Hamza Shaban
Stock market today: Tech leads market surge after jobs report blowout
In this article:
Stocks finished higher Friday as investors shook off jitters after digesting a strong monthly jobs report, even as uncertainty lingers over the Federal Reserve's path to interest rate cuts.
The Dow Jones Industrial Average (^DJI) put on about 0.8%, or 300 points, while the S&P 500 (^GSPC) added 1.1% on the heels of its worst single-day fall since February. The tech-heavy Nasdaq Composite (^IXIC) gained 1.2%.
Still, this week saw weekly losses for all three major indexes as Wall Street interpreted commentary from central bank officials that appeared to sap some confidence.
As Yahoo Finance's Josh Schafer reported, the US labor market continued to impress in March. Employers added 303,000 jobs, much more than economists expected, while the unemployment rate ticked back down to 3.8%. Wage growth also met expectations.
The win comes after the major gauges retreated during the earlier session as oil prices hit their highest levels in six months, spurring worries about a boost to inflation, and a panoply of Federal Reserve speakers rattled faith in an interest-rate cut coming any time soon.
Nerves in the market are running high, going by this week's bumpy action in stocks. Investors are juggling economic releases and corporate news alongside growing tensions in the Middle East.
Oil prices held near multimonth highs on Friday, building on the big gains notched amid escalating Israel-Iran tensions. Brent crude futures (BZ=F), the international benchmark, hovered just below $91 a barrel, while West Texas Intermediate futures (CL=F) changed hands at just under $87.
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Stocks finish higher but sagged for the week
Wall Street claimed a victory Friday as tech stocks powered through. But all three major indexes lost ground for the week as uncertainty lingers over the Federal Reserve's path to interest rate cuts.
The Dow Jones Industrial Average (^DJI) added about 0.8%, or 300 points, while the S&P 500 (^GSPC) gained 1.1% on the heels of its worst single-day fall since February. The tech-heavy Nasdaq Composite (^IXIC) increased 1.2%.
Trump Media stock falls 13%
Trump Media & Technology Group (DJT), the parent company of Donald Trump's social media platform Truth Social, sank about 13% on Friday to cap off what's been a volatile trading week for the stock.
At current trading levels of about $40.30 a share, Trump Media boasts a market cap of roughly $5.5 billion, giving the former president a stake worth around $3.1 billion. After the company's public blockbuster debut last week, Trump's stake was worth just over $4.5 billion.
The stock drop comes on the heels of an updated regulatory filing earlier this week that showed the company taking on heavy losses and facing "greater risks" associated with the former president's ties to the platform.
According to the filing, Trump Media reported sales of just over $4 million as net losses reached nearly $60 million for the full year ending Dec. 31. The company warned it expects losses to continue amid greater profitability challenges.
Trump Media went public on the Nasdaq after merging with special purpose acquisition company Digital World Acquisition Corp. in a deal approved by shareholders late last month.
The former president founded Truth Social after he was kicked off major social media apps like Facebook and Twitter, the platform now known as X, following the Jan. 6 Capitol riots in 2021. Trump has since been reinstated on those platforms.
In the filing, Truth Social maintained its goal of providing a "'home' for cancelled content creators" and a space to hold "honest global conversation without fear of being censored or cancelled" due to political viewpoints.
The filing also revealed stakeholders are still subject to a six-month lockup period before selling or transferring shares.
The opportunity to cash in by selling some of his stake in the company could help Trump as he faces a $454 million fraud penalty and grapples with a campaign fundraising shortfall ahead of his 2024 election rematch against Biden. To note, Trump recently posted a $175 million bond in the fraud case, which puts the final payment on hold while he appeals the verdict.
The only exception to the lockup period would be if the company's board votes to make a special dispensation. Although possible, experts told Yahoo Finance last week the attempt would likely result in multiple lawsuits on behalf of public shareholders.
Disney and Iger's problems are nowhere near over
A week after settling a "win-win" situation with the state of Florida, Iger prevailed in a bruising proxy fight. This marks two significant victories and extinguishes major distractions that have needled Disney over the past year.
