The markets were mixed today on a handful of news that split the major indices. The Dow 30 closed lower by 78 thanks in part to Walgreens lowering their outlook for the year. The S&P 500 was essentially flat on the day and the Nasdaq closed higher by 20 - less than 3% from hitting all-time highs.
Sector News
Oil (USO ) has been a big mover this week, breaking back above the 200-day moving average for the first time since October of last year. Confirmation of the continued production cuts and overall output from OPEC have been the major tailwind for crude, which is now higher by over 34% this year alone.
Oil explorers (XOP ) and Oil service (OIH ) have been slowly waking up to the strength in crude with a move back towards the high end of their recent ranges. For the year these two areas haven't really budged out of a sideways range. The recent higher low set back in March has many technical traders thinking that was the first hint at a breakout from this range.
Regional Banks (KRE ) have now recovered about half of their "Fed decline" two weeks ago when the Federal Reserve made their announcement of no rate hikes in 2019. The regional banks took it the hardest with a 12% decline on that news. Technical traders note the recovery has brought the regionals back to their downtrending 20-period moving average, which may act as short-term resistance.
Stock News
Lyft (LYFT ) shares tried to recover from their initial selloff today but felt the pressure of Wall Street analysts as Seaport initiated coverage with a sell rating and a $42 price target. The analyst said that investing in this company and their belief that the next generation will skip car ownership and use ride sharing is a "big leap of faith."
Walgreens Boots Alliance (WBA ) held back the Dow 30 today as shares sold off double digits. The company reported earnings that came in 8 cents lower than expected, along with a miss on revenue and a lowered outlook for the year. The company commented that challenges for them have "accelerated."
Wells Fargo (WFC ) shares were under pressure today following a credit rating outlook cut by Standard and Poor to "negative" from "stable." The credit rating agency cited the departure of the CEO last week as the main reason for the bank's uncertain future and thus the cut.
Slack has reportedly chosen to go direct to investors by listing directly with the New York Stock Exchange. This controversial approach allows a new offering to be directly offered to investors, bypassing the underwriters. More importantly, it allows the existing shareholders to avoid the lockup period on selling their shares. Spotify (NASDAQ SPOT) was the last big name to go this route.
