What’s more wild, the story unfolding with General Electric (NYSE:GE) or the volatility in the stock market?
Headline after headline has been wreaking havoc on the broader markets, as volatility remains elevated and as investors try to figure out their next step. Trade war worries, imploding foreign stock markets and recession concerns are engulfing the news flow.
Casual investors will at least like the news from the stock market today, where the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) rose 1.25%, the SPDR S&P 500 ETF (NYSEARCA:SPY) climbed 1.48% and the PowerShares QQQ ETF (NASDAQ:QQQ) jumped 1.61%.
Amid that calamity, the story unfolding with General Electric is even more interesting.
Is GE Stock a Sham or a Buy?
General Electric has been under pressure since it reported earnings. For months, readers here have been cognizant of $10.50 range resistance and $9 range support. The breakout never materialized and GE stock quickly sank down to support.
It was an unimpressive showing, but not surprising given the volatility in the broader market and the suspect nature of GE’s balance sheet. The most recent quarter showed that General Electric is inching its way out of trouble, but could still have some unknown risks, particularly with Boeing’s (NYSE:BA) 737 issues.
On Thursday, range support between $9 and $9.25 blew out, as reports began circulating that a whistleblower was sounding the alarm on GE’s accounting practices. That whistleblower was Harry Markopolos, who also raised concern over Bernie Madoff before his ponzi scheme was uncovered.
GE pushed back, saying it stands behind its financials and that it remains in a strong position of liquidity. GE even went as far as to say that Markopolos is being “compensated by unnamed hedge funds [that] are financially motivated to attempt to generate short selling in a company’s stock.”
It doesn’t end there, though. GE CEO Larry Culp refuted the claims even more aggressively, calling it “plain and simple” market manipulation. He then went out and bought 2 million shares of GE stock!
Analysts came out to GE’s defense on Friday morning, as did the well-known short-seller of Citron Research, Andrew Left. The latter also corroborates GE’s stance regarding hedge fund compensation, noting that, “As noted in the disclaimer on his site, Harry is being paid a % of profits from an unnamed hedge fund that is short GE. No credible hedge fund or short seller would ever do this.”
GE jumped almost 9% in response to Friday’s news, (Here’s the trade layout).
Movers in the Stock Market Today
GE was an obvious mover on the day, but it wasn’t the only one.
Nvidia (NASDAQ:NVDA) rallied 7.5% on the day, showing some upside momentum after the company beat on earnings and revenue estimates. While the headline numbers look good and many believe in its long-term future, there are still some short-term concerns. Revenue sank 17.3% year-over-year and management expects third-quarter sales of $2.84 billion to $2.96 billion. Expectations were at $2.98 billion.
Still, NVDA is on the move higher, which may be good news for bulls should the overall market start to rally too.
Deere (NYSE:DE) stock was also on the move higher, climbing over 4% despite missing on bottom-line expectations. Earnings of $2.71 per share missed analysts’ expectations by 13 cents. However, revenue of $10.04 billion handedly beat estimates by $660 million despite sinking 2.6% year-over-year.
Shares of Palo Alto Networks (NYSE:PANW) were trading well on the day, up several percent before collapsing in the afternoon. PANW ended lower by 7.2% on news that Dave Peranich, EVP of worldwide sales, is leaving his post after three years on the job. Seems like it could be an overreaction, even if he was a top sales exec.
Disney’s (NYSE:DIS) latest billion-dollar hit is Toy Story 4, the company’s fifth billion-dollar film this year. It now holds the record for most such films in a single year, while there is only one other competing film this year to top the nine-figure mark (Spider-Man: Far From Home). Further, the company announced last month that it had broken its prior annual box office record total of $7.61 billion, pulling in $7.67 billion in sales already in 2019.
Don’t forget, there’s Frozen 2 and a Star Wars film still slated for 2019. It’s going to be a huge year for Disney.