Best trades on CNBC Thursday: Pros are watching Coinbase resurgence after BlackRock deal
Coinbase surged on Thursday, attracting the attention of top markets pros. Coinbase shares gained 10% to close at $88.90, lifted by news that BlackRock entered a partnership with the crypto exchange. Chatter on Reddit and possible short covering may have helped buoy shares to even greater heights, as COIN touched $116.30 during the trading day.
-Darla Mercado, Joshua Natoli
Dow slips, S&P 500 is flat, Nasdaq rises at Thursday close
Stocks wavered Thursday and closed mixed ahead of the July jobs report, due Friday.
The Dow Jones Industrial Average shed 85.68 points, or 0.26%, to 32,726.82. The S&P 500 fell 0.08% to close at 4,151.94 after hitting its highest level since June on Wednesday. The Nasdaq Composite increased 0.41% to 12,720.58, the highest close since early May.
Treasury yields edge lower ahead of jobs report
Treasury yields were lower on the day, as investors await Friday’s jobs report.
The 10-year yield hit a low of 2.52% this week, and then swiftly went to a high near 2.82%. It was trading at 2.67%, in the middle of that range Thursday afternoon. Yields move opposite price.
The yield fell sharply earlier in the week as investors worried about recession and tensions with China as House Speaker Nancy Pelosi visited Taiwan. But the yield snapped back on hawkish comments from Federal Reserve officials.
“It was one of the biggest intraday 10-year yield reversals we’ve seen in a decade,” said Greg Faranello, head of U.S. rates at AmeriVet.
He said the Bank of England soured the mood Thursday. The U.K.’s central bank raised rates by a half percentage point and said it expected a prolonged recession..
Now, the market focus is on Friday’s employment report, expected to show 258,000 non farm payrolls were added in July, according to Dow Jones. “These numbers need to keep coming in strong or the recession narrative will grow in the U.S.,” said Faranello.
Stocks mixed heading into last hour of trading
Going into the final hour of trading, U.S. stocks are mixed and fluctuating. The Dow Jones Industrial Average shed 82 points or 0.25%, while the S&P 500 was barely down 0.06%. The Nasdaq Composite held onto gains, up 0.32%.
Beyond Meat stock slips ahead of earnings
Shares of Beyond Meat fell more than 7% during intraday trading Thursday before the company’s scheduled earnings release, due after the bell.
The stock has struggled to gain this year and were most recently weighed down after McDonald’s said it had completed its U.S. test of a plant-based burger using Beyond Meat, and that the trial had lackluster results.
Beyond Meat has shed more than 44% year to date through Thursday’s close.
Gas prices fall for 50th day in a row
Gas prices have fallen every day for the last 50 days, bringing the national average for a gallon to $4.14, according to AAA.
That’s about 67 cents lower than a month ago and 90 cents lower than the June peak. Still, prices are about $1 more than they were a year ago.
Fed’s Mester reiterates call for higher interest rates to tackle inflation
Cleveland Federal Reserve President Loretta Mester reiterated her call Thursday for more interest rate hikes as the central bank looks to bring down inflation.
At an afternoon appearance in Pittsburgh, Mester said she sees the Fed’s benchmark borrowing rate increasing this year to more than 4%, compared to its current target range of 2.25%-2.5%. That’s consistent with previous estimates she’s made, and she again said she would need convincing evidence that inflation is moderating before changing her stance.
Though she also said “we’re not in recession right now,” she noted that risks are rising.
Mester’s comments are part of broadly hawkish positions staked out this week from Fed officials who see continued rate increases as a necessary for a fragile economy dealing with inflation at 40-year highs.
Traders are pricing in a 0.5 percentage point increase at the September meeting of the Federal Open Market Committee. They also expect the Fed to start cutting rates in the back half of 2023, something Mester acknowledged is possible.
GDPNow update puts third-quarter growth rate at 1.4%
The outlook for third-quarter growth has brightened just a bit.
Following a raft of economic data this week on services, trade and manufacturing, the Atlanta Federal Reserve’s GDPNow gauge indicated that growth from July to September is tracking at a 1.4% pace. That’s up 0.1 percentage point from the last update Monday, but down from the 2.1% starting point last week.
The tracker won’t be updated again until Aug. 10.
e.l.f. Beauty surges after solid earnings report
Shares of e.l.f. Beauty jumped more than 8% Thursday to a 52-week high after the company reported earnings Wednesday that beat Wall street’s estimates. The company also raised its outlook for fiscal year 2023.
