Yahoo Finance Trump didn't exactly fuel the stock market
The market bears caught a surprise roundhouse kick to the face this week.
Despite President Donald Trump tightening the screws on Chinese officials when it comes to trade, stocks largely bounced hard from the lows hit on May 13. Credit to that partially goes to Trump — he swallowed a chill pill mid-week and refrained from dealing any more body blows to China. The administration also said it would delay auto tariffs for six months on imports from Europe.
“The bounce we saw in the middle of this week can be seen as nothing more than a normal technical bounce after the stock market became over-sold on very-short-term basis,” cautions Miller Tabak strategist Matt Maley.
Yahoo Finance columnist Rick Newman said on Yahoo Finance’s The First Trade that the trade situation remains precarious.
To Newman’s point, the market remains one Trump tweet away from tanking amid valuations that many on Wall Street acknowledge continue to be lofty. Just take a gander at the ongoing tepid action in chip stocks like Intel (INTC).
Meanwhile, a fresh round of corporate earnings from the first quarter have stunk. Companies such as Deere (DE) and Macy’s (M) warned about profit impact from the administration’s tougher stance on China tariffs.
Macy’s, for its part, hinted profit margins for its home furnishings business could be nailed. Like many others in home furnishings, most of the products are sourced from China.
While Walmart (WMT) crushed it with its first earnings report, its chief financial officer Brett Biggs said the retailer may be forced to raise prices due to the trade war. Meanwhile, Walmart CEO Doug McMillon told Yahoo Finance he is full steam ahead on autonomous delivery. McMillon added he thinks hourly wages are headed above $15.
Apple (AAPL) falling briefly into correction isn’t confidence inspiring, either. Hey, at least Uber’s stock has found a short-term bottom.
And Cisco (CSCO) scored a nice win.
Cisco Chief Financial Officer Kelly Kramer told Yahoo Finance the company has moved quickly to shift production out of China to reduce risks from the trade war. The tech giant is also open to increasing prices yet again to offset its higher supply chain costs.
“We may have to raise prices to cover the cost increase where we have it. But again, when we make the changes and when we can minimize it, we’ll roll back those price increases,” said Kramer. “But yeah, we have done some incremental price increases to offset those we haven’t mitigated yet.”The company’s latest earnings report was well received, too.
Cisco’s stock (CSCO) has rallied about 9% in five days.
Brian Sozzi is an editor-at-large and co-host of ‘The First Trade’ at Yahoo Finance. Follow Brian Sozzi him on Twitter @BrianSozzi
Read the latest financial and business news from Yahoo Finance
Apple stock could jump by as much as 530%, despite Trump's trade war on China
Uber's stock may be in reverse, some think it may have bottomed
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.
