Wall Street's Top Stories For Friday, June 14, 2019

Stocks slip as Broadcom cites trade fight for lower forecast

A slide in the chipmaking sector weighed on the Nasdaq after Broadcom (AVGO) cut its sales forecast, citing trade war concerns, though the S&P recouped nearly all its losses in afternoon trading, closing out with small loss on a daily basis but a roughly 0.5% weekly gain.

ECONOMIC EVENTS: In the U.S., the retail sales report beat estimates via revisions, with expected May gains of 0.5% both with and without autos. The industrial production report beat estimates with a surprising 0.4% May rise after offsetting revisions over the prior three months. Business inventories rose 0.5% in April, while sales fell 0.2%, as expected. The University of Michigan consumer sentiment reading eased back 2.1 ticks to 97.9 in the preliminary reading for June, giving back some of the 2.8 point bounce to 100.0 in May. In energy news, Baker Hughes reported that the U.S. rig count is down 6 rigs from last week to 969.

In China, data was mixed. Retail sales for May rose 8.6% year-over-year, which was up from April and better than the consensus growth forecast. However, industrial production growth fell short with a rise of 5% that missed consensus.

TOP NEWS: Shares of Broadcom fell 6% after the company reported lower than expected revenue for the second quarter and lowered its revenue guidance for fiscal 2019. Of note, Broadcom CEO Hock Tan said that the company anticipates a "broad-based slowdown in the demand environment."

Sony (SNE) shares were 3% higher in New York after activist investor Third Point confirmed a $1.5B investment in the Japanese conglomerate, saying in a letter to shareholders that Sony's valuation "does not reflect either the quality of the Company's businesses or the opportunity to create meaningful, long-term value through targeted capital allocation and further operational improvement." In the letter, the firm said that Sony should consider a spin-off of its semiconductors business into a standalone public stock to be listed in Japan and suggested that it consider positioning itself as a "leading global entertainment company."

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