My Top 10 to Watch on Monday, May 19th
1. The S&P 500 looks set to open about 1% lower today. It’s a notable dip considering the bond market has taken a hit from stocks this morning, pushing yields up significantly.
2. Reflecting back, the S&P 500 dropped 6.66% in one day back in August 2011, following a downgrade of US debt from AAA to AA+ by Standard & Poor’s. After Fitch made a similar downgrade in August 2023, the index fell 1.38%. Now, Moody’s may follow suit with another downgrade.
3. This seems to echo the turmoil we saw when Donald Trump announced “mutual” tariffs. It feels like another attack on assets tied to the dollar, and it’s interesting— stock markets in places like Germany and Spain are doing quite well this year, seemingly unaffected.
4. Over the weekend, Trump had a bit of an outburst at Walmart after retailers hinted that prices would rise due to tariffs. He suggested that Walmart should “eat tariffs.” I, personally, think the administration might be focusing on the wrong battle when it comes to retail.
5. Nvidia recently introduced a new networking device, NVLink Fusion, at Computex, a big electronics trade show in Taiwan. It’s designed to connect Nvidia’s key AI chips with data center processors from other companies, potentially opening up new market opportunities.
6. Meanwhile, JPMorgan has downgraded Netflix from an overweight rating to neutral. Analysts feel the stock price is climbing too quickly when weighing the risks and rewards. Nonetheless, they maintain a positive long-term view on Netflix.
7. Reddit’s stock took a hit today, dropping over 6% after Wells Fargo downgraded it, citing ongoing user confusion. They’ve adjusted their price target significantly from $168 down to $115 per share.
8. Evercore ISI moved Home Depot to its “tactical outperformance list,” while Lowe’s was placed on the “tactical underperformance list.” I can’t help but wonder about the real impact of these short-term assessments, especially with earnings reports coming soon. Home Depot is set to release its numbers tomorrow; Lowe’s follows on Wednesday.
9. Another notable mention is TJX, which is expecting to announce figures ahead of the bell on Wednesday. JPMorgan has raised its price target for TJX from $127 to $130 per share while keeping an overweight rating. Still, the stock is already trading at $133, so the timing seems a bit late.
10. TD Cowen has downgraded UnitedHealth Group to hold, citing ongoing challenges for both the company and its stock price. Interestingly, there have been notable insider purchases — CEO Stephen Hemsley bought $5 million worth, and CFO John Rex followed suit with a sizable purchase too.