But now that he's cleared a path and quieted outside critics badgering the company, he's still left with all the problems at home.
The legacy media giant straddles two worlds. An older, lucrative system of cable television is dwindling as more customers say goodbye to traditional bundles. But the newer streaming model is hardly a savior. And it isn't yet profitable.
An iconic brand in the sports entertainment world, ESPN's future is also up in the air. Executives are pursuing a direct-to-consumer offering and a joint venture gambit to reconfigure how fans watch sports and win back the higher fees closer to cable subscriptions.
Iger rejects the argument that Peltz's activist campaign instigated recent changes that the market has celebrated. In an interview on CNBC Thursday, he said, if anything, the proxy fight was a distraction, diluting the time he had to spend on the turnaround plan.
"The market is reacting to how this company is performing, it was not reacting, really, to the activist fight," he said.
That may be true. But for now, the uncertainty over what directed Disney's performance — executive strategy or an insurgent threat— will disappear.
With no outside spoilers to blame, what's left is Iger's show-me story.
Stocks trending in afternoon trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Friday:
Tesla (TSLA): The electric vehicle maker fell 3% Friday afternoon following a Reuters report that revealed plans for a more affordable vehicle have been scrapped. Investors had long anticipated the entry-level model, which was intended to fulfill a major goal for the company to bring affordable EVs to the mainstream.
Trump Media and Technology Group (DJT): Shares continued to slide on Friday following an updated regulatory filing earlier this week that revealed the company lost $58 million in 2023. The parent company of Truth Social also warned that it faces "greater risks" than other sites due to its exposure to former President Donald Trump. The stock has shed more than one-third of its value from its peak last week.
Johnson & Johnson (JNJ): Shares of the healthcare giant fell 0.1% Friday afternoon after announcing a $12.5 billion deal to buy Shockwave Medical (SWAV) in a bid to broaden its portfolio of medical devices used to treat heart diseases. Shockwave gained nearly 2% on the news.
Krispy Kreme (DNUT): The doughnut and coffeehouse chain benefited from a Piper Sandler upgrade, with shares rising 5%. The upgrade came after the announcement of a national partnership with McDonald's (MCD). Piper Sandler analysts called the collaboration a "game changer," upping Krispy Kreme's price target from $14 to $20.
Signs of a re-accelerating economy point to fewer rate cuts
Investors have been closely watching signs that the economy is accelerating again. They've also been monitoring how Fed officials are interpreting those signals, and if the latest burst of hawkishness might delay long-anticipated rate cuts.
Apollo Management chief economist Torsten Slok has doubled down on his assessment that a reaccelerating economy will prevent the Federal Reserve from cutting interest rates in 2024. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)
In a post on Friday, Slok said the source of the economy's strength is "easy financial conditions."
"The stock market is up +$10trn over the past five months, which is a significant wealth gain for household balance sheets," he said. "IPO activity is coming back and M&A activity is coming back. These factors will all support consumer spending, capex spending, and hiring over the coming quarters."
Slok's contention that the Fed will not cut interest rates this year comes after cautious comments from Minneapolis Fed president Neel Kashkari. In an interview on Thursday, Kashkari said that if inflation remained sticky, the Fed might not move toward an easing cycle.
“If we continue to see inflation moving sideways, then that would make me question whether we need to do those rate cuts at all,” he said.
Stocks rise in afternoon trading
Stocks pushed higher on Friday as Wall Street took strong jobs numbers in stride even as the prospects of a reaccelerating economy flamed concerns that the Fed might delay long-anticipated rate cuts.
The Dow Jones Industrial Average (^DJI) advanced 1%, or 400 points, while the S&P 500 (^GSPC) added 1.3% on the heels of its worst single-day fall since February. The tech-heavy Nasdaq Composite (^IXIC) gained 1.5%.
Tesla ends low-cost car plans
Plans for a more affordable Tesla (TSLA) model that investors were banking on to broaden the appeal of the all-electric carmaker have been scrapped, Reuters reported Friday, citing people familiar with the matter and company messages.
Tesla shares fell more than 3% following the news.
