It wasn’t all good news for stocks Wednesday – the Nasdaq was negative for much of the day – but hump day ended on a positive note.
Excitement about a promising Covid-19 vaccine, tested by Moderna, and better-than-expected Goldman Sachs earnings helped boost stocks. That overcame continued fears about the coronavirus pandemic spiraling out of control and weighing on the economic recovery.
Stocks are heading back in the right direction as we approach the final stretch
No one wants to be stuck in a store right now. Instead, we’re stuck in our homes – and those stuffed-to-the-gills closets are starting to annoy us.
Both of those trends are boons for Poshmark, a resale ecommerce company.
“As people turn back into their homes, they realize how much excess stuff they have,” said Poshmark CEO Manish Chandra on CNN Business’ “Markets Now” live show. “We let anyone become an entrepreneur.”
He noted that the joy of shopping is gone as people are required to wear masks and reluctant to touch items. Instead, Chandra said Poshmark can “bring that joy to your home.”
The sales pitch has worked with a massive surge for the company, which is enjoying 50% growth in sales and listings and 40% uptick in new sellers.
Although some might be fearful of buying used items from someone else’s home, Chandra said it’s safer to buy from a reseller, because it takes longer for those items to get to your doorstep than, say, food delivery, giving any possible coronavirus contagion time to become a non-factor.
Poshmark is a private company. It was planning to go public last year but pulled its IPO in September, saying it would revisit that decision at a later time.
This recession is full of contradictions. We’re in a recovery, but still in a recession. The stock market is bouncing back strongly, but markets remain super volatile.
But if we take the broader look? We start to see that the bounce back is leveling off. Just a bit.
“It may be two steps forward, one step back along the way,” said Lakshman Achuthan, co-founder of the Economic Cycle Research Institute, on CNN Business’ “Markets Now” live show.
He noted the quick snapback in the jobs report may not remain as strong and long lasting as economists had hoped. Leading economic indexes continue to point to the upside –they’re not showing a fresh slowdown – but, he noted “There’s a lot of ‘on the one hand / on the other hand’ going on.”
“As deep and bad as this recession has been, it was going to be relatively short-lived,” Achuthan said. “But we have to be on guard. … What happened in this recession was literally off the charts.”
Tech might have flown a bit too close to the sun lately. An emerging tech Cold War between China and the United States isn’t exactly good news for American technology companies.
Big Tech declines led the Nasdaq, a trailer all day, into slightly negative territory by midday. The broader stock market remained positive, with the Dow up about 100 points and the S&P 500 index 0.4% higher.
Amazon was the biggest laggard today, falling 2.6%. Ebay, its smaller ecommerce rival, fell 2.5% and Nvidia was down 2.4%. Netflix also fell 2%, joining Wednesday’s biggest loser club.
It was looking earlier today like stocks were going to soar, but we’ll settle for this.
The Dow is up around 200 points as we approach midday, and the S&P 500 is 0.7% higher. The Nasdaq is trailing, up only 0.1%.
Two big factors – Moderna’s promising Covid-19 vaccine trial, and Goldman Sachs’ way-better-than-expected earnings report – are pushing stocks higher. But, you know, it’s hard to get too excited about anything these days, and investor enthusiasm is significantly more muted at the moment than it was earlier this morning.
Burberry (BURBY) had a dismal first quarter. The luxury retailer said same-store sales sank 45% as business was “severely impacted by the drop in luxury demand from Covid-19.”
The company expects demand to improve slightly this summer, with sales falling 15% to 20%. Burberry didn’t release full-year guidance because of uncertainties caused by the virus.
Shares dropped more than 5% in early trading.
US airline stocks were all up 6% or more in early trading, significantly outpacing broader market gains, after Moderna reported “promising” results in a Phase 1 Covid-19 vaccine study.
The pandemic-fueled plunge in air travel demand has led to massive losses and sharply lower stock prices across the industry.
Delta Air Lines reported a $5.7 billion net loss Tuesday and a drop in bookings, as Covid cases rise in the US South and Northeastern states put limits on travels. Other airlines are expected to post multi-billion-dollar losses when they report results next week.
But shares were sharply higher at all US airlines – both the major carriers such as Delta, American, United and Southwest, and smaller carriers including Alaska, JetBlue, Spirit and Allegiant.
Goldman Sachs isn’t letting its blockbuster earnings nor booming markets get to its head.
David Solomon, the CEO of Goldman Sachs (GS), told analysts Wednesday the company is not banking on a speedy recovery from the collapse.
The good news is that Goldman’s economic forecasts have improved. The bank is now expecting a US GDP contraction of 4.6% in 2020, compared with 6.2% back in April.
But the bad news is that Goldman’s global GDP forecast has darkened, with a drop of 3.4% now anticipated.
The biggest risk remains the pandemic, which has forced California, Texas and New Mexico and other states to reimpose health restrictions.
“We are navigating an uncertain macroeconomic backdrop brought on by an extraordinary global health crisis,” Solomon said. “The path to reopening in many US states and corresponding economic consequences remain unclear.”
