was the most significant pullback for the market since October. This put an end to an incredible uptrend for the market, considering that, according to Bespoke Investment Group, 1% declines normally happen about 10% of the time historically.

5 Blue-Chip Stocks That Will Get the Worst of the Selloff

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The catalyst for the pullback included growing fears that healthcare reform supported by President Trump is hitting resistance in Congress from conservative republicans — a possible sign his agenda will be slower in coming months than Wall Street optimists had expected.

If things like tax reform and deregulation are going to stall — hopes for which drove the valuation-extending market surge of the past few months despite tepid earnings — then stocks suddenly look expensive.

No surprise then that selling pressure is popping up. Here are five large-cap stocks beginning to suffer:

Blue-Chip Stocks: Goldman Sachs (GS)

Goldman Sachs Group Inc (NYSE:GS) shares have dropped below their 50-day moving average and broken below their lower Bollinger Band on a scale not seen since August 2015 as fears over bond/loan defaults by high-cost U.S. shale oil producers — during the early stages of the energy price meltdown — were at their most acute.

Goldman, like most big bank stocks, led the overall market higher out of the pre-election lows, but are vulnerable here should Trump not make quick progress on his pro-growth agenda. Back on Jan. 18, the company reported better-than-expected top- and bottom-line results on a 12.3% jump in revenues from the year before.

The company will next report results on April 18 before the bell. Analysts are looking for earnings of $4.99 per share on revenues of $8.7 billion.

Blue-Chip Stocks: Ford (F)

Ford Motor Company (NYSE:F) shares have been crushed below their 200-day moving average, returning to levels not seen since late November and breaking out of a tight consolidation range going back to December.

The breakdown was spurred by growing concerns about the health of the automotive industry amid growing inventories, more generous incentives to consumers, and the worst decline in used car prices since the financial crisis as a flood of vehicles come off lease.

The company will next report results on April 27 before the bell. Analysts are looking for earnings of 47 cents per share on revenues of $34.6 billion.

Blue-Chip Stocks: Nike (NKE)

Nike Inc (NYSE:NKE) shares are plunging below their 200-day moving average in trading on Wednesday, down 7.3%, after reporting fiscal Q3 results featuring light guidance.

While management did beat earnings expectations, revenue growth of 5% from last year missed estimates. The profit beat was driven by a lower tax rate and marred by margin contraction.

The company will next report results on May 21. The outlook looks difficult, to say the least, with future orders down 4% globally and 9% in North America.

Blue-Chip Stocks: General Motors (GM)

General Motors Company (NYSE:GM) shares, like Ford, are being pressured by growing headwinds against the auto sector.

Shares have dropped down and out of a four-month consolidation range to hit levels last seen in November. That’s boosted the April $36 GM puts recommended to Edge Pro subscribers to a gain of 81% since they were recommended earlier this week.

The company will next report results on May 9 before the bell. Analysts are looking for earnings of $1.41 per share on revenues of $37.6 billion.

Blue-Chip Stocks: Verizon (VZ)

Verizon Communications Inc. (NYSE:VZ) shares are sliding lower after once again bonking on overhead resistance from its 200-day moving average. This puts the little two-month uptrend at risk and comes in the context of a sideways pattern going back to early 2016.

Telecoms like VZ have been hit by increased competitive pressure in the wireless space (as VZ brought back unlimited data plans). VZ in particular has been marred by doubts about its integration of Yahoo’s core assets as well.

The company will next report results on April 20 before the bell. Analysts are looking for earnings of $1 per share on revenues of $30.78 billion.

Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers. Redeem by clicking the links above.


Article printed from InvestorPlace Media, https://investorplace.com/2017/03/5-blue-chip-stocks-that-will-get-the-worst-of-the-selloff/.

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