S&P 500 headed toward its third-down week in a row. The bears are in complete control. Every small rally in stock is aggressively sold into. Federal Reserve chair Jerome Powell has now set the stage for 50 bps rate hikes in the next few meetings and the market is worried that aggressive rate hikes might trigger a full-scale economic recession. Hawkish Central Banks and rising US bond yield is scaring everyone. S&P 500 after a brutal sell-off yesterday is down another 1.24% today.
Verizon: Road to nowhere
Can a stock do nothing for years? Yes absolutely. Look at the Verizon stock chart
It has been 4 years and the stock is stuck in a band of 12 points (50 as support and 62 as resistance). The stock offers a dividend yield of 4.65% at the current market price. So, anybody who bought the stock between 50-52 levels made some dividend but no capital gains for 4 years.
Verizon today came out with a disappointing earnings outlook and the stock is down 5% today. Verizon lost 36,000 postpaid wireless phone subscribers during the last quarter. One is better off staying away from this stock. AT&T looks like a better play. AT&T added 691,000 net postpaid phone customers and added 113,000 prepaid phone customers.
Stock Specific Follow up
- The Twitter deal is happening. The stock today is up 4% and at $49
- When a stock breaks down, the downside movement happens quite fast. I warned when AMD broke down on April 11. AMD is now at $89.
- Steel stocks continue to post strong earnings. CLF does not disappoint. The stock is up today
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers
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