It seems that every day investors get a warning sign the Federal Reserve’s efforts to slow down consumer spending and the entire economy is coming to fruition.
Another indication came after the close on Thursday from Rent-A-Center Inc RCII, which slashed third-quarter guidance. The price action following the guide lower made it the PreMarket Prep Stock Of The Day.
Rough Few Weeks: Over the past few weeks, the issue has been following the S&P 500 index lower.
After reaching $25.80 on an intraday basis on Sept. 16, it weakened to close at $24.15. That following Monday, it had a solid rally, moving up $0.65 or 2.7% to close at $24.81. However, ahead of Thursday’s guidance cut, it has traded lower in six of the last eight sessions.
Thursday’s close of $22.23 was a dime higher than the lowest close for the move made on Monday at $22.13.
Getting Ahead Of The Bad News: The company, which is not due to report its third-quarter earnings until Nov. 2, prepared the investors for the upcoming shortfall in EPS and sales. The company trimmed third-quarter adjusted EPS guidance from $1.05-$1.25 to $0.85-$0.95 versus the $1.14 estimate. Also, it narrowed sales guidance from $1 billion-$1.055 billion to $1 billion-$1.02 billion versus the $1.03 billion estimate.
PreMarket Prep Take: When the issue was being covered on the show, it was already in the red by nearly $3, trading at the $18.50 area. “This proves that the recession that is predicted is already happening,” co-host Dennis Dick bluntly stated. “People are buying less big stuff and it is going to show up in next quarter’s earnings.”
The author of this article alerted investors the issue was now back at its May 2020 low of $18.05. However, there was a void in monthly support after that going back to its April 2020 low at $12.34 and March 2020 low at $11.69.
RCII Price Action: After a much lower open ($19.21 versus $22.33), the issue moved higher but quickly peaked at $19.80 and resumed its move lower. It continued to make new lows for the day with the current one being at $17.50 as of 1:45 p.m. EST, though it is attempting to move away from that low.
The discussion on the issue from Friday’show can be found here:
Photo: rafapress via Shutterstock
Image and article originally from www.benzinga.com. Read the original article here.