The market yawned at the Trump/Putin meeting debacle on Monday, and Trump’s walk-back on Tuesday. Why? U.S. investors largely have no clue how to play the news story. Dare I say they don’t really care unless a meeting of that kind sends the Dow Jones Industrial Average down 500 points intraday, causing one to quickly make changes to the portfolio (or at least consider them)?
What DO U.S. investors care about? Tech stocks, tech stocks, tech stocks, TECH STOCKS. Bank of America nicely captures their obsession in new data: “Long FAANG+BAT” (53%) remains the most crowded trade identified by investors for the sixth straight month and most crowded trade outright since “Long USD” in January 2017.”
To that end, the sharp midday reversal in Netflix (NFLX) post earnings on Tuesday was interesting if not short-term bullish. It showed that Wall Street may still have the power to juice up buy ratings if tech stocks are hit this earnings season. Wall Street was staunch in its defense of Netflix, and is likely prepared to defend Facebook (FB) , Amazon and Alphabet (GOOGL) if forced.
Complete Randomness:
(1) Starbucks (SBUX) can’t catch a break right now. The coffee giant’s long-time stronghold on the bottled coffee industry is under siege, or so it appears. Wells Fargo beverage analyst Bonnie Herzog said Coca-Cola’s (KO) ready-to-drink coffee business, which distributes new offerings from Dunkin’ Brands (DNKN) and McDonald’s (MCD) , is cutting into sales of Starbucks (distributed by PepsiCo (PEP) ). The ready-to-drink coffee business is seen growing at a compound annual growth rate of 5.6% to $116 billion by 2024, according to Grand View Research.
(2) Target’s (TGT) Amazon (AMZN) Prime Day worked out well. “Hot offers drove the highest single day of traffic and sales of 2018,” Target said in a statement. The Instant Pot was a top-seller for Target, ditto for Amazon.
(3) Only Texas Instruments (TXN) insiders know why now former CEO Brian Crutcher resigned suddenly on Tuesday. He was only in the top job for two months, but allegedly violated the company’s code of conduct. But here’s a stunning (and sad) stat from Temin & Co.: “At least 437 high-profile executives and employees have been accused of harassment or misconduct over the last 18 months.”
