Goldman May Decline More Despite Bullish Forecasts
By Michael J. Kramer
Goldman Sachs Group Inc.’s (GS) stock has dropped almost 16 percent off its March highs, and it’s likely to fall further despite analysts’ forecasts of a sharp rebound.
Technical analysis suggests that shares of the investment bank may fall another 5 percent. Should that happen, the stock would be effectively in a bear market, down 20 percent from its highs earlier this year.
Goldman’s stock is already trading at the same valuation of healthier peers such as Morgan Stanley, Citigroup Inc., and Bank of America Corp. Even worse, Goldman’s earnings are forecast to have the slowest growth among many big banks in 2019.
Trade the News: GBP Price Depends on Brexit, Not UK Interest Rates
By Martin Essex
Barring a major surprise, the Bank of England’s rate-setting Monetary Policy Committee will leave UK Bank Rate at 0.75% today and its asset-purchase program unchanged. Traders in GBPUSD, GBP against other currencies, the FTSE 100 and UK government bonds (Gilts) can therefore safely ignore the Bank and continue to concentrate on Brexit developments.
Looking ahead, the UK Brexit Secretary, Dominic Raab, is in Brussels tomorrow for fresh talks with Michel Barnier, the EU Chief Negotiator, after attending a Cabinet meeting today where UK ministers will discuss no-deal contingency planning.
Nonetheless, GBPUSD continues to trade above the psychologically-important 1.30 level and is clawing back some of its recent losses.
Sell Facebook (FB) Stock As It Tumbles Near Its April Lows?
By Benjamin Rains
Facebook saw its stock price fall over 2.4% again on Wednesday as the social media company continues to suffer amid user growth worries and growing concerns about government intervention. So what should investors do with Facebook stock as it sinks toward its late-March and early-April lows?
Inventors should also note that Facebook faces an even greater potential risk than fines and “fake news” concerns. Facebook reportedly saw users spend about 7% less time on Facebook’s core platform over the last year, according to Nielsen.
Facebook’s user growth in the U.S., Canada, and Europe is somewhat worrisome. Even as the company expands elsewhere, these regions accounted for approximately 72% of FB’s total Q2 revenues, but made up just 28% of total monthly active users. Plus, Facebook expects its operating margins will fall into the mid-30s on a percentage basis over the next several years as the firm spends more on security, among other thing.
Moving on, Facebook’s adjusted Q3 earnings are projected to fall by nearly 7% even as revenues jump by 34% to $13.83 billion.
FB’s earnings estimate revision activity has also trended completely downward over the last 60 days for the last two quarters of 2018, as well as for fiscal 2018 and 2019. This negative earnings revision activity helps Facebook earn a Zack Rank #4 (Sell).
Gold Prices Steady as Proposed U.S.-China Talks Give Hope
Gold prices were steady on Thursday amid news of possible U.S.-China trade talks but were held down by a stronger U.S. dollar.
The U.S. is proposing fresh trade talks with China later this month in an effort to stave off new tariffs.
U.S. President Donald Trump has threatened impose tariffs on almost all Chinese imports, or about $467 billion in goods, while China is planning to ask the WTO for permission to impose sanctions on the U.S. at a meeting next week.
Trade conflict between the U.S. and China continued to drive investors to buy the dollar, driving down the price of gold as traders feel that the U.S. has less to lose in a trade war. Gold prices have been stuck in the $1,200 range for the past two weeks as investors turn to the safe-have appeal of the greenback.
Goldman cuts Apple profit estimates after roll out of new phones
By Tae Kim
Goldman Sachs is reducing its earnings forecast for Apple due to the smartphone maker’s new lineup of iPhones.
The firm lowered its fiscal 2019 earnings per share estimate to $13.77 from $14.53 and reiterated its neutral rating for the company’s stock.
“Apple rolled out new iPhones as expected but the new LCD ‘XR’ model was priced lower than we had thought likely. This effectively obsoletes two iPhone 8/8+ SKUs in our opinion and drives us to reduce our ASP and earnings estimates, offset slightly by a higher unit forecast,” analyst Rod Hall said in a note to clients Wednesday.
Hall reaffirmed his $240 12-month price target for Apple shares, representing 9 percent upside to Wednesday’s close.
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