The Street woke up this morning to news that the White House is considering limiting U.S. investors’ portfolio flows into China. Though President Donald Trump has recently flirted with the idea of a trade truce, teasing Wednesday that a trade deal “could happen sooner than you think,” this kind of tension-increasing move indicates otherwise.
As the trade war remains uncertain moving forward, let’s take a look at what’s moving the stock market today and what InvestorPlace visitors are reading as we wrap up the week.
Medium Rare, Please
Beyond Meat (NYSE:BYND) stock rose yesterday on news that McDonald’s (NYSE:MCD) will be testing it in 28 of its restaurants. Josh Enomoto presents an interesting case against the stock, pointing out the fact that plant-based “meats” aren’t necessarily healthier than real beef.
“…alternative meats may be ‘safe,’ but they’re not a health food,” writes Enomoto. “Don’t get me wrong: Beyond Meat does good in that we may end up slaughtering fewer innocent animals for food. But the company doesn’t solve our addiction to processed foods. Indeed, it might worsen it, which is a longer-term negative for BYND stock.”
Beyond Meat faces a longer-term challenge given that meatless meat isn’t going to solve the American obesity problem nor American proclivity for processed foods. BYND is the Halo Top of meat, luring consumers into a false sense of security that it’s so much healthier than the real thing. Halo Top, though dramatically lower in calories per serving than Ben & Jerry’s, for example, is still ice cream. And Beyond Meat is still an ultra-processed patty.
Off-Balance Accountability at GE
General Electric (NYSE:GE) is facing accusations of accounting fraud, but Laura Hoy is shrugging it off as the company has bigger issues to worry about. Hoy points out:
“General Electric stock is bogged down by a massive debt pile worth $90 billion. On top of that, the firm’s insurance arm is struggling to support its long-term-care plans which are only getting more expensive as time goes on. Management says it will need an additional $15 billion to cover its future insurance claims, a financial goal that won’t be easy to meet.”
The bottom line on GE stock, Hoy argues, depends on whom you trust, and Hoy does not entirely trust Markopolos’ findings.
“Quite frankly the ‘accounting scandal’ uncovered by Markopolos doesn’t hold much water with me because of the surrounding details and the fact that other experts say the accounting practices used by GE are sound. However, that doesn’t make me a General Electric stock bull.”
Hoy thinks a turnaround for GE stock is highly unlikely and that investors should turn their attention better value plays that are available.
Can Canopy Make a Turnaround?
Canopy Growth (NYSE:CGC) stock seems to be back in contributor Chris Tyler’s good graces as of late. The CGC stock weekly chart indicates to him that there’s a turnaround ahead.
“Conditions could be turning around for Canopy Growth and the evidence supporting a long position is there. All that’s needed is a small bit of price confirmation next week for both buying CGC stock and keeping a lid on losses in the event a very promising bottom is nixed in the bud.”
Did Tyler speak too soon? Bank of America Merrill Lynch analyst Christopher Carey lowered his rating to Neutral from Buy and cut his price target in a note to clients this morning. CGC stock started slipping today not long after the downgrade.
That’s it for today’s commentary. Please feel free to drop us a note at editor@investorplace.com to let us know what we got right and what we got wrong. Happy investing!
