It was an interesting session in the stock market today, as U.S. equities were hit hard in the opening hour of Monday’s trading session.
Tech stocks were whacked and the indices took a tumble as investors feared that a trade deal between the U.S. and China may not work out. President Donald Trump hit Brazil and Argentina with tariffs, and stands by his decision that the U.S. will squeeze China harder if the trade deal doesn’t get done.
Officials are still optimistic that the phase-one portion of the deal can be signed before the end of the year. But that’s not what investors are focusing on. Instead, they’re viewing Trump’s latest round of tariffs in South America as a shot across the bow for China, reminding them to play ball or go back to battle.
In all, the SPDR S&P 500 ETF (NYSEARCA:SPY) fell 0.84%, while the PowerShares QQQ ETF (NASDAQ:QQQ) fell 1.02%. We needed the market to unwind some of its recent gains a bit, but it will be telling how stocks respond in the next few days and weeks.
Cyber Sales Go Strong
E-commerce momentum remains strong. From Nov. 1 through Dec. 1, we’ve already seen more than $72 billion in holiday shopping take place, a new record. Each day has surpassed $1 billion in sales, with 12 of those days surpassing $2 billion in sales.
All of this data comes from Adobe’s (NASDAQ:ADBE) analytics team, which notes that adverse weather likely boosted online spending this weekend as consumers opted to shop at home instead of facing the mobs in stores.
Current figures suggest online holiday shopping has grown 16.3% year-over-year so far, which is running ahead of forecasts calling for 14.1% growth this year. Current estimates are calling for sales growth of 18.9% year-over-year for Cyber Monday, which as of this morning, had logged more than $470 million in sales.
So what does all of this mean?
First, Amazon (NASDAQ:AMZN) is surely having a strong season. But it also means retailers like Walmart (NYSE:WMT), Target (NYSE:TGT) and Best Buy (NYSE:BBY) are likely enjoying strong growth in online sales too.
It also highlights the strength of the consumer and the confidence that they have to go out and spend this holiday season.
Movers in the Stock Market Today
Consumers weren’t just shopping online over the past weekend, they were also hitting the theaters. Disney’s (NYSE:DIS) Frozen 2 raked in a record Thanksgiving weekend box office result, with $124 million in sales. Globally, it hit $249 million in its second weekend at the box office, bringing its total tally up to $749 billion.
Yeah, this one is heading for the billion-dollar club. But for Disney, that’s becoming a regular occurrence. Investors will likely expect the company’s next Star Wars film to join the club too, which is due up later this month.
Roku (NASDAQ:ROKU) stock was obliterated on Monday. While stock futures were holding up okay in overnight and pre-market trading, Roku shares were down about 7% ahead of the open after a downgrade from Morgan Stanley.
Analysts cut Roku to an “underweight” rating and assigned a $110 price target. That implied about $50 per share in downside from Friday’s closing price.
7% seemed like an extreme move, but shortly after the open, it was down 10%. Then 12%. Shares were down more than 17% at Monday’s lows. Talk about a haircut. Bulls will need to see how the stock responds going forward, as its charts are pretty well-defined at this point.
Heard on the Street
Sticking with Morgan Stanley analysts for a moment, they also upgraded shares of Nike (NYSE:NKE). They bumped their base case price target to $118 from $108, while assigning a bull case price target of $138.
Splunk (NASDAQ:SPLK) was upgraded to “buy” at Goldman Sachs, as analysts assigned a $180 price target. The target implies more than 20% upside from current levels.
Finally, Apple (NASDAQ:AAPL) received more bullish commentary, this time from JPMorgan analysts. The firm pushed its price target higher by $6 to $296 as they grow optimistic for future iPhone cycles.
This also comes amid broad bullishness from investors as AirPod Pro demand looks promising this holiday season.