Stocks rallied on Tuesday, but only recouped less than half of Monday's steep losses as investors tried to parse the implications of escalated trade tensions between the U.S. and China. In an apparent attempt to quell concerns that negotiations have failed, President Trump this morning called it "a little squabble," insisting he has an "extraordinary relationship with Chinese President Xi Jinping." Both the Dow Jones Industrial Average and the S&P 500 gained around 0.8%.
A new skeptic for National Beverage
Shares of National Beverage dropped 4.7% after Jefferies analyst Kevin Grundy initiated coverage on the soft drink specialist with an underperform rating and a $45-per-share price target. For perspective, that target represents a roughly 17.5% discount from Monday's close.
To justify his bearishness, Grundy worries that sales of National Beverage's LaCroix varieties will slow in the face of new competitors like Pepsi's Bubly brand, leading to troublesome market-share losses for the company.
"We believe market share problems are structural and likely to drive downside to Street estimates," Grundy added.
Investors weren't impressed with Tencent Music's earnings beat
Tencent Music stock fell 6.2% in the wake of the Chinese music-streaming leader announcing mixed first-quarter results and an executive departure.
Quarterly adjusted earnings arrived at $0.11 per American depositary share (ADS), edging out Wall Street's consensus estimates by $0.01 per share. But quarterly revenue climbed 39% year over year to 5.74 billion yuan, below the 5.8 billion yuan most analysts were modeling.
"Our businesses recorded healthy growth rates driven by product innovation, content diversification, and technological advancement," stated CEO Cussion Pang. "As our users increasingly consume music content through streaming services, we are riding on this trend to gradually transition into a pay-for-streaming model over the coming years."
In a separate press release late yesterday, Tencent Music announced the resignation of company co-president and director Guomin Xie, as well as the simultaneous promotion of fellow co-president and board member Zhenyu Xie to chief technology officer. The company cited "personal reasons," for Guomin Xie's decision to step down, but the executive turnover did it no favors in conjunction with its mixed report.
Bayer's latest legal headache
Shares of Bayer lost over 2% after a California court slapped it with a more than $2 billion verdict through a lawsuit brought by a couple claiming its Roundup product caused their cancer.
The 10-figure decision was the third and largest such penalty incurred in recent months by the German pharmaceutical and life sciences company, which acquired Roundup-maker Monsanto in a $63 billion merger only last year. Bayer still faces over 13,000 additional lawsuits alleging it failed to warn consumers of Roundup's carcinogenic risks.
Bayer, for its part, stated it was disappointed with the ruling and pledged to appeal, calling the verdict "excessive and unjustifiable."