Stock Market Today: More Boeing Drama; Pick of the Decade

Stock Market

Another day, another new high in the stock market. While geopolitical tensions are cooling, investors keep on buying. The SPDR S&P 500 ETF (NYSEARCA:SPY), the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) and the PowerShares QQQ ETF (NASDAQ:QQQ) all hit new all-time highs in the stock market today.

Of course, it helps that Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) all hit new highs on Thursday too. Remember, collectively these three stocks represent almost $3.6 trillion worth of equity.

We’re getting close to earnings season beginning — with banks like Wells Fargo (NYSE:WFC) and JPMorgan (NYSE:JPM) leading off on Tuesday — and if the market keeps on rallying, expectations are going to be set very high going these reports.

Until then, there’s plenty of other drama to focus on.

Movers in the Stock Market Today

On Wednesday, the word was that a Boeing (NYSE:BA) 737-800 crashed in Iran due to mechanical failure. Boeing stock didn’t suffer much on the news, surprisingly, but it got a jumpstart on Thursday, climbing 1.5% on the day.

That came on reports that Iran’s military most likely shot the plane down on accident. The country was retaliating against the U.S. — targeting military equipment, not personnel, apparently — and when it launched its attack, it took out the plane too.

This is according to U.S. intelligence reports on Thursday morning. While Iran pushed back, with the head of civil aviation saying it was “impossible” for that to be the case, Canadian and British intelligence drew the same conclusion as the U.S.

As of now, no one is saying that is definitively the case, but several of the world’s intelligence communities seem to believe that this is what happened. The question now is, what comes of it, if anything?

Bed Bath & Beyond (NASDAQ:BBBY) was hammered on the day, down 19.2%. The move comes after significantly worse-than-expected quarterly results. A Q3 loss of 38 cents per share was 40 cents below estimates calling for a profit of 2 cents per share. Revenue of $2.76 billion sank almost 9% year-over-year and missed expectations by $90 million.

Finally, comp-store sales declined 8.3% vs. expectations for a drop of just 4.7%. Fourth-quarter sales and profitability will remain pressured, according to management, who also pulled their full-year guidance. Ouch.

Joining in on the retail pain is Kohl’s (NYSE:KSS). Just a day after Macy’s (NYSE:M) said sales from the holidays were better than expected, Kohl’s disappointed. Shares were pummeled 6.5% after management said its November/December sales fell 0.2% year-over-year. Management now expects its full-year earnings on the low end of its prior outlook for $4.75 to $4.95 per share. Remember, that outlook was recently cut too.

Heard on the Street

Ready for the pick of the decade? Bank of America’s pick is Citigroup (NYSE:C).

The stock’s longtime valuation discount will come to an end as the bank realizes better return on equity and after management changes, the analysts say. They assigned a 2020 price target of $92 and argue that even then the bank is still being valued conservatively.

Apple stock has been on fire, and a pullback at some point would come as little surprise. But that’s not stopping the analysts from piling on. Even though it just cleared $300, Apple has garnered its second $350 price target. This one comes from Jefferies, who is bulled up on stronger-than-expected iPhone 11 sales acting as a “bridge” to the 5G iPhone.

It might be time to ring the register on Tesla (NASDAQ:TSLA) and that’s coming from a bull. From the pre-earnings close on Oct. 23 to Thursday high at $498.80, Tesla stock is up 96%. Baird analyst Ben Kallo — a longtime bull — cut the stock from outperform to neutral and suggests taking profits.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL and GOOGL.

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