In the Shadow of the Death Cross: Stocks Teetering on the Edge of Bearish Terrain
A select few stocks are currently traversing or on the brink of entering the concerning territory known as the 'death cross.' This ominous pattern materializes when a stock's 50-day moving average descends below its 200-day moving average, signaling investor pessimism or a weakening momentum that could precipitate further declines. Additionally, a death cross often portends the emergence of a bear market pattern.
According to a CNBC Pro analysis, three prominent entities, including fast-food giant McDonald's and semiconductor powerhouse Intel, are either on the cusp of forming a death cross or have already succumbed to its foreboding embrace. Among these, Intel's stock has experienced the most pronounced descent, plummeting by a staggering 38.5% year-to-date, thereby claiming the ignominious title of the worst-performing tech stock within the S&P 500 this year.
Intel's disappointing first-quarter results, marked by a revenue shortfall despite surpassing earnings per share expectations, have elicited concerns from analysts like Goldman Sachs' Toshiya Hari. Hari pointed to Intel's lagging position in the face of shifting server demand, attributing the company's woes to the persistent prioritization of AI infrastructure spending by cloud and enterprise clients. Moreover, Hari apprehensively noted Intel's risk of losing market share within the data center compute segment to rivals like Nvidia and Arm.
McDonald's, too, finds itself ensnared in the clutches of the death cross. With a year-to-date decline of 8.8%, the iconic burger chain has grappled with a slump in consumer spending exacerbated by boycotts amid the conflict in Gaza. Disappointing first-quarter earnings, underscored by lackluster same-store sales performance, have compounded McDonald's woes.
Meanwhile, CVS Health stands on the precipice of a looming death cross. With its shares plummeting nearly 30% year-to-date, and experiencing a precipitous 17% decline in a single week, CVS Health's outlook appears increasingly bleak. A shortfall in revenue and adjusted earnings, coupled with a downward revision of full-year profit forecasts due to escalating medical costs, have prompted UBS analyst Kevin Caliendo to downgrade CVS shares. Caliendo voiced skepticism regarding the simplicity of rectifying the company's challenges, emphasizing the complexity of implementing necessary resets to improve margins.
As these stocks teeter on the brink of bearish territory, investors brace themselves for potential downturns and navigate the treacherous waters of the market landscape.
In the Shadow of the Death Cross: Stocks Teetering on the Edge of Bearish Terrain
A select few stocks are currently traversing or on the brink of entering the concerning territory known as the 'death cross.' This ominous pattern materializes when a stock's 50-day moving average descends below its 200-day moving average, signaling investor pessimism or a weakening momentum that could precipitate further declines. Additionally, a death cross often portends the emergence of a bear market pattern.
According to a CNBC Pro analysis, three prominent entities, including fast-food giant McDonald's and semiconductor powerhouse Intel, are either on the cusp of forming a death cross or have already succumbed to its foreboding embrace. Among these, Intel's stock has experienced the most pronounced descent, plummeting by a staggering 38.5% year-to-date, thereby claiming the ignominious title of the worst-performing tech stock within the S&P 500 this year.
Intel's disappointing first-quarter results, marked by a revenue shortfall despite surpassing earnings per share expectations, have elicited concerns from analysts like Goldman Sachs' Toshiya Hari. Hari pointed to Intel's lagging position in the face of shifting server demand, attributing the company's woes to the persistent prioritization of AI infrastructure spending by cloud and enterprise clients. Moreover, Hari apprehensively noted Intel's risk of losing market share within the data center compute segment to rivals like Nvidia and Arm.
McDonald's, too, finds itself ensnared in the clutches of the death cross. With a year-to-date decline of 8.8%, the iconic burger chain has grappled with a slump in consumer spending exacerbated by boycotts amid the conflict in Gaza. Disappointing first-quarter earnings, underscored by lackluster same-store sales performance, have compounded McDonald's woes.
Meanwhile, CVS Health stands on the precipice of a looming death cross. With its shares plummeting nearly 30% year-to-date, and experiencing a precipitous 17% decline in a single week, CVS Health's outlook appears increasingly bleak. A shortfall in revenue and adjusted earnings, coupled with a downward revision of full-year profit forecasts due to escalating medical costs, have prompted UBS analyst Kevin Caliendo to downgrade CVS shares. Caliendo voiced skepticism regarding the simplicity of rectifying the company's challenges, emphasizing the complexity of implementing necessary resets to improve margins.
As these stocks teeter on the brink of bearish territory, investors brace themselves for potential downturns and navigate the treacherous waters of the market landscape.
