U.S. equities were crushed lower on Tuesday ahead of the market closure in honor of President George H. W. Bush. Trade tensions were again to blame, with President Donald Trump warning that more tariffs would be coming unless the Chinese agreed to his terms. The result was a severe, near-800 point decline in the Dow Jones Industrial Average that took the average back below its 200-day moving average. People were seeing stocks to sell everywhere.
More ominous was the setting of a pattern of lower highs since peaking in early October. A violation of the critical lows near 24,250 would set up a test of the 23,500 support set earlier this year. A breakdown from here could well result in a reversal of much of the 2017 Trump election rally.
If not something even worse.
Evidence of late-cycle dynamics abound, from falling earnings growth projections to an ultra-tight labor market to tightening monetary policy. This isn’t an environment friendly to stock prices. And indeed, a growing list of large-caps are suffering to the downside. Here are 10 stocks to sell that are melting down:
Apple (AAPL)
Shares of Apple (NASDAQ:AAPL) stock are in rough shape as the bloom comes off of its iPhone business. How bad is it? Management no longer wants to talk about unit volumes but sector sales instead, an admittance it’s trying to boost prices to offset faltering sales. The problem? It isn’t working, with the company touting higher trade-in allowances on older models as it’s forced to adopt a promotional strategy.
The company will next report results on Jan. 29 after the close. Analysts are looking for earnings of $4.72 per share on revenues of $91.8 billion. When the company last reported on Nov. 1 earnings of $2.91 per share beat estimates by 13 cents on a 19.6% rise in revenues.
Alphabet (GOOG, GOOGL)
Shares of Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock, parent of Google, are moving lower after bonking into overhead resistance from its 200-day moving average. The company has suffered a roughly 17% decline in its share price amid increasing downside momentum for the “FAANGs” that seemed oh-so-bulletproof just a few months ago.
The company will next report results on Jan. 31 after the close. Analysts expect earnings of $10.86 on $39 billion in revenue. When the company last reported on Oct. 25, earnings of $13.06 beat estimates by $2.65 per share on a 21.5% rise in revenues.
Facebook (FB)
Facebook (NASDAQ:FB) shares have been among the worst hurt of the FAANGs, down some 37% from their July high as shareholders flee tepid user growth, ongoing privacy concerns, and now indications of possible division and acrimony at the highest level of management. The result is a return to early 2017 lows.
The company will next report results on Jan. 30 after the close. Analysts are looking for earnings of $2.19 cents per share on revenues of $16.4 billion. When the company last reported on Oct. 30, earnings of $1.76 beat estimates by 29 cents per share on 32.9% rise in revenues.
Netflix (NFLX)
Already down more than 30% from the double-top high set over the summer, the shares of Netflix (NASDAQ:NFLX) have fallen back below their 50-week moving average for the first teams since 2016 as investors wonder aloud whether the company’s cash burn rate and rising production costs are sustainable. Especially with new competition coming from the likes of Apple and Disney (NYSE:DIS), Netflix could be a stock to sell.
The company will next report results on Jan. 22 after the close. Analysts are looking for earnings of 24 cents per share on revenues of $4.2 billion. When the company last reported on Oct. 16 earnings of 89 cents per share beat estimates by 21 cents on a 34% rise in revenues.
United Technologies (UTX)
Despite announcing it would split the company into three separate entities, United Technologies (NYSE:UTX) management has been unable to stem the share price decline with the stock threatening to fall below critical three-month support near the $120-a-share level to return to its May lows — which would be worth a loss of more than 4% from here. It could make this a prime stock to sell.
The company will next report results on Jan. 22 before the bell. Analysts are looking for earnings of $1.52 per share on revenues of $16.8 billion. When the company last reported on Oct. 23, earnings of $1.93 beat estimates by 11 cents on a 9.6%.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) shareholders enjoyed a wild rise for years, fueled by a combination of cryptocurrency mania (its GPUs are used in mining rigs), connections to trends like AI and autonomous driving, and intense price momentum. But they’re learning now that momentum works in reverse as well, with shares falling roughly 50% from the high set in late October. Bitcoin is imploding and demand for its GPUs is slowing.
The company will next report results on Feb. 7 after the close. Analysts are looking for earnings of $1.40 per share on revenues of $2.7 billion. When the company last reported on Nov. 15, earnings of $1.84 beat missed estimates by 13 cents on a 20.7% rise in revenues.
UPS (UPS)
Transportation stocks like UPS (NYSE:UPS) are on the front lines of the economy and are vulnerable to a pullback in economic activity, which is being widely penciled in for 2019. Analysts at Morgan Stanley recently issued cautious commentary on the company given increasing competition from Amazon (NASDAQ:AMZN) and its Amazon Air division. They are looking for a Street-low price target of just $87.
The company will next report results on Jan. 31 before the bell. Analysts are looking for earnings of $1.93 per share on revenues of $20.1 billion. When the company last reported on Oct. 24, earnings of $1.82 matched estimates on a 7.9% rise in revenues.
Schlumberger (SLB)
Shares of Schlumberger (NYSE:SLB) have been crushed along with the rest of the energy sector, down a whopping 40% from the highs set in May. This returns prices to lows not seen since 2010 and caps a decline of nearly 60% from the energy heydays of 2014. Not even an ill-timed upgrade from HSBC Securities analysts in late November has been enough to turn things around for the stock.
The company will next report results on Jan. 18 before the bell. Analysts are looking for earnings of 42 cents per share on revenues of $8.4 billion. When the company last reported on Oct. 19, earnings of 46 cents per share beat estimates by a penny on a 7.6% rise in revenues.
TJX (TJX)
Shares of TJX Companies (NYSE:TJX) have fallen back below their 200-day moving average and are threatening to move below critical support from the trading range seen during the summer. Watch for a fall all the way back to the springtime trading range which would mark a 15% decline from here. Analysts at Telsey Advisory Group recently downgraded their forecasts on headwinds from new lease accounting rules, suggesting this is a stock to sell.
The company will next report results on Feb. 27 before the bell. Analysts are looking for earnings of 68 cents per share on revenues of $10.9 billion. When the company last reported on Nov. 20, earnings of 61 cents per share met estimates on a 12.1% rise in revenues.
General Electric (GE)
The pain isn’t yet over for General Electric (NYSE:GE) shares, which are falling out of their two-month trading range to return to levels not seen since early 2009 — capping a loss of more than 76% from the high set in the summer of 2016. Investors continue to lose what little faith they had left in management’s ongoing turnaround plans. Headwinds will be made worse by any further breakdown in U.S.-China trade relations.
The company will next report results on Jan. 24 before the bell. Analysts are looking for earnings of 22 cents per share on revenues of $32.1 billion. When the company last reported on Oct. 30, earnings of 14 cents per share missed estimates by six cents on a 3.6% decline in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.
