U.S. stocks are drifting lower in mid-day trading on Friday, setting the stage for the first two-day decline since August, as investors show concern about the Federal Reserve’s increasingly aggressive policy tightening path and increasingly nasty rhetoric between President Donald Trump and North Korea.
Some company-specific news is weighing as well, with Apple Inc. (NASDAQ:AAPL) down 1.3% as I write. Apple is dropping further below its 50-day moving average on underwhelming demand for the iPhone 8, production woes with the iPhone X and LTE connectivity issues with the Series 3 Apple Watch.
On a technical basis, seasonality is a serious headwind in the second half of September. And breadth is weakening, with the percentage of NYSE issues above their 50-day moving average down to 66% from 69% earlier this week and a high of 75% in August.
As a result, I expect the selling pressure to deepen heading into next week. Here are six stocks and ETFs at risk:
U.S. Steel (X)
United States Steel Corporation (NYSE:X) shares are dropping out of a tight five-month consolidation range on Friday, falling away from their 50-day moving average.
The hit was delivered by an analyst downgrade from Cowen this morning, citing an expectation for lower prices on iron ore and rolled steel. Since X is vertically integrated, it isn’t able to take advantage of the lower iron ore costs like other steel makers.
The company will next report results on October 31 after the close. Analysts are looking for earnings of 71 cents per share on revenues of $3.1 billion. When the company last reported on July 25, earnings of $1.07 per share beat estimates by 41 cents on a 21.7% rise in revenues.
AK Steel Holding Corporation (NYSE:AKS) shares are risking a fall below their August lows, risking a decline back to levels not seen since October.
Already down more than 50% from their January high, shares are threatening to return to the trading range set last September, which would be a 20% fall from here as the Cowen note on X hits the entire sector.
The company will next report results on October 24 before the bell. Analysts are looking for earnings of five cents per share on revenues of $1.5 billion. When the company last reported on July 25, earnings of 19 cents per share beat estimates by seven cents on a 4.4% rise in revenues.
Bitcoin Investment Trust (GBTC)
Bitcoin prices have been under pressure in recent weeks as Chinese authorities crack down on the cryptocurrency.
Prices are down roughly one-quarter from their highs above $5,000 earlier this month as bubble talk grows more intense — including some very heated comments from JPMorgan (NYSE:JPM) CEO Jamie Dimon last week.
As one of the few publicly-traded vehicles for bitcoin, GBTC has been enjoying a massive premium of more than 100% over raw bitcoin prices. Which means the ETF was trading as if bitcoin was actually hitting $10,000. And that suggests the downside will be even more severe.
Kellogg Company (NYSE:K) shares are under intense selling pressure, falling below their early July lows to hit levels not seen since late 2015. This represents a decline of 25% from the high of $84 hit last summer.
Shares are suffering from the tepid performance of branded consumer products generally right now (versus the rise of store brand sales) as well as a downgrade from Piper Jaffray analysts earlier this week.
The company will next report results on Oct. 31 before the bell. Analysts are looking for earnings of 94 cents per share on revenues of $3.2 billion. When the company last reported on Aug. 3, earnings of 97 cents beat estimates by five cents on a 2.5% decline in revenues.
Lululemon Athletica inc. (NASDAQ:LULU) shares are at risk of falling down and out of a three-month consolidation range setting up a possible return to its June low — which would be worth a 17% decline from current levels. Shares are getting hit by
Shares are getting hit by negative note from Canaccord Genuity this morning highlighting the shift away from athletic apparel like yoga pants to denim.
The company will next report results on December 6 after the close. Analysts are looking for earnings of 52 cents per share on revenues of $609 million. When the company last reported on August 31, earnings of 39 cents beat estimates by four cents on a 12.9% rise in revenues.
Wal-Mart Stores Inc (NYSE:WMT) shares are rolling over near recent highs, threatening a decline below its 50-day moving average in what looks like the right shoulder of a big five-month head-and-shoulders reversal pattern.
Watch for a possible decline to the 200-day moving average, which would be worth an 8% pullback from here. Investors are balking in response to an announcement from competitor Target Corporation (NYSE:TGT) earlier this month that it was lowering prices as well as a tepid reaction to the announcement this morning of a delivery-to-your-fridge service that involves strangers coming into your home.
The company will next report results on Nov. 16 before the bell. Analysts are looking for earnings of 97 cents per share on revenues of $120.3 billion.
When the company last reported on Aug. 17, earnings of $1.08 per share beat estimates by a penny on a 2.1% rise in revenues.