Stocks slipped through the cash session on Tuesday, as a late bout of selling pressure spoiled the mood, with the weakness continuing into the overnight futures session early Wednesday morning. The Russell 2000 small-cap index broke its streak of four consecutive record closes.
The bulls looked set to carry the day again after Chinese officials said they would cut the import tariff on U.S. autos to 15% from 25% — playing into the hopes of thawing trade relations between Washington and Beijing. But late-breaking headlines from President Donald Trump spoiled the mood. Trump said a deal hadn’t been found concerning Chinese telecom ZTE (which admitted selling to North Korea and Iran) and that he wasn’t happy about how talks had progressed to date.
These three export-oriented stocks are feeling the volatility from the headline risk:
Stocks to Play for Trump’s China Talks: Boeing (BA)
Boeing Co (NYSE:BA) shares broke out of a three-month uptrend channel on Monday only to see the gains partially reversed on Tuesday as prices fell to fill the gap from the prior session. This also represents a failed test of the late-February highs unless the bulls can muster a fresh charge higher.
The stock also looks set to benefit form a WTO ruling that the European Union has failed to honor previous rulings against billions in illegal subsidies given to Airbus.
The company will next report results on July 25 before the bell. Analysts are looking for earnings of $3.44 per share on revenues of $23.8 billion. When the company last reported on April 25, earnings of $3.64 beat estimates by $1.05 on revenues of $23.4 billion, up 6.5% from the year prior.
Stocks to Play for Trump’s China Talks: Deere (DE)
Deere & Company (NYSE:DE) shares have broken up and out of a five-month downtrend, jumping back above their 200-day and 50-day moving averages to return to levels last seen in March. But a foray above $160 was reversed on Monday with another 2.1% decline suffered on Tuesday as trade hopes dimmed.
The company will next report results on Aug. 17 before the bell. Analysts are looking for earnings of $2.72 per share on revenues of $9.2 billion.
When the company last reported on May 18, earnings of $3.14 per share missed estimates by 17 cents on a 34.3% rise in revenues.
Stocks to Play for Trump’s China Talks: Caterpillar (CAT)
Caterpillar Inc. (NYSE:CAT) shares look to have set a false breakout on Monday after being pushed back below resistance near the $160-a-share threshold. This puts the stock price back into the grips of a four-month consolidation range bounded to the downside by the 200-day moving average.
The company will next report results on July 30 before the bell. Analysts are looking for earnings of $2.72 per share on revenues of $13.9 billion. When the company last reported on April 24, earnings of $2.82 per share beat estimates by 72 cents on a 30.9% rise in revenues.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