The company will continue to develop self-driving robotaxis using the same vehicle platform, according to the report. But the scuttled initiate represents a major setback for the carmaker that long promised affordable electric cars for mainstream customers.
Tesla's Model 3 sedan, its cheapest vehicle, retails for just under $40,000. The previously planned entry-level vehicle was expected to cost around $25,000.
Fierce competition from China would make delivering such a vehicle even more challenging as carmakers abroad have raced to deliver low-cost EVs.
One thing to be wondering about on retail stocks this spring and summer
Every single retail executive I talk to for the next month will be getting this same question from me.
How will oil prices back near $100 a barrel impact your margins and outlook? I just don't think this advance has been factored into outlooks — from shipping rates to gas price shock on the part of consumers.
I got my first answer on this front just now from Levi's (LEVI) CFO Harmit Singh down at the New York Stock Exchange.
Here's what he said on Yahoo Finance Live:
"Where our costs really get impacted by commodities is largely cotton. In terms of shipping rates, we have long-term contracts so at this moment, we are not seeing any pressure in terms of where oil is. Should it rise further, we'll be able to manage through it because we have other areas of opportunity to try and manage it. But right now, we're not worried about it."
4.7 magnitude earthquake strikes East Coast
A preliminary 4.7-magnitude earthquake struck the East Coast of the United States on Friday morning.
According to the United States Geological Survey (USGS), the earthquake was reported about 5 miles east of Lebanon, N.J. at about 10:23 a.m. ET.
"My team is assessing impacts and any damage that may have occurred, and we will update the public throughout the day,” New York Gov. Kathy Hochul said in a post on X, confirming shakes were felt across the state, including Manhattan.
Rumblings have also been reported across areas from Philadelphia to Boston.
In response to the earthquake, the US Federal Aviation Administration (FAA) issued a ground stop at New York City’s John F. Kennedy International Airport and Newark Liberty International Airport.
The quake may also impact other air traffic facilities throughout New York, New Jersey, Philadelphia, and Baltimore, the FAA warned.
A 4.8 magnitude earthquake in New Jersey may impact some air traffic facilities in New York, New Jersey, Philadelphia and Baltimore. Air traffic operations are resuming as quickly as possible. For real-time air traffic updates please see: https://t.co/smgdqJN3td.
— The FAA ?? (@FAANews) April 5, 2024
Stocks trending in morning trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday:
Johnson & Johnson (JNJ): Shares of the healthcare giant fell 0.3% Friday morning after announcing a $12.5 billion to buy Shockwave Medical (SWAV), in a bid to broaden its portfolio of medical devices used to treat heart diseases. Shockwave gained nearly 2% on the news.
Krispy Kreme (DNUT): The doughnut and coffeehouse chain benefited from a Piper Sandler upgrade, with shares rising nearly 5%. The upgrade came after the announcement of a national partnership with McDonald's (MCD). Piper Sandler analysts called the collaboration a "game changer," upping Krispy Kreme's price target from $14 to $20.
Solana (SOL-USD): The cryptocurrency fell 7% Friday as bitcoin and other digital currencies experience price volatility with just over two weeks remaining before the digital asset is expected to undergo its "halving" event, which will half the reward for mining bitcoin. Halvings reduce the rate at which new coins are created and therefore lower the available amount of new supply.
HubSpot (HUBS): Shares of the online marketing software company rose 3% following a Reuters report that Google Parent Alphabet is in talks with its advisers to acquire it. The potential deal would be Alphabet's largest acquisition, with HubSpot claiming a market value of roughly $35 billion.
Stocks edge up after strong March jobs report
Stocks ticked upward at the start of the trading day on Friday as investors digested an impressive March jobs report showing more than 300,000 jobs added while monitoring surging oil prices.
The Dow Jones Industrial Average (^DJI) put on roughly 0.1%, or 20 points, while the S&P 500 (^GSPC) added 0.3% on the heels of its worst single-day fall since February. The tech-heavy Nasdaq Composite (^IXIC) gained 0.4%.
Here is Wall Street's new highest price target on Netflix
The Netflix (NFLX) rally is just beginning, contends Pivotal Research analyst Jeffrey Wlodarczak.
