Connect with us

MARKETFIXX

Daily Rundown

Tech Stocks Sink As Market Momentum Runs Out Of Steam

Tech Stocks Sink As Market Momentum Runs Out Of Steam

Plus, Corn futures rose to their highest level since 2013, Pfizer plans to apply for full approval for its COVID-19 vaccine in the U.S. by the end of this month, and Sotheby’s will accept Bitcoin and Ether in an upcoming art auction.

Stocks were lower at the open on Tuesday with the Dow falling by 33 points, or 0.1%. The S&P 500 slid by 0.3%, while the Nasdaq dropped 0.9%.

A selloff in some of the world’s largest tech names is dragging down stocks this morning. The S&P 500 is headed toward its worst day since mid-March, while the Nasdaq is currently down more than 2% as mega caps Apple, Tesla, and Amazon trade sharply lower. “We’ve had this spectacular run-up, and I think we’ve seen momentum just run out of steam,” said Fiona Cincotta, senior financial markets analyst at City Index. “Despite earnings being encouraging, they haven’t managed to push those indices higher. Moving out of growth and into cyclicals is the place we’re going to have more movement.”

Corn futures surged above $7 a bushel for the first time in more than eight years as a lack of rainfall in Brazil adds to supply concerns. Soybeans and wheat also rose. “Worry about the Brazilian corn crop and Brazilian dryness continues to be the driver of the corn market,” said StoneX commodity risk managers Matt Ammermann. “U.S. cash corn markets are firm, with farmers out in the fields working on sowings rather than selling their inventories.” The rally across grain markets prompted crop trader Bunge Ltd. to raise its earnings outlook for 2021 by as much as 25% above its previous forecast, betting on strong demand for crops as the world emerges from the pandemic.

Pfizer said today that it plans to file for full U.S. approval of its COVID-19 vaccine developed with BioNTech at the end of this month. If approved, the company will be able to market the shot directly to consumers. In its first quarter earnings report, Pfizer said sales of its coronavirus shot was $3.5 billion, roughly 24% of its revenue for the quarter. “Based on what we’ve seen, we believe that a durable demand for our COVID-19 vaccine—similar to that of the flu vaccines—is a likely outcome,” said CEO Albert Bourla said on an earnings call. Overall for the first quarter, Pfizer reported earnings per share of $0.93 on revenue of $14.58 billion, beating estimates for earnings of $0.77 per share on revenue of $13.51 billion. 

In other earnings news, Under Armour also delivered a beat, reporting earnings per share of $0.16 on revenue of $1.26 billion. Analysts had expected a reading of earnings per share of $0.03 on revenue of $1.13 billion. “On a two-year stack, that is skipping over 2020, we’re running a better, higher quality and more profitable business,” said CEO Patrik Frisk on an earnings call. And CVS shares are at multiyear highs after its first quarter earnings topped estimates. The pharmacy retailer posted adjusted earnings per share of $2.04 on revenue of $69.1 billion, versus analysts’ expectations for earnings of $1.72 per share on revenue of $68.39 billion. “Rising to meet the challenge of COVID-19 has advanced the transformation of the health-care industry,” said CEO Karen Lynch. “For CVS Health, the chance to serve our nation at such a critical time has further proven the value of our strategy.”

And Sotheby’s announced today that it will accept Bitcoin and Ether in an upcoming auction of Banksy’s “Love is in The Air,” marking the first time a major auction house will accept the two major cryptocurrencies as payment for a physical piece of art. “What better combination to introduce crypto than an iconic Banksy painting,” Sotheby’s CEO Charles Stewart said. “It may wall be that the winner of this painting pays in dollars and not crypto, but I think for us, creating the possibility for this is interesting. There’s clearly a large audience interested in the NFT aesthetic and possibility there. Why wouldn’t that extend to the physical art world, as well? It will be very interesting to see.” Sotheby’s move into the world of digital assets is being done through a partnership with cryptocurrency exchange Coinbase.

Stocks We’re Watching

Intrepid Potash Inc (NYSE: IPI): Intrepid Potash shares are up nearly 4% today after the company reported its first quarter results. “First quarter results benefited from strong potash and Trio® pricing and sales, leading to improvements in net income, gross margin and EBITDA compared to the prior year.” Bob Jornayvaz, Intrepid’s Executive Chairman, President, and CEO, said in the earnings release. “Under application of fertilizer in prior years and strong commodity prices continue to support fertilizer demand across our markets and we expect robust cash flow from operations will continue in the second quarter. Above-average evaporation at our potash facilities during the summer of 2020 will extend our production season into the second quarter and will allow us to meet the continued strong demand for fertilizer.”

More in Daily Rundown

Read This Next

To Top