Diamonds and Dogs

6/26/18

 The GE (GE) rollercoaster continues. GE jumped 7% after stating they would slim down the company to focus on jet engines, power plants and renewable energy. GE will spin off its healthcare business and divest its stake in oil-services firm Baker Hughes, effectively breaking up the 126-year-old conglomerate which was once the most valuable U.S. corporation and a global symbol of American business power. GE pledged to preserve its 48-cent-a-year dividend until the healthcare unit is spun off. 

Avis Budget (CAR) sank 9.4% to a seven-month low after Morgan Stanley resumed coverage of the rental car company with a bearish underweight rating. Analyst Adam Jones set a $30 stock price target, which implies a further 14% decline from current levels. He also reiterated his underweight rating on Avis rival Hertz Global. "Both Avis and Hertz employ large degrees of financial leverage and are heavily dependent on the used car market and credit environment," Jones wrote in a note to clients. "We believe that rising off-lease supply and increased tech penetration in new vehicles provide downward pressure to used car prices at what is already a late point in the cycle."