Impeachment reports are making their way into investors’ reading material, but what do they mean for equities? A look at the stock market today would suggest it’s not high up on investors’ risk list. This is particularly as hopes for a trade-war resolution rise.
After opening lower on the day, stocks reversed higher and posted strong gains on Wednesday.
The action leaves investors wondering if they should still be preparing for another rough fourth quarter or if new highs are in store for the market. Let’s look at the charts.
Sizing Up the S&P 500
A look at the S&P 500 reveals several things. First, resistance near $3,020 is still firmly in place. Second, the 50-day moving average is acting as current support, as is the $2,960 level.
With Wednesday’s recovery, the S&P 500 is reclaiming the 20-day moving average. More importantly, it’s back over the Fed-day low, with the Fed-day range highlighted via the blue box on the chart.
Action below this box has traders feeling more cautious, while above the Fed-day high brings more of a risk-on environment. Alongside the rally in stocks, the decline in bonds, gold and volatility was noteworthy as well.
If the S&P 500 can continue higher and reclaim the Fed-day highs, a retest of $3,020 resistance is likely. Below $2,960 and another test of the 50-day moving average is likely in store, with a test of August resistance near $2,940 just below that.
If the index falls below $2,940, there could be notably more downside ahead.
Movers in the Stock Market Today
Altria (NYSE:MO) and Philip Morris (NYSE:PM) were in the spotlight Wednesday when the two announced they were no longer looking to merge. PM stock jumped more than 5% on the news, while MO was down slightly, falling 0.4%.
Although Altria gave a slight bump to the midpoint of its earnings outlook, concerns continue to swirl about its big investment in Juul. The latter has come under increasing regulatory scrutiny and given that Altria has dumped billions into Juul over the years, it has created concern among investors. Juul also just announced that its CEO will step down.
Best Buy (NYSE:BBY) ended the day down 41 basis points, but was a focus in early trading after its investor meeting. Management is aiming for $50 billion in sales in fiscal 2025, while expecting $1 billion in cost cuts and efficiencies. For this fiscal year, BBY expects sales between $43.1 billion and $43.6 billion, with the midpoint about in line with expectations.
Amazon (NASDAQ:AMZN) was a big focus on Wednesday too, given its hardware announcements. Amazon announced Echo Buds, which are meant to compete with Apple’s (NASDAQ:AAPL) Air Pods and start at $129. It also announced an Echo Flex, Echo Glow and the Echo Show 8, which start at $24.99, $29.99 and $129, respectively.
The tech giant is also launching a new Echo starting at $99 and a high-end Echo Studio, which starts at $199.99. Amazon is also releasing new Ring and Eero products.
Heard on the Street
Nike (NYSE:NKE) stock traded up to new all-time highs after the company’s better-than-expected earnings and revenue results. However, analysts are looking for more gains. Since reporting earnings, Nike has received nine price targets of $100 or more, with the Street-high target sitting all the way up at $150.
Nvidia (NASDAQ:NVDA) caught a lift on Wednesday, rallying 3.3%. The move comes after analysts at Goldman Sachs upped their price target from $179 to $192. The price target takes NVDA over its recent highs near $188 and implies about 11% upside from Tuesday’s close. (Nvidia was also a Top Stock Trade candidate on Wednesday).
BlackBerry (NYSE:BB) stock has been roasted since reporting earnings, falling more than 20% on Tuesday and down another 4.1% on Wednesday. The analysts aren’t feeling good either. MKM Partners cut their target from $8.75 to $6.50, while Canaccord Genuity went from $9 to $7. Further, CIBC Capital Markets cut their target from $13 to $6.50, too.
Those who read the Top Stock Trades column may notice a few targets at $6.50 and recall how critical this level is.