The Dow Jones Industrial Average is the odd one out on Wednesday. Investors saw the S&P 500 and Nasdaq Composite burst to new record highs in the stock market today, as buyers continue to show no fear of a correction.
As the market barrels higher, many investors will even tell you that they’d prefer a break at this point. And that’s coming from the bulls. Pauses and corrections are healthy for the market. It gives it time to rest and gives investors a chance to add to their holdings.
While we’re certainly not in a runaway rally like 1999 to 2000, the way the market continues to ignore the eventual economic impact of the coronavirus from China isn’t lost on investors. We know it’s coming, and Apple (NASDAQ:AAPL) confirmed as much just the other day by issuing a revenue warning.
In any regard, helping to fuel Wednesday’s rally was the energy space. The Energy Select Sector SPDR ETF (NYSEARCA:XLE) pushed impressively higher on the day, with oil prices rallying nicely in the stock market today as well. One of the hardest hit sectors as of late, it’s good to see a rebound in the space.
Movers in the Stock Market Today
General Electric (NYSE:GE) started off higher, but finished lower in the stock market today. That’s despite CEO Larry Culp sticking with his goal of improving free cash flow (FCF). The company could see a $2 billion FCF deficit in the first quarter because of the Boeing (NYSE:BA) 737 Max issues, but a “snap back” in the second half of the year could result in full-year FCF of up to $4 billion. Still, investors are hesitant as things likely look to get worse before potentially getting better.
Further, General Electric is now looking to mitigate the damage from Boeing. The company is in talks with Airbus (OTCMKTS:EADSY), Boeing’s largest competitor, to work together on engine variants for the A330neo. GE already works with Airbus on smaller engines, but is looking to increase its business with the company as the 737 Max issues continue to drag on.
Speaking of Boeing’s 737 Max, the company found debris — which is described as rags, tools, etc. — in the fuel tanks of undelivered jets. At this point, it just seems like the whole thing is an embarrassment, as Boeing now goes through an inspection of the jets to make sure they are clean and debris-free. Management still expects the 737 Max to return in mid-2020.
Nike (NYSE:NKE) announced a C-suite shake-up, sending shares higher by about 0.5% in the stock market today. CFO Andy Campion will become COO on April 1, as current COO Eric Sprunk retires. Matthew Friend, the current CFO of operating segments and the vice president of investor relations, will step in as Nike’s CFO.
Casino stocks like Wynn Resorts (NASDAQ:WYNN), Las Vegas Sands (NYSE:LVS) and MGM Resorts (NYSE:MGM) have all traded pretty well, considering that Macau shut down for 15 days due to the coronavirus. The gambling hub will reopen 29 of its 39 active casinos at midnight, but on a limited basis. They plan to open roughly 1,800 of the 6,754 gaming tables.
Elsewhere in China, Costco Wholesale (NASDAQ:COST) plans to open a second store in the country. The company’s first warehouse in Shanghai has reportedly topped 200,000 members and receives roughly 16,000 visitors a day. The second store is also being planned in Shanghai.
Heard on the Street
Uber (NYSE:UBER) was upgraded from a “buy” rating to a “strong buy” rating at CFRA Research. The firm also assigned a $48 price target, which suggests about 17% upside after Wednesday’s rally. Still, CFRA’s price target is well below several others on the Street, which climb as high as $60 per share.
The market is loving Nvidia (NASDAQ:NVDA) right now. Bulls saw a rally of 6.1% in the stock market today, as shares continue to gain after last week’s earnings report.
On Wednesday alone, Nvidia received price targets of $340 and $360 from Argus and Bernstein, respectively. Since reporting earnings on Feb. 13, Nvidia has received at least 18 price targets of $300 or higher.
Tesla (NASDAQ:TSLA) was one of our Top Stock Trades Wednesday as it approaches its prior record highs. The latest rally comes as Piper Sandler analysts increased their price target from $729 up to $928 per share. While bullish on the auto business, the analysts are seeing potential in the energy business as well.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long NVDA and AAPL.
