U.S. equities are trying to catch their breath on Tuesday after another harrowing decline, with investors suffering the worst December on record since 1931. That’s right: Not since the Great Depression “double dip,” caused by premature Federal Reserve tightening, has the holiday season treated shareholders this badly.
Yet again, it’s the Federal Reserve that’s the primary motivator for the end-of-year ugliness.
All eyes are on Wednesday’s policy decision with another rate hike likely. But more important is the forward guidance for the number of rate hikes in 2019. The market is hoping Fed chairman Powell pauses here and waits to see how the economy and financial market’s digest the rapid rise in the cost of credit. Disappointment could lead the further aggressive selling.
Already, a lot of damage has been done with the Russell 2000 already down 20% from its high, enough to qualify for a bear market. Here are seven stocks that are suffering “death crosses” and look set for further weakness.
Fastenal (FAST)
Click to Enlarge Shares of Fastenal (NASDAQ:FAST) are falling below critical support from its 50-day and 200-day moving averages and is on the verge of suffering its first death cross since the summer of 2017 as investors fear a slowdown in construction activity.
Analysts at Morgan Stanley recently initiated coverage with a neutral rating while analysts at Longbow issued a downgrade.
The company will next report results on Jan. 17 before the bell. Analysts are looking for earnings of 60 cents per share on revenues of $1.2 billion.
When the company last reported on Oct. 10, earnings of 69 cents per share beat estimates by two cents on a 13% rise in revenues.
Exxon Mobil (XOM)
Click to EnlargeShares of Exxon Mobil (NYSE:XOM) are falling away from its post-summer trading range to return to lows not seen since April.
A death cross looks likely to happen within the next few days, reversing the oil-induced rally shares enjoyed back in April through June as crude oil prices make another leg lower. Shares were recently downgraded by analysts at Raymond James.
The company will next report results on Feb. 1 before the bell. Analysts are looking for earnings of $1.23 per share on revenues of $83.3 billion.
When the company last reported on Nov. 2 earnings of $1.46 beat estimates by 24 cents per share on a 25.4% rise in revenues.
Qualcomm (QCOM)
Click to Enlarge Qualcomm (NASDAQ:QCOM) shares are relegated to a tight trading range below its 50-day and 200-day moving averages, setting the stage for a death cross as the rally into the September highs is reversed.
Shareholders have already suffered a 23% loss. Qualcomm has been in the news for its patent royalty fight with Apple (NASDAQ:AAPL) and has appealed to Chinese authorities to stop the sale of the latest iPhone models.
The company will next report results on Feb. 6 after the close. Analysts are looking for earnings of $1.09 per share on revenues of $4.9 billion. When the company last reported on Nov. 7, earnings of 90 cents per share beat estimates by six cents on a 2.1% decline in revenues.
Amazon (AMZN)
Click to EnlargeEveryone’s onetime momentum favorite, Amazon (NASDAQ:AMZN) shares were turned away from resistance near the 50-day and 200-day moving averages and are now threatening to fall below its post-October lows.
Such a move would set up a test of the April low, worth another 13% decline from here. Amazon continues to focus on expanding its physical store footprint, and Amazon plans to roll out smaller versions of its Amazon Go cashier-less stores.
The company will next report results on Jan. 31 after the close. Analysts are looking for earnings of $5.51 per share on revenues of $71.9 billion. When the company last reported on Oct. 25, earnings of $5.75 beat estimates by $2.66 on a 29.3% rise in revenues.
United Technologies (UTX)
Click to EnlargePlans to break United Technologies (NYSE:UTX) up into smaller companies has failed to generate much investor interest, pushing shares down nearly 20% from the highs seen in September and threatening a fall below its early May low. Such a move would set up a move back to the summer 2017 lows near $106 — which would be worth a decline of 9% from here.
The company will next report results on Jan. 23 before the bell. Analysts are looking for earnings of $1.51 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% rise in revenue.
Lowe’s Companies (LOW)
Batted by worries about the housing market and announced store closures, shares of Lowe’s (NYSE:LOW) remain below both their 50-day and 200-day moving averages.
Already down nearly 22% from their late September high, shareholders are on the verge of suffering their first death cross in the stock since the summer of 2017.
The company will next report results on Feb. 27 before the bell. Analysts are looking for earnings of 80 cents per share on revenues of $15.8 billion.
When the company last reported on Nov. 20 earnings of $1.04 beat estimates by six cents on a 3.8% rise in revenues.
Expedia (EXPE)
Click to EnlargeOnline travel booking icon Expedia (NASDAQ:EXPE) is suffering a rapid reversal of its summertime gains, down more than 14% from the highs seen in late July.
This looks to be part of an epic, multi-year head-and-shoulders reversal pattern that could trace a decline all the way down to the 2013 lows near $45 as competition in the online travel space remains intense and fierce as spending is vulnerable to an economic slowdown and consumer retrenchment.
The company will next report results on Feb. 7 after the close. Analysts are looking for earnings of $1.07 per share on revenues of $2.6 billion.
When the company last reported on Oct. 25, earnings of $3.65 beat estimates by 53 cents on a 10.5% rise in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.