PNC’s profits more than doubled during the second quarter – but the super-regional bank’s numbers look weaker under the hood.
PNC (PNC) reported a net income of $3.7 billion, up from just $1.4 billion a year ago. Yet that profit surge was driven by the sale of a 22% stake in asset management behemoth BlackRock (BLK) – a lucrative deal that created an after-tax gain of $4.3 billion.
If that BlackRock windfall is excluded, PNC actually lost money because of the health crisis. The bank posted a loss of $744 million from continuing operations, compared with a profit of $1.2 billion a year ago.
PNC blamed “uncertainty in the economy related to the pandemic” that caused a $2.5 billion surge in provisions for bad loans, up from $914 million during the first quarter.
Revenue dropped 6% to $4.1 billion, narrowly missing estimates.
PNC’s shares climbed 2% Wednesday, trimming its 2020 loss to 35%.
US stocks soared once again at Wednesday’s opening bell.
The Dow opened up 350 points after a Moderna coronavirus vaccine showed promising results. Moderna shares surged 14%.
The S&P 500 was up 1%, and the Nasdaq rose 0.7%.
The vaccine hopes sent travel companies like Delta Air Lines and Carnival sharply higher. Goldman Sachs is rallying 4% on near-record revenue driven by robust trading and investment banking results.
US stocks finished sharply higher Tuesday, with the Dow spiking 557 points, or 2.1%.
Moderna, a biotech company, had some much-needed good news to share about coronavirus: Its vaccine candidate has been found to induce immune responses in all of the volunteers who received it in a Phase 1 study.
The stock surged 14% in early trading, and the stock market soared, too.
These early results, published in the New England Journal of Medicine on Tuesday, showed that the vaccine worked to trigger an immune response with mild side effects – fatigue, chills, headache, muscle pain, pain at the injection site – becoming the first US vaccine candidate to publish results in a peer-reviewed medical journal.
The vaccine is expected to begin later this month a large Phase 3 trial – the final trial stage before regulators consider whether to make the vaccine available.
Delta Air Lines is pleased that nearly 20% of its staff have agreed to take buyouts and early retirements. But those exit packages will cost the airline billions.
Delta said Tuesday that more than 17,000 out of 90,000 employees had signed up for packages to leave the company. It disclosed Wednesday that it expect to take a charge of between $2.7 billion and $3.3 billion to cover the cost of the programs during the current quarter.
It said the actual cash payments to employees during the current quarter will come to between $500 million and $600 million. The packages include pay, health insurance packages and travel privileges that will extend into future quarters.
Delta and other airlines have announced they will need many fewer employees due to the drop in demand for air travel in the face of the Covid-19 pandemic. Delta CEO Ed Bastian said he’s hopeful that the large number taking buyouts and early retirement will allow Delta avoid or at least limit the number of involuntary layoffs or furloughs.
Dowfutures are now up 535 points, boosted by a promising vaccine trial and Goldman Sachs’ surprisingly excellent earnings report.
Goldman, a Dow component, helped boost the index’s futures 2%.
S&P 500 futures are up 1.4%, and the Nasdaq continued to trail Wednesday: futures were up 0.6%.
Goldman Sachs (GS) revealed a 41% surge in revenue Wednesday as the Wall Street bank capitalized on booming markets and a flurry of dealmaking.
The stronger-than-expected results were driven by record investment banking revenue and a nine-year high for its trading arm.
Goldman’s robust quarter underscores the bifurcated rebound in the United States from the pandemic. Although unemployment remains high and bankruptcies are mounting, the red-hot stock market has largely recovered and companies are raising record sums of money in capital markets.
Asia’s richest man is getting another massive investment from Silicon Valley as he grows his technology empire in India.
Google (GOOGL) will pump $4.5 billion into Mukesh Ambani’s Jio Platforms, the digital technology arm of sprawling conglomerate Reliance Industries. That gives Google a 7.7% stake in the company, the companies announced Wednesday.
The investment includes a deal to jointly develop an entry level, affordable smartphone and “expand the benefits of digitization across the length and breadth of India,” they said. The deal values Jio at about $58 billion.
Apple has won its appeal against a European Commission ruling that it owed Ireland €13 billion ($14.9 billion) in taxes.
The European Union’s second highest court ruled Wednesday that the Commission had not proven that the company had received illegal state aid from Ireland through favorable tax agreements.
The European Commission — Europe’s top antitrust authority — said in 2016 that the Irish government had granted Apple (AAPL) an illegal advantage by helping the iPhone maker keep its tax bill artificially low for more than 20 years.
Stock futures pointed to a second-straight positive day after a Covid-19 vaccine developed by Moderna has been found to induce immune responses in all of the volunteers who received it in a Phase 1 study.
Coronavirus has decimated the global economy, and the recovery has proven choppy as the United States has failed to contain the spread of the virus. Without a working vaccine, it’s unlikely the economy can fully recover.
US stocks finished sharply higher Tuesday even as America’s leading banks warned about loan losses piling up and uncertainty about the future. The Dow climbed 557 points yesterday.
