Friday 6/7/19=DJIA +309 NASDAQ +138
I sent out tweets on the following stocks on Thursday: OESX, SHOP, ABT, IBDRY, AMD, POOL, EVBG, and ROKU.
As I go to press with my newsletter on Friday, the market is rocking and rolling after a weak jobs report stoked hopes for several rates cuts from the FED. Here is what economists expected.
- With trade war drums beating loudly, a strong employment report from the Labor Department this morning will probably do little to dial back market expectations that the Fed will cut interest rates this year.
- Nonfarm payrolls probably increased by 185,000 jobs last month after surging 263,000 in April, a figure that's well above the roughly 100,000 needed per month to keep up with growth in the working-age population.
- Average hourly earnings are forecast to have increased 0.3% after rising 0.2% in April, while the unemployment rate is expected to have remained near a 50-year low of 3.6%.
Here is what was delivered instead:
- The stock market looks headed for another gain, supported by increased expectations for the Fed to cut rates following May's soft employment report; Dow +0.7%, S&P +0.8%, Nasdaq +1%.
- Non-farm payrolls rose by a lower than expected 75K in May, marking the second straight month of monthly jobs growth below 100K and perhaps providing the Fed with "a clear easing path by July," investor Stanley Druckenmiller tells CNBC.
This also helped the market on Friday:
- Those who believe in the powers of the Plunge Protection Team have more grist for the mill this morning. In headlines hitting the Bloomberg just minutes after the lame jobs report sent futures headed lower, the U.S. will give some Chinese products more time before being subject to higher tariffs.
- Whether it was the eased stance on trade, or the thought of a sizable rate cut cyclegetting started sooner rather than later, futures have bounced, the S&P 500 (NYSEARCA:SPY) now up 0.3%, and the Nasdaq 100 (NASDAQ:QQQ) up 0.4%.
Time to re-fi!!!!
- The 30-year fixed-rate mortgage averaged 3.82% for the week ending June 6, 2019, down 17 basis points from 3.99% in the previous week, according to Freddie Mac's Primary Mortgage Market Survey.
- Compares with 4.54% a year ago at this time.
Current GDP estimate from Atlanta Fed:
- The Atlanta Fed estimate for Q2 real GDP growth rises to 1.5% from its previous estimate of 1.3% on June 2.
- The updated estimate incorporates improvements in Q2 personal consumption expenditures growth to 3.2% from 3.0% and for nonresidential equipment investment growth to 0.2% from -1.2%.
- U.S. households' net worth rose 4.5% in Q1 2019, more than offsetting the 3.6% decline in the last quarter of 2018 and marking the largest quarterly gain since Q4 2004.
- The value of directly and indirectly held corporate equities increased $3.2T, representing a 12% rise, and the value of real estate increased $0.4T, or 1.7%.
- The data are part of a quarterly report from the Federal Reserve known as the Flow of Funds that tracks aggregate wealth of all U.S. households and nonprofit organizations.
- The report doesn't provide detail on wealth distribution among households and isn't adjusted for inflation.
- Household debt growth moderated to a seasonally adjusted annual rate of 2.3% in Q1 2019 from 2.8% in Q4 2018, while the household saving rate improved to 6.7% of disposable personal income from 6.5% in Q4.
- Further signals of an economic slowdown are continuing to build, with Germany reporting a staggering 3.7% plunge in April exports, the most in nearly four years, alongside a 1.9% contraction in industrial output.
- The figures were severe enough for the country's central bank, the Bundesbank, to slash its 2019 GDP forecast in half, to just 0.6%.
- "For economic growth and, to a lesser extent, for the rate of inflation, it is the downside risks that predominate as things stand today," the central bank said in a biannual update of its projections.
To infinity and beyond!
- Beyond Meat (NASDAQ:BYND): Q1 Non-GAAP EPS of -$0.14 beats by $0.01; GAAP EPS of -$0.95 misses by $0.80.
- Revenue of $40.21M (+214.6% Y/Y) beats by $1.28M.
- Shares +4.91%.
Shopify is one of the best stocks that I have ever owned!
- KeyBanc raises its Shopify (NYSE:SHOP) target from $275 to $300, matching the Street-high target. The rating stays at Buy.
- The bank cites "over-hyped" concerns about competition from Magento, which Adobe (ADBE+0.3%) acquired last year. Analyst Josh Beck says the market has room for both companies.
- Beck sees a path for Magento to gain a 9% share while Shopify picks up 2% with minimal overlap.
- Upcoming catalyst: Shopify's Unite conference takes place June 18-20.
- Shopify shares are up 1.9% to $298.15.
- Shopify has an Outperform average Sell Side rating.
What a week in the market!