This market rally has no legs, HSBC says
The market’s recent surge from the June low shouldn’t be trusted, HSBC said.
“We think this is rather wishful thinking,” Max Kettner, chief multi-asset strategist at HSBC Bank, said in a note to clients. “For this ‘buy anything’ rally to continue, we’d need to see further repricing of rate hike expectations and another sharp drop in real yields.”
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—Fred Imbert, Yun Li
Goldman thinks there could be another leg lower in the market
The firm’s analysts cite systemic traders who didn’t get bearish enough for the positive shift in sentiment. Goldman focuses on large institutional investors when making its determinations.
According to Goldman’s market indicators, investors haven’t reached levels of bearishness that usually indicate a true bottom.
“The ‘true’ trough of our indicator has generally occurred at levels below the 20th percentile, a level we have not actually reached YTD, which suggests there could still be room for downside moves, especially after temporary rebounds,” the analysts wrote.
They said the path from here will become more dependent on macroeconomic data.
Oil falls further
Oil prices continued to decline Thursday, with West Texas Intermediate and Brent crude prices hitting levels not seen since Russia invaded Ukraine.
WTI is near $87.78 per barrel, the lowest level since Feb. 3. So far this week, WTI has shed more than 10% and is on track for its worst weekly performance since the beginning of April.
Brent is near a session low of $93.50, its lowest since Feb. 21. It’s on track for its worst week since April 24, down nearly 15% so far week-to-date.
Coinbase volume more than doubles
Trading in Coinbase shares exploded Thursday after the company’s deal with BlackRock, the biggest asset manager in thge world, was announced.
Coinbase shares have exchanged hands 40.6 million time on the day. That’s more than double the stock’s 30-day average volume of 14.83 million, FactSet data shows.
Stocks at midday: Dow, S&P 500 slump, Nasdaq claws back losses
Stocks were mixed midday, with the Dow Jones Industrial Average and the S&P 500 down but off lows of the day. The Nasdaq Composite index erased earlier losses to trade slightly in the green, boosted by gains in internet retail stocks.
At around noon ET, the Dow Jones Industrial Average lost 75 points, or 0.23%. The S&P 500 was down 0.04%. The Nasdaq Composite was up 0.18%
Internet retail stocks lift Nasdaq
JD.com truck receiving incoming goods and preparing shipments at the Northeast China based Gu’an warehouse and distribution facility in Gu’an, Сhina.
XiXinXing | iStock Editorial | Getty Images
The Nasdaq Composite was boosted Thursday by shares of internet retail companies which surged on solid earnings reports. Mercado Libre, the top performer in the index, jumped nearly 16% after it reported earnings that beat Wall Street’s expectations.
China’s JD.com and Pinduoduo jumped about 4% each, lifted by Alibaba’s earnings.
Ceridian shares rally after earnings beat
Ceridian HCM rallied more than 9%, outperforming every other S&P 500 stock, after the payroll processing and staff monitoring company reported earnings per share that beat analyst expectations.
The company earned an adjusted 21 cents per share, topping a StreetAccount estimate of 10 cents per share. Revenue also came in above expectations. Additionally, Ceridian issued third-quarter revenue guidance that was ahead of estimates.
Thursday’s gain put the stock on track for its biggest one-day gain since December 2020.
Shake Shack plunges on earnings miss
Pedestrians walk past a Shake Shack location in New York.
Scott Mlyn | CNBC
Shake Shack shares shed more than 8% Thursday after the company reported quarterly earnings that fell short of Wall Street’s expectations for revenue but beat on earnings-per-share. The fast food chain said that a slow return to work in July weighed on results.
Energy sector weighs on S&P 500
The energy sector was the biggest laggard in the S&P 500 midday. A slump in oil prices, spurred by fears of a global recession, weighed on the sector. The Energy Select Sector SPDR Fund, which tracks the sector, shed more than 2%.
Datadog, Lucid slump after reporting earnings
Datadog fell nearly 5% after giving a conservative third-quarter revenue outlook, even though its quarterly results beat Wall Street’s expectations. Lucid Group, an automaker, shed more than 10% after cutting its production outlook for 2022 for the second time.
Restaurant Brands International jumps more than 6% after earnings beat
Alibaba shares climb 3% after earnings beat
Alibaba reported fiscal…
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