Here’s What Happens When Demand Goes Up in Smoke [3 Must-See Charts]

It was a quiet week on Wall Street.

No crazy political news has cratered stocks. Earnings season is chugging along without a hitch. Overall, stocks are behaving nicely. Even the CBOE Volatility Index has faded toward one-month lows.

It’s nice to get a little break from the wave of market insanity we’ve endured this year. Enjoy it while it lasts!

Let’s wrap up the week by checking out the charts:

1. Slow Cigarette Sales Crush Philip Morris

People across the world are living healthier lives — and smoking less. That’s great news for public health. But it’s not helping shares of the big tobacco companies.

“As global smoking rates decline, tobacco companies are trying to keep up performance by boosting prices and introducing new products,” Bloomberg reports. “That didn’t fully pan out last quarter as sales were hit by increased taxes in Saudi Arabia and slower demand. Cigarette shipments fell 5.3 percent in the first quarter, offsetting a rise in heated tobacco unit deliveries.”

Shares of Philip Morris International (NYSE:PM) were hit especially hard after announcing earnings this week. The stock cratered more than 16% to new 52-week lows on Thursday.

Flaming Out

Tobacco companies have successfully fended off concerns regarding their shrinking demographic by raising cigarette prices. But it looks like this tactic has become less effective as the number of smokers continues to dwindle.

There’s no reason to try and buy this dip anytime soon…

2. The amazing Amazon growth machine

In his latest shareholder note, Jeff Bezos revealed for the first time the number of global paid Prime members: 100 million.

“In 2017 Amazon shipped more than five billion items with Prime worldwide,” Bezos notes, “and more new members joined Prime than in any previous year — both worldwide and in the U.S.”

Amazon stock is also hitting all the right notes. After a quick tumble to finish off first quarter trading, shares are roaring back to life this week.

Amazons Back

As if the 100 million Prime customers stat wasn’t a big enough reveal, Amazon also introduced Amazon Blueprints this week. Blueprints is a platform that allows customers to create their very own Alexa skills — without having to know any computer coding.

Amazon’s industry-leading voice assistant can recite the weather, tell you the day’s top headlines, and play your favorite music. She can even make all your crazy delivery dreams come true — no button-pushing required. Just whisper your demands within earshot of your Echo and she does your bidding.

Now imagine the power of Alexa’s voice commands combined with the ability to learn new, custom skills created by users all over the world…

Amazon has been the leader in voice since the start. These developments continue to widen the gap over other virtual assistant offerings from Apple, Google, and Microsoft.

3. The Dow remains stuck near breakeven

Everyone remembers the Dow’s ridiculous romp to begin 2018 trading. Stocks shot higher out of the gate and didn’t look back. In the blink of an eye, the industrials were up almost 8% on the year.

Of course, the good times didn’t last forever. Most investors were panicking by mid-February as the major averages gave back all their early gains and sunk unto the red.

Just a few weeks in to the second quarter, the Dow is still stuck near breakeven on the year…

DowJones

After several choppy weeks of trading and more than a few trade war scares, the most important stocks on the market are right back to where they started.

We’ll see over the next few weeks if investors step in and bid stocks back up toward their highs — or if we’re forced to suffer through more market chop as the summer months approach…

Sincerely,

Greg Guenthner

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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