U.S. equities are falling sharply on Monday amid a flurry of negative headlines and earnings results. President Trump sent indications that both U.S.-China trade talks were not progressing well (amid a worsening in Chinese economic data) and that border wall talks aren’t likely to bear fruit (setting the stage for another shutdown in February).
The result is a poor technical outlook, with the Dow Jones Industrial Average bonking on resistance from the 25,000 level and its 200-day moving average.
A break of the 50-day average just below current levels would set up a retest of the late December low. Here are five Dow components that are leading the way down:
Click to Enlarge Caterpillar shares are being crushed after reporting the biggest earnings per share miss since 2009 as the Chinese market continues to flow. Overnight, China reported that total industrial profits fell on a year-over-year basis for the second consecutive month. The company reported earnings of $2.55 per share, below expectations of $2.99 on $14.3 billion in revenue.
In its presentation, management blamed higher costs, a 26% tax rate, and restructuring headwinds for the disappointment. Shares have dropped below their 50-day moving average and look set for a test of the late December low.
Shareholders continue to contend with a long medium-term downtrend that started in January and has resulted in a total loss of more than 26%.
Click to Enlarge Pfizer (NYSE:PFE) shares are already down roughly 14% from their early December high and are threatening to fall below their 200-day moving average for the first time since last spring.
There is widespread weakness in the health care sector, as worsening partisan tensions in Washington reduce the chances of any progress on healthcare reform that broadens coverage further.
The company will next report results on Jan. 29 before the bell. Analysts are looking for earnings of 63 cents per share on revenues of nearly $14 billion.
When the company last reported on Oct. 30, earnings of 78 cents per share beat estimates by three cents on a 1% rise in revenues.
Hype continues to build for the opening of its “Star Wars” themed lands in Disneyland and Disney World later this year, as well more “Avengers” and “Star Wars” movies later this year. But shares have been unable to break free of a seven-month consolidation range on fears expectations may be too high.
The company will next report results on Feb. 5 after the close. Analysts are looking for earnings of $1.57 per share on revenues of $15.18 billion. When the company last reported on Nov. 8, earnings of $1.48 per share beat estimates by 13 cents on an 11.9% rise in revenues.
Click to Enlarge Chipmakers like Intel (NASDAQ:INTC) and Nvidia have taken a hit in recent days — despite underlying strength in the semiconductors space — as computer sales remain tepid and the lift to GPU demand from the cryptocurrency space fades fast.
Analyst downgrades have been coming in hot and heavy, with Needham cutting after the CES show in Las Vegas on a weaker macroeconomic backdrop.
The company will next report results on April 25 after the close. Analysts are looking for earnings of 87 cents per share on revenues of just over $16 billion.
When the company last reported on Jan. 24, earnings of $1.28 per share beat estimates by six cents on as 9.4% rise in revenues.
Click to Enlarge Shares of Coca-Cola (NYSE:KO) have been unable to break above their 50-day moving average despite weeks of trying to push above. The result is the formation of a dirty looking head-and-shoulders reversal pattern that sets up a move below their 200-day average to test lows not seen since last spring.
The company will next report results on Feb. 14 before the bell. Analysts are looking for earnings of 43 cents per share on revenues of $7.1 billion. When the company last reported on Oct. 30, earnings of 58 cents per share beat estimates by three cents on a 9.2% decline in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.