US OPEN: Bears continue to reign on Wall Street

4:46 PM February 28, 2020

  • US futures point to lower open at Wall Street

  • Dow Jones tests support zone at 25350 pts 

  • Big Lots (BIG.US) slumps after issuing disappointing Q1 guidance

US stock market indices are set to launch today’s cash session lower. Nasdaq and S&P 500 futures point to around 1% bearish gaps at the open. Coronavirus remains the dominant theme on the markets with more and more companies issuing profit warnings. US indices are on track to finish the week over 10% lower.

Dow Jones (US30) is set to take another hit at the opening of today’s cash session. Index futures are testing support at 25350 pts at press time. The final support for the index - lower limit of the Overbalance structure at 24000 pts - is still far away but pace of downward move is much quicker than it was at the end of 2018.  The nearest supports to watch can be found at 24800 and 24000 pts. Source: xStation5

Beyond Meat (BYND.US) reported earnings for Q4 2019. Producer of artificial meat generated revenue of $98.5 million, 212% YoY higher and 23% higher than expected. Quarter loss per share amounted to $0.01, down from $1.10 loss a year ago. EBITDA reached $9.5 million against a negative $3.8 million last year. Research and development expenses stood at $5.99 million, 80% YoY higher. The company expects 2020 net revenue to fall in the $490-510 million range while EBITDA margin should remain similar to this year’s. 2020 gross margin is expected between 33 and 35%. While generally upbeat, results failed to please investors as the stock is trading over 10% lower in premarket.

Beyond Meat (BYND.US) pulled back to the lower limit of the trading range amid ongoing market sell-off. The company is expected to open much lower following the release of earnings report. Should the stock continue to slide lower after session open, markets’ attention may shift to the price zone at $83.00. Source: xStation5

Big Lots (BIG.US), the US  retailer, also reported Q4 earnings. The company generated quarterly EPS of $2.39, smaller than expected $2.52. Sales stood at $1.607 billion and were 0.5% YoY higher. The company said it expects comparable sales to decrease by low to mid-single digit range due to supply chain disruptions caused by coronavirus outbreak. Company’s guidance hints at first quarter EPS falling in $0.30-0.45 range - much smaller than median estimate of $0.95. The company is taking a hit in premarket trade.

Dow Jones futures are pointing to 0.8% bearish gap at the open. Caterpillar (CAT.US) is taking the biggest hit as it slides more than 3%. The US construction equipment manufacturer is considered bellwether stock for global growth therefore it is not a good omen going forward. Among other big premarket losers from the Dow Jones index one can also find Apple (AAPL.US), Chevron (CVX.US) and Cisco Systems (CSCO.US).

Caterpillar (CAT.US) is a stock considered bellwether for global growth. Share price has been falling for the past two weeks and the stock is expected to take another dive today. Premarket trades hint that support zone ranging above the $118 handle can be in play today. Source: xStation5

The content of this report has been created by X-Trade Brokers Dom Maklerski S.A., with its registered office in Warsaw, at Ogrodowa 58, 00-876 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. X-Trade Brokers Dom Maklerski S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.