The markets sold off to start the week as news was released that the tax cut in the new tax reform bill would suggest that the tax rate be gradually cut over the coming years rather than instantly. This sent the Dow 30 lower by 85, the S&P 500 lower by 8, and the Nasdaq 100 lower by 2, though earnings did also have an impact on the market performance today. Tomorrow it continues to be earnings season and that will be the main focus. Investors will also get a look at consumer confidence numbers which can be market moving.
Merck (NYSE: MRK) shares plummeted to a new yearly low today after the pharmaceutical company announced it would be repealing its application for its cancer drug, Keytruda, in Europe. This sent shares down 6.06% today and now over 14% just in the last week. The drug accounted for over $1 billion in sales for Merck in the third quarter alone and the decision seemed to have analysts surprised. This led to a slew of downgrades on the stock, and there are likely to be more in the coming days. Shares are now at their lowest level since last May.
General Motors (NYSE: GM) sold off another 2.84% today after a downgrade from Goldman Sachs. The company lowered its rating to sell and lowered their projected price target on the stock to $32. This suggests almost another 30% haircut for shares. Analyst David Tamberrino said that they expect the North American auto cycle to normalize over the next couple of years and offered a prediction of a "downward inflection in GM earnings" as part of the reason for the downgrade. Shares are still higher by over 20% since September but have sold off in the last few trading sessions.
Under Armour (NYSE: UA) was downgraded by Bank of America today but shares remained positive by 2.36%. The firm lowered its rating on the retailer to under perform and lowered its price target to $12 a share, suggesting another 20+% decline from here. Analyst Robert Ohmes cited a "challenging environment for sales of athletic footwear and apparel in North America" and also suggested that Under Armour would lower its fourth-quarter guidance. Shares have taken a hit this year and a miss on earnings could further fuel the bears wrath.