Tesla’s potential go-private deal is still generating plenty of buzz.
But there are other matters worthy of attention. One market pundit believes we could be at the start of a long-term unraveling of Facebook shares.
Our call of the day comes from Paul Schatz, president of Heritage Capital, who is hanging a buyer-beware sign over Facebook FB, +0.75%
There is a “very good chance that Facebook has seen its peak for possibly many more years to come,” says Schatz, in a note to clients.
He notes that last month’s second-quarter earnings showed the impact of the backlash over privacy concerns won’t be short-lived, as this chart below shows:
Schatz predicts that in the best-case scenario, the bull market for stocks overall will ride on into 2020 and Facebook can revisit its former high above $218 before it peaks again.
“Worst case is that the market is in the early stages of revaluing the company and after this rally ends, the stock not only heads below the July low of $166, but then below the 2018 low of $149 in the next 6-12 months,” he says. That would equal to about a 20% drop from current levels—Facebook closed at $185.18 on Wednesday.
Heritage Capital
Facebook’s run to $218He adds that it will take an “awful lot” to change his opinion, given Facebook and Netflix NFLX, -1.20% are both on the defensive, means Apple, Amazon and Alphabet’s Google need to lead and keep outperforming.
“I had envisioned the FAANG stocks holding up until the bitter end of the bull market and find it hard to believe the bull market can easily live on without the group as a whole staying strong,” he adds.
Facebook is up about 7% this month, and it and other FAANG members are comfortably in the black this month as the Nasdaq train keeps rolling, which means some may not be ready to give up on the Zuck just yet.
The marketWall Street hinting at a positive session, though not by much with Dow DJIA, -0.18% S&P 500 SPX, -0.03% and Nasdaq COMP, +0.06% futures edging higher. That is after the Dow DJIA, -0.18% and S&P SPX, -0.03% finished modestly lower on Wednesday, while the Nasdaq COMP, +0.06% had yet another win.
Read: Behold, the ‘scariest chart’ for the stock market
It is all about currencies this morning, with the dollar index DXY, +0.14% up as the greenback rides roughshod over the Russian ruble USDRUB, +0.6846% again over that sanctions threat. The Turkish lira USDTRY, +2.4165% is also back under heavy pressure. Gold GCU8, +0.13% is steady, while crude CLU8, -0.03% is pulling back.
In Europe, SXXP, -0.32% stocks are struggling for traction, but in Asia, the Shanghai Composite SHCOMP, +1.83% and some other indexes powered ahead.
Bitcoin BTCUSD, +0.19% is hovering at the $6,300 mark after the cryptocurrency collapsed on Wednesday over that SEC delay to its decision on the first bitcoin exchange-traded fund.
The chartAmericans are drowning in debt, according to our chart of the day from Wolf Richter at the Wolf Street blog. The below chart shows how that total consumer debt—recent data was released earlier this week—has ramped up since 2006:
In the second quarter, he points out, the economy as measured by real GDP grew 2.8% year-over-year, and inflation as measured by CPI increased 2.7%. “In other words, American consumers, among the hardiest creatures out there, have pulled through once again, holding up the economy with borrowed money,” he writes.
The blog is loaded with scary charts and plenty of observations from Richter. Here’s another showing the ramp up of auto loans and leases since 2006:
And (shudder)—student loans:
Plus: Study shows high college costs may have made the foreclosure crisis much worse.
The buzzTesla TSLA, -2.43% is dipping some in premarket, following Wednesday’s 2.4% drop. That is amid news the Securities and Exchange Commission has been making its own inquiries about CEO Elon Musk’s Twitter going-private bombshell.
Read: Musk’s not-so-workable plan to take Tesla private while allowing outside shareholders
Rite Aid RAD, +1.16% is tanking after a surprise decision by it and fellow retailer Albertsons to scrap their $24 billion merger.
Over in Europe, Adidas ADS, +8.02% is flying high after some upbeat results driven by sales of World Cup jerseys and dad shoes.
The global-spats cup runneth over these days, with that Canada/Saudi Arabia diplomatic spat heated up again, amid reports fund managers from the Middle East nation have been told to sell off their Canadian holdings. And China hit back yesterday to the latest tariff threat from the U.S., vowing to match that threat against $16 billion of its goods. .
Chinese online grocery delivery group Dad-JD Daojia says it has raised $500 million in its latest financing round from Walmart WMT, +0.31% and JD.com JD, -1.37%
Data for Thursday includes weekly jobless claims, producer prices, and wholesale inventories. Chicago Fed President Charles Evans will speak to reporters at 1 p.m. Eastern.
The stat
Reuters
One expensive goalie71.5 million pounds ($92.06 million)—that is the record transfer fee the Chelsea soccer club paid to sign goalkeeper Kepa Arrizabalaga from Athletic Bilbao. With that, the 23-year old is now the world’s priciest goalie, according to ESPN.
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