Global equities are under renewed pressure after Friday when President Donald Trump threatened to pull out of further trade talks with China due to his frustration with their apparent lack of progress in buying United States agricultural products — something Beijing allegedly promised during past meetings.
Adding to the pressure was Trump’s comments that the U.S. would not be doing business with major Chinese telecom giant Huawei.
The pullback comes at a time of technical vulnerability for the market with the Dow Jones Industrial Average struggling to stay above its 200-day moving average. A breakdown here would put the June low below 25,000 in play which would be worth a loss of 6% from here. Energy stocks are among the industry groups showing the most weakness, despite ongoing tensions in the Persian Gulf, as traders account for the hit to prices as the global economy weakens.
Here are four oil and gas stocks leading the way down:
Stocks to Sell: Chesapeake Energy (CHK)
Chesapeake Energy (NYSE:CHK) stock is focused on the exploration and development of natural gas properties in the U.S. The company runs operations in key shale gas areas including the Eagle Ford basin in Texas. However, things are not looking good for Chesapeake Energy stock. Shares of CHK stock remain below their 50-day moving average and have dropped below the low set in early 2016. This marks a loss of more than 50% from the highs set earlier this year. And, analysts at Raymond James recently downgraded shares.
The company will next report results Oct. 29 before the bell. Analysts are looking for a loss of 6 cents per share on revenues of $1.2 billion. When the company last reported Aug.6, a loss of 10 cents per share missed estimates by 7 cents on a 5.1% rise in revenues.
Shares of deepwater drilling services provider Transocean (NYSE:RIG) stock are breaking down to fresh lows, making a waterfall decline of more than two-thirds from the high set late last year, as companies pull back on high-cost deepwater exploration. Shares were recently downgraded by analysts at Citigroup, adding to the company’s woes.
RIG stock will next report results Oct. 28 after the close. Analysts are looking for a loss of 34 cents per share on revenues of $771.5 million. When the company last reported July 29, a loss of 34 cents per share matched estimates on a 4.1% decline in revenues.
Shares of oilfield services provider Halliburton (NYSE:HAL) stock are breaking down to new lows, returning to levels not seen since 2010 to mark a decline of nearly two-thirds from the highs set early last year. This drop comes despite an upgrade by Cowen analysts, reflecting what they see as profitability potential. But bottom-line growth is hard to create when the top line is being compressed by lower energy prices.
The company will next report results Oct. 21 before the bell. Analysts are looking for earnings of 37 cents per share on revenues of $5.9 billion. When the company last reported July 22, earnings of 35 cents per share beat estimates by 5 cents on a 3.5% decline in revenues.
Exxon Mobil (XOM)
Shares of Exxon Mobil (NYSE:XOM) stock are threatening to fall below their late-May lows to return to the trading range set back in December. Shares are already relegated to a range below their 50-day and 200-day moving averages since breaking down back in April. A recent upgrade from analysts at DZ Bank isn’t giving any assistance to the share price.
XOM stock will next report results Nov. 1 before the bell. Analysts are looking for earnings of 97 cents per share on revenues of $65.8 billion. When the company last reported Aug. 2, earnings of 61 cents per share missed estimates by 12 cents on a 6% decline in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.
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