U.S. equities are hovering near the unchanged line on Friday, as Wall Street reacts to the palace intrigue coming out of White House. While there is some optimism that the departure of firebrand advisor Steven Bannon could push President Trump towards a more centrist path, significant technical damage was done this week to the major averages with the Russell 2000 small-cap index falling below its 200-day moving average for the first time in more than a year.
Also, measures of market breadth continue to narrow as more stocks succumb to the downside pressure.
For most, everything seems like a normal pullback. The Dow Jones Industrial Average is around 5% above its 200-day moving average. Major stocks like Apple Inc. (NASDAQ:AAPL) are hanging tough. But below the surface, a growing cohort of individual issues are rolling over. Here are three stocks at risk:
Stocks on the Brink of Collapse: JPMorgan (JPM)
JPMorgan Chase & Co. (NYSE:JPM) shares are threatening to fall below their 50-day moving average for the first time since June. Financial stocks have been hit hard in recent days on a safe-haven bid in Treasury bonds, which has pushed down long-term interest rates and weighed on bank sector earnings expectations via lower net interest margins. Watch for a possible decline to the 200-day moving average near $86, which would be worth a near-6% decline from here.
JPM will next report results on Oct. 13 before the bell. Analysts are looking for earnings of $1.69 per share on revenues of $25.23 billion. When the company last reported on July 14, earnings of $1.82 per share beat estimates by 23 cents on a 4.6% rise in revenues.
Stocks on the Brink of Collapse: Merck (MRK)
Merck & Co., Inc. (NYSE:MRK) shares are sliding hard, dropping hard out of a seven-month trading range to test levels not seen since February. Down some 10% from their June high, watch for a possible pullback to the December 2016 low near $58, which would be worth another 5% drop from here. Drug stocks overall have been under some pressure lately on fears the Trump Administration will take action on pricing.
MRK will next report results on Oct. 27 before the bell. Analysts are looking for earnings of $1.03 per share on revenues of $10.5 billion. When the company last reported on July 28, earnings of $1.01 per share beat estimates by 14 cents on a 0.9% rise in revenues.
Stocks on the Brink of Collapse: Nike (NKE)
Nike Inc (NYSE:NKE) is trading down hard on Friday, off nearly 5% to test its 200-day moving average for the first time since June, gapping down out of a two-month trading range. The move comes in reaction to poor results at Foot Locker, Inc. (NYSE:FL), which fell 25% after reporting a big Q2 earnings and revenue miss that casts doubt on the health of the footwear business.
The company will next report results on Sept. 28 after the close. Analysts are looking for earnings of 48 cents per share on revenues of $9.1 billion. When the company last reported on June 29, earnings of 60 cents per share beat estimates by 10 cents on a 5.3% jump in revenues.