Investors had suffered losses in U.S. stocks for six straight sessions, a selloff that seemed to accelerate by the day. On Tuesday though, they got some reprieve. The PowerShares QQQ ETF (NASDAQ:QQQ) led the way up 1.42%, the SPDR S&P 500 ETF (NYSEARCA:SPY) rallied 1.4% and the SPDR Dow Jones ETF (NYSEARCA:DIA) climbed 1.24%. It was a solid session for the stock market today.
However, that doesn’t mean there isn’t concern. Specifically, some investors are pointing out the lag in the Russell 2000, which climbed “just” 0.95% on the day. Others point at certain parts of the yield curve which remain inverted. Almost everyone worries about what news could hit the wires overnight regarding the U.S.-China trade war.
While tensions remain escalated, that won’t stop the markets from moving forward. Let’s do some rapid-fire tidbits from Tuesday’s action.
Making News in the Stock Market Today
Goldman Sachs analysts now expect the Fed to cut rates three times in 2019. That’s not all that hard to believe, given that they’ve already cut rates once and the futures market is fully pricing in at least one 25 basis cut in September. The market is also pricing in a third cut by the October meeting, reflecting more than a 70% chance.
The market’s even pricing in a ~5% chance of five cuts by the December meeting. Unless something changes rather dramatically, expect the Fed to cut rates again.
Barneys’ rent for its Madison Square Avenue location went from $16 million to $30 million in January, essentially wiping out its EBITDA. The company filed for bankruptcy Monday evening. It’s the latest retail victim to buckle as e-commerce and omni-channel shopping wreak havoc on traditional players.
Snap (NYSE:SNAP) stock ended slightly lower Tuesday, falling about 0.6% after announcing a $1 billion convertible debt offering. Now’s a much better time to strike than when shares were in the single digits last year. Even after the latest earnings report showed solid improvements, the company is still burning through cash. However, it has more than $1.1 billion in cash and short-term investments. Is an acquisition around the corner?
Amazon (NASDAQ:AMZN) stock is snapping back Tuesday, up over 1%. The modest bounce comes despite news that founder and CEO Jeff Bezos unloaded almost $3 billion worth of stock last week. Clearly he’s not calling a peak in the stock, with shares under serious pressure lately, and it’s no secret he sells stock to fund his Blue Origin business. Still, it raised some eyebrows.
(Here’s the trade setup in AMZN, by the way).
Advanced Micro Devices (NASDAQ:AMD) jumped about 3% on the day, finally giving investors some relief. The stock is down about 20% from its high just last month. CEO Lisa Su, who’s been a total game-changer for AMD, shot down rumors she is leaving the company for International Business Machines (NYSE:IBM). Investors reaction? Phew!
Finally, Mastercard (NYSE:MA) made news for something other than being a steady and consistent winner. It’s shelling out $3.2 billion for Nets, a European payment services company. Management expects the deal to close in the first half of 2020, while the stock rallied more than 3% on the day.
More Stock Market News
Morgan Stanley analysts made waves with a pair of upgrades on Tuesday. The first was Ford (NYSE:F), which analysts bumped to overweight and assigned a $12 price target. This gave Ford stock a roughly 3% boost on the day and still implies more than 26% upside from current levels.
Analysts also boosted Northrop Grumman (NYSE:NOC) to overweight, assigning a price target of $418. From Monday’s close that implies more than 22% upside. Shares rallied over 3% in response.
Earnings Movers on the Day
Take-Two Interactive Software (NASDAQ:TTWO) registered some big gains on the day, climbing about 10% at one point. The company reported impressive earnings results, led by solid bookings thanks to its NBA 2K game. The stock is trying to rally up to resistance, but it’s important that support holds for now. Video game stocks have been extra volatile lately thanks to some political commentary.
Shake Shack (NYSE:SHAK) steadily climbed all session long, gaining more than 17%. The stock hit new 52-week highs after it beat on earnings, revenue and comp-store sales. Guidance also came in strong. Now investors want to know if its all-time high at $96.75 is possible.
Allergan (NYSE:AGN) can’t even buy momentum at this point. Even after agreeing to a buyout from AbbVie (NYSE:ABBV), the stock is still struggling to maintain its price. Shares slipped slightly lower on Tuesday too, even as earnings and revenue came in ahead of estimates and management raised guidance.
Healthcare in general struggled on the day, but Bausch Health (NYSE:BHC) didn’t make it any easier. The company missed on earnings and reported in-line revenue results. On the plus side, it did raise its outlook though. Shares still fell ~5%.