A lot happened in the world of business during the week of June 14, 2019. The indexes might have been muted with less than 0.5% gains in the Dow and S&P 500, but it’s actually a market of stocks rather than the stock market. That means there can be huge movers even at times when there are no major directional moves in the economy.
24/7 Wall St. has gone back over its coverage for the week and there are 10 corporate developments which created large moves and which also need to be monitored ahead for carry-on moves. We also gave a week’s worth of analyst calls, stock picks and economics in 5 minutes.
We have added color and links to our main coverage of each bit of news if applicable. Here were our 10 top items of coverage from the week of June 14, 2019.
Amazon.com Inc. (NASDAQ: AMZN) did something rare by throwing in the towel on a fairly popular service. Grubhub Inc. (NYSE: GRUB) rallied after news came out that Amazon is killing its delivery of restaurant food to home and work. Grubhub shares closed down 3.8% at $70.16 on Friday, but this stock was under $65 before the news broke — and Grubhub was nearly a $150 stock last summer. This now eliminates the one threat that could have poured limitless cash and effort to keep competition down.
American Airlines Group Inc. (NASDAQ: AAL) was the top performing airline and transportation in the S&P 500 this stock this last week. It closed up 5.7% despite a pullback on Friday after announcing it was hiking airfares on many popular routes. Other carriers followed suit, and pricing power are coming at a time when lower fuel prices will help the bottom line. Another issue is that shares of American Airlines are still down about 25% from last October.
Beyond Meat, Inc. (NASDAQ: BYND) remains a stock bubble for sure, and the pricing action may prove it. The no-meat meat company had a closing high of $168.10 this week after hitting an intraday high of $186.43 and it closed down at $126.04 the next day after the first analyst downgrade sent a reality check. But the notion of it still being in a bubble is that Beyond Meat shares closed out the week at $151.48. All bubble talk aside, this meatless meat may change the way Americans eat (and we probably need it).
Broadcom Inc. (NASDAQ: AVGO) was given a royal flush after earnings, but more the head first kind rather than the poker kind. The stock closed down over 5.5% at $265.93 on Friday and acted as a lodestone on the rest of the chip sector after the picture from China and Huawei are weighing on its guidance. Broadcom shares were even down by almost 10% at the worst levels.
Fido and Fifi got paid this week. The IPO for Chewy, Inc. (NYSE: CHWY) was a strong debut. Its shares closed up 59% at $34.99 with a single day trading range of $32.74 to $41.45 with 69 million shares trading hands. Its opening price was actually $36.00 out of the chute, after its $22 IPO price and 46.5 million shares was above the expected price range ($19 to $21) and above the expected shares (41.6 million). Jim Cramer was also touting Chewy on Friday night, but his one warning other than hoping for a pullback is the same observation we had all along — with a private equity parent owning PetSmart (Chewy’s master) this company might not be in control of its own fate like a truly independent company.
Facebook Inc. (NASDAQ: FB) may not deserve your trust on privacy and real content, but its expected move into cryptocurrency looks like the market is already for it to unseat bitcoin even before it has been crafted based on numerous sponsors wanting a piece. After a 2.2% gain to $181.33 on Friday, Facebook closed up by almost 5% this last week.
General Electric Company (NYSE: GE) may be fingering its way through its pockets looking for some chump change. There are reports that GE wants to sell off its entire venture capital holdings of over 100 company stakes. 24/7 Wall St. was trying to look at how much this might fetch Larry Culp and his team, and we even have an idea over how it should really pursue this sale. GE shares closed down 0.8% at $10.23 on Friday, but that is up from $9.98 a week earlier.
Luckin Coffee Inc. (NASDAQ: LK) closed up 7% at $19.23 on Friday. It’s Wall Street saying “Trade War be damned!” as the analyst community gave it big upside targets. Being referred to as “the Starbucks of China” may not be accurate at all, but traders and the media might not ever let the facts get in the way of a good story.
Merck & Co. Inc. (NYSE: MRK) is underperforming the Dow in 2019, and investors will get their first investor day in 5 years on June 20. Here is what to look for on dividends, buybacks, M&A and so on. Merck shares closed up 0.5% at $82.78 on Friday, after adjusting for a 55-cent dividend, for about a 1% gain on the week.
United Technologies Corporation (NYSE: UTX) and Raytheon Company (NYSE: RTN) may be pursuing a merger of equals, but Wall Street was not so excited about the deal. United Tech closed up 0.4% at $125.30 on Friday, but this was a $132.15 stock the prior week. Raytheon closed up just 0.1% at $177.35 on Friday, but the defense contractor was a $185.91 stock the prior Friday and was up at $187.19 this last Monday after the news broke. It is common for one stock to sink on a merger or acquisition, but when both merger stocks fall handily on a week when the Dow and S&P were up marginally it’s a sign that United Technologies and Raytheon either are going to face regulatory pushback or that it’s just a bad merger.
In case you missed Friday’s Top Analyst Upgrades & Downgrades they were in shares of Apple, Broadcom, Charter, Comcast, CommScope, ConEd, Next Era, Rockwell, Transocean and many more.