There were some big winners and big losers from earnings reports to cover on Thursday's PreMarket Prep Show.
Another Red Open
On Monday morning, the broad market quickly recouped its pre-market losses and the rally continued until late in Wednesday's session. In fact, before the end of the day sell-off, the S&P 500 index was in the vicinity of last Friday's close.
The hosts of the show both maintain it was a "gift" rally to investors and anyone considering hedging some risk to their portfolios should consult their financial advisor to determine if it was a prudent move for them.
With today's red open, a rally today may provide for some hedging opportunities. As of 10:00 a.m. EST, the March S&P 500 index futures have recouped some of its pre-market losses and briefly reached the lower-end of Wednesday's session.
Mister Softy Blows It Away Once Again
After the close on Wednesday, Microsoft (NASDAQ: MSFT) reported an EPS beat of 19 cents along with a sales beat of $1.23 billion. The huge beat instigated a rally from Wednesday's close ($168.04) all the way to $176.20 in after-hours trading, which is a very unusual move for such a heavily traded issue.
When the issue was being covered on the show, it was trading in the $174-$175 area. Since it was difficult to identify an entry on the long-side, the hosts identified potential resistance in the issue.
Co-host Dennis Dick, taking a cue from Apple's late day sell-off following its earnings beat, mentioned potential profit-taking in the issue. As it turns out, the issue peaked at its opening tick for the day ($174.05) and continued to make new lows for the session and $171.33 stands as the low for the session as of 10:30 a.m. EST.
UPS Does Not Deliver
United Parcel Service (NYSE: UPS) reported inline EPS, but came up shy on sales by $102 million. The Street is punishing the issue on the slight revenue miss.
Dick noted how well the issue has held up versus FedEx (NYSE: FDX) and had no interest in trying to pick a bottom in the issue. It should be noted he was not interested in buying any issue in today's session and was going to use any rally today to lighten up and hedge his portfolio.
The hosts concurred its Aug. 26 low ($112.64) was a must-hold support level, if breached could lead to much more on the downside. After a lower open, it rallied to $113.07 before violently breaching the aforementioned support falling level, falling all the way to $107.34 before mounting a comeback.
Steven Sears Is Buying The Dip
Towards the end of the show, Barron's columnist Steven Sears was our guest. He believes the coronavirus fear is just creating another "buy the dip" opportunity and is unwavering in his long-term bullish stance on the markets.
On Friday at 8:35 a.m. EST, we will get some commentary on the recent volatility from the floor of the New York Stock Exchange, when Jonathon Corpina, Senior Managing Partner at Meridian Equity Partners is our guest.