So ... Much ... News
It's hard not to agree with this statement Thursday from Jefferies analysts: "Presently there is plenty to distract investor attention." From the Facebook (FB) data debacle to markets plunging when Federal Reserve Chairman Jerome Powell spoke (the hot new trend), it's very easy for investors to feel overwhelmed right now. Do you buy Twitter's (TWTR) stock 12% off its all-time high reached earlier this month because it's clearly not Facebook? Do you load up on global industrial giants such as Boeing (BA) with the dollar at a one-month low, even though tariff king Donald Trump is on the attack (new Trump tariffs on China expected to be revealed at 12:30 p.m. ET Thursday)? Do you go all-in on the Dropbox IPO Friday in the hopes it's another MuleSoft (MULE) (which was sold to Salesforce (CRM) this week). Lots of relevant things to consider as an investor, all attention-diverting as Jefferies rightly said. The chief focus for investors, at least for the rest of the week, should be the actions from the Federal Reserve on Wednesday. The answer why is simple: fears of the Fed have been the single-biggest market driver of 2018. Just see the February correction and the lead-up (and aftermath) of the Fed's meeting on Wednesday. The blunt truth shaping up is that the Powell Fed will be vastly different than the Bernanke and Yellen Fed. Powell is tasked with cleaning up their financial messes, and that's a different environment for stocks than what many investors signed up for when they bought Action Alerts Plus holding Amazon (AMZN) and Netflix (NFLX) two years ago. Lighten the load here folks, it's going to be a bumpy end to the month ... and possibly into April.
Did Zuck Do Enough?
Mixed emotions on this one. Facebook CEO Mark Zuckerberg clearly isn't a fan of interviews. On the one hand, he did come off as genuine though. The red circles under his eyes hinted this data scandal has cost him some sleep (a good thing - shows he is engaged and trying to right the ship). After all, how he addresses this crisis directly influences how he can change the world via his philanthropic ambitions. Facebook and those do-gooder efforts are intertwined. In effect, Zuck is fighting for his legacy. That said, if you are an institutional investor you can't be happy with Zuck's performance on TV. While he has those red circles under his eyes, he oddly seems detached from the inner workings of Action Alerts Plus holding Facebook. Further, Zuck isn't sure how to tame the beast that Facebook has become. As a result, you can't help but wonder whether Facebook 20 years from now is nothing more than a modern day utility company (heavy regulation, slow-to-no growth, fat dividend yield). Facebook's stock is likely to see accelerated selling as institutional investors start dumping right along with the retail investors that have already begun selling. Until Zuck outlines clearer action plans and shows that advertisers and users aren't fleeing the platform after the Cambridge Analytica disaster, the stock will remain pressured. Who is looking silly now for laying out a case for Facebook's stock to dive 50%? It's already down 11% since Monday.
As if you needed more distractions, here are several other tidbits. (1) There have been 34 IPOs priced so far this year through Monday, up 47.8% from this time a year ago, according to Renaissance Capital. (2) Even Apple's (AAPL) stock has gotten swept into the Facebook-related selling: It's down 4% the last five sessions -- hey, Apple does have a ton of your data, too. (3) Darden (DRI) gave investors a nice snapshot into the health of the consumer on Thursday, saying Olive Garden same-store sales rose 2.2% in the most recent quarter. Traffic to the value brand was so-so, but that may be a function of people waiting for their tax refunds before they go out to eat.
What TheStreet's Newsroom Thought About Fed Day
Wednesday was quite the day for markets as Jerome Powell strode to the stage. Watch what captured the attention of TheStreet.