 The Market Sum | Insight after the bell
By Caleb Silver, Editor in Chief Thursday's Headlines 1. U.S. Markets Sink on New Tariffs on China 2. Early Rebound Evaporates 3. Another Manufacturing Warning 4. Beyond Meat's Secondary Falls Flat 5. Celebrating the Most Influential Financial Advisors Markets Closed
 Markets Today
As the markets opened today here in the U.S., investors seemed ready to shake off yesterday's disappointment in the 'meager' interest rate cut from the Federal Reserve and start buying again. Some of that may have had something to do with a weak manufacturing report from the Institute of Supply Management released this morning. The ISM survey showed less confidence among companies due to the trade war and slowing demand from their customers. It was the fourth straight month of declines for the the ISM Index, which added fuel to the fire for further interest rate cuts this year. By noon, the DJIA had regained all of its losses from Wednesday and was on track for a 1.5% gain.
Then this happened.  The White House announced that it will be imposing an 10% tariff on $300 billion worth of Chinese goods beginning in a month. Here's how that tweet played out, in a series of charts.
Industrial Stocks The Dow Jones Industrials had a 545 point reversal as industrial stocks like Caterpillar and Deere sold off more than 2%. Apple, which was riding high from its strong earnings report on Tuesday, also fell 2%.  Retail Stocks Sticker Shock The ETF XRT, which tracks retail stocks, fell more than 3% on the news, as U.S. based retailers like Nike source a lot of their raw materials and finished products from China.  10 Year U.S. Treasury Yields Dip Yields on the 10-Year U.S. Treasury Bond, which have already been hovering near 2% over the past several months, crossed below that threshold to their lowest levels since November of 2016. We had a little election here in the U.S. in November of 2016 and many people thought the U.S. was headed for a recession given Trump's election. That didn't happen, but the fear was real.
Today's plunge reflects the concerns investors have about the impacts of more tariffs between the U.S. and China. Market watchers and economists have estimated that an extended trade war could take off as much as 0.5% of U.S. GDP. The falling yield today reflects some of those concerns.  Crude Oil Slips Crude oil futures fell 8% on the tweet as concerns about the impact of a prolonged trade war weighed on economic forecasts. Oil prices were under pressure already given yesterday's interest rate cut, but a prolonged trade battle could translate into a slowdown in manufacturing, industrial production and shipping - all of which rely heavily on petroleum based products.  Volatility Spikes No surprise here. Volatility, as measured by the VIX or Volatility Index, spiked more than 10% today. It has been a very quiet year so far in terms of market volatility, but the past two days have awoken the animal spirits, and they are hungry. The VIX measures the expectations of stock activity through options trading options as traders bet on a higher volume of market fluctuations in the coming months. When the market sells off like it did today and the road ahead looks rough, options traders will make an an increased number of what we call 'puts', or 'calls 'or bets on future direction of the stock market. That increase in volume on those trades causes the Volatility Index to spike, like it did today.  On Second Thought... Shares of the high-flying IPO Unicorn, Beyond Meat, fell 10% today, the day after the company priced its secondary stock offering at $160, six times the price of its IPO.
Read more: Beyond Meat Tumbles on Secondary Offering
Beyond Meat said it plans to sell 3.25 million additional shares of its stock, with 3 million coming from investors and 250,000 from the company. Those investors also include company executives. According to regulatory filings, CEO Ethan Brown plans to sell 39,130 shares, which could net him $8.7 million. CFO Mark Nelson is planning to sell 55,530 shares, potentially earning $12.3 million from the sale. There is nothing illegal or untoward about this...it's just time to cash in.
The company is trying to raise $40 million to expand its manufacturing to meet the robust demand for its products. It recently inked partnerships with Dunkin, Blue Apron, Tim Horton's and several other companies to sell its Beyond Burger and include its plant-based ingredients in new offerings.
Beyond Meat reported second quarter results on Monday which included a net loss of $7.4 million on sales of $67.3 million. Those sales crushed analysts forecasts, and the company said it expects to generate $240 million in revenue for the full year.
That's impressive sales growth, to be sure, but with a market valuation of $10.5 billion, there is a sense that the hype surrounding the company may be too well done.
Issuing new shares, albeit at a discount to existing shares, adds more supply to the market just as investors are digesting the company's first full earnings report since going public. Suddenly, a stock that seemed invulnerable, is showing some weakness. Here's the last month for BYND.  Celebrating Financial Advisors Today is one of the best days of the year at Investopedia. We get to celebrate those U.S. based independent financial advisors who are making the biggest impact on financial literacy, investing education and wealth management through our INVESTOPEDIA 100 awards.
Financial advisors are more important now than ever. Despite one of the longest bull markets in history, and the proliferation of financial technology designed to make managing our money easier, financial planning and investing have become more complicated than ever. With an overabundance of asset choices, confusing proprietary digital investing platforms, and the complex needs of consumers planning for their particular financial goals over longer life spans, financial advisors—the pathfinders through this financial maze—help educate us about our challenges and help us take the right steps.
We are firm believers in the benefits of financial advice and are proud to celebrate those advisors who do it best. Congratulations.
Read more: Congrats to the INVESTOPEDIA 100!
Here's the top 10. 
chart courtesy www.koyfin.com  Shares of Nektar Therapeutics increased by almost 10% today after the biopharmaceutical company, in partnership with Bristol-Myers Squibb, announced that the FDA granted a Breakthrough Therapy Designation for their new treatment for untreated melanoma. Kellogg's stock rose by over 9%, due to its latest profit report beating expectations.  Abiomed's stock suffered a heavy loss of almost 27% today as a result the medical implant manufacturer's mixed quarterly results. After Concho Resources reported mixed Q2 results, shares of the hydrocarbon exploration company fell by over 22%.  International markets weren't too pleased with the Fed's 0.25% cut yesterday, apparently. We'll see how much they like the announcement of these new tariffs tomorrow. Word of the Day Couldn't be anything but this, today. We had two of them in one day.
A reversal is a change in the price direction of an asset. A reversal can occur to the upside or downside. Following an uptrend, a reversal would be to the downside. Following a downtrend, a reversal would be to the upside. Reversals are based on overall price direction and are not typically based on one or two periods/bars on a chart. Certain indicators, such a moving average or trendlines, may help in isolating trends as well as spotting reversals.  photo courtesy MTV
Today in Financial History August 1, 1981: At one minute past midnight, a new cable TV channel begins broadcasting. It shows a non-stop diet of music videos, specializing in fast editing cuts, murky lighting, and miniature melodramas. The channel is called MTV, and it gives a huge jolt of youth potion to the faltering recorded-music business around the world.
USA Today, August 1, 2001, p. D1; http://www.mtv.com/sendme.tin
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Thursday, August 1, 2019
Evaporation
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