Wlodarczak hiked his price target on Netflix shares by $65 to a Street high $765 this morning, projecting about 24% upside from current levels. Shares are up 27% year to date.
At the core of the revised price target are higher assumptions around subscriber growth and average revenue per user. Wlodarczak believes Netflix has "solid momentum" around each metric given its unrivaled content offering. Wlodarczak says:
"In the end, our positive investment view remains unchanged, Netflix has won the streaming wars and their continued strong subscriber/average revenue per user and free cash flow generation should drive the shares higher. The key for Netflix going forward is to press their advantages and keep the flywheel going because the larger they get the more leverage they have over their peers, content creators, the better their product gets (allowing them to drive subscriber/average revenue per user growth) and the bigger the moat grows around their core business model."
PepsiCo comes into focus as a safe haven
One stock that hasn't stunk up the joint in the past month is PepsiCo (PEP).
Shares are up 2.6% over the last four weeks, outperforming the S&P 500's 0.3% gain. Coca-Cola (KO) has dropped 0.9%.
Jefferies analyst Kaumil Gajrawala appears to be doubling down on the stock's move today, adding PepsiCo to the firm's "Franchise Picks" list (removing Colgate).
Gajrawala sees several catalysts for the stock: 1) an international business that is likely to surprise to the upside due to its scale — it represents about 40% of PepsiCo's overall business; 2) a long runway in the snacking category; 3) the potential for above-average profit margins to be fueled by the beverage and snacks business and lower costs.
"There is a lot to like," Gajrawala says.
I caught up with PepsiCo's chairman and CEO Ramon Laguarta at the World Economic Forum in late January. The below video gives you a good flavor on what his team is up to for this year.
Big call on Uber out of Jefferies
Jefferies sees Uber's (UBER) stock riding only higher.
Uber's price target got bumped to $100 from $95 by its analyst John Colantuoni this morning, which assumes about 33% upside from current levels.
The call looks logical to me, as it centers on Uber's ability to gain new customers by offering new mobility product tiers. Colantuoni says:
"Uber has dramatically expanded mobility offerings in recent years, increasing the portfolio from just two products in 2011 (UberX/Black) to ~20 currently. Addressing more use cases allows Uber to capture new users and drive increased frequency through multi-product adoption, which also expands the total addressable market by providing a substitute for more driving occasions."
The stat backing up Colantuoni's call: Bookings from new mobility products hit $8.5 billion in 2023, up from $2.3 billion in 2021.
Watch this one area in the jobs report, says Goldman Sachs
The immigration impact.
Goldman Sachs has been doing some good work of late around the economic impact of immigration on the US economy, and its team has continued that analysis ahead of today's March jobs report.
Chief economist Jan Hatzius estimates that nonfarm payrolls rose by 240,000 in March — above consensus of 213,000 — in part due to a boost in the supply of immigrant workers.
Here's some of Hatzius's thinking on the issue:
"Elevated immigration boosted labor supply by roughly 80,000 per month last year, relative to normal, and we expect a continued tailwind averaging 50,000 per month this year. We expect an even larger boost for March in particular because of an influx of foreign-born jobseekers that had not found jobs as of February (241,000 newly unemployed workers since November).
"Given the still-elevated level of job openings and the ramp-up of the spring hiring season, we assume many of these labor force entrants found jobs during the March survey period. On this basis, immigration could conceivably contribute anywhere from 50,000 to 290,000 to job gains in tomorrow’s report, relative to normal."
Immigration influx impacting the US labor market. (Goldman Sachs) And we are watching Nvidia
Eyes on market leader Nvidia (NVDA).
The stock has dropped below its 20-day moving average amid the broader market sell-off. Naturally, any time an investor darling like Nvidia is lagging, it warrants concern. Many on the Street will say something akin to, "As goes Nvidia, as goes the market."
They wouldn't be wrong.
Good chart on this thread from Evercore ISI's Julian Emanuel. He highlights how Nvidia's stock underperformed last summer, and it weighed on the broader market. He hints the pattern may be starting again.
As goes Nvidia, as goes the market. (EvercoreISI)
