Citigroup’s Stock May Plunge 8% Further
By Michael Kramer
Citigroup Inc. (C) is off to a horrible 2018, with the stock down by nearly 12%, trailing the S&P 500’s rise of 2%. But the outlook for Citigroup may be about to get even worse, with the potential for stock dropping by another 8%, based on technical analysis.
Driving the bearish outlook for the stock is its slowing earnings growth outlook. Additionally, the bank’s valuation is still high despite the steep stock decline in 2018. A flattening yield curve may be an additional worry for investors on the horizon.
Shares of Citigroup have been trending lower since the stock peaked in mid-January. The stock attempted and failed to rise above that downtrend in the middle of May. As a result, the stock has returned to the downtrend and has recently fallen below the critical support level around $66, and a long-term uptrend which started in July of 2016. With two levels of support broken, the next level of technical support comes around $61.10, a drop of about 8% from its current price of $66.40.
Trump’s Tariffs Would Hurt Nearly Every Segment of Auto Industry: Moody’s
By Daniel Liberto
Proposed tariffs on vehicles and parts entering the U.S. will hurt every segment of the global automobile industry, according to Moody’s Investors Service.
President Donald Trump administration’s 25% tariff on Chinese goods including autos is expected to be enforced July 6. Last week, the U.S. government also threatened to introduce a 20% tariff on all imports of European Union-assembled cars.
“Tariffs would be a negative for both Ford and GM,” said Moody’s. “The burden would be greater for GM because it depends more on imports from Mexico and Canada to support US operations. In addition, a significant portion of GM’s high-margin trucks and SUVs are sourced from Mexico and Canada … Both manufacturers would need to absorb the cost of scaling back Mexican and Canadian production and moving some back to the US.”
NZDJPY Selling Attractive on Dovish RBNZ and Trade Wars
By Justin McQueen
RBNZ announced its latest monetary policy decision, in which the central bank had been had kept the Official Cash Rate at 1.75%, while also providing a more dovish report than previously, which in turn has led to a fresh wave of NZD selling. The central bank signaled yet again that the next move in rates could be up or down, as such, the highlights the fact that the RBNZ are a long way from considering raising rates with only the end of 2019 seen as a possibility.
Rising trade war tensions between the US and its major trading partners (China and EU) will not bode well for high beta currencies, such as the New Zealand Dollar, given that risk assets will be plagued by the increased uncertainty. As such, this would lead to investors flocking to safe-haven currencies, such as the JPY, which in turn offers attractiveness in selling NZDJPY.
Netflix shares jump after Bank of America gets more bullish: ‘Still more upside for the new king of all media’
By Tae Kim | @firstadopter
- Bank of America Merrill Lynch raises its price target to $460 from $352 for Netflix shares, predicting the streaming video giant will reach 360 million subscribers by 2030.
- The firm reiterates its buy rating for the stock, citing the strength of Netflix’s original content library.
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