It was another record-breaking day on Wall Street after all. Following a lackluster start to the day, stocks finished moderately higher and both the S&P 500 and the Nasdaq Composite rose to fresh all-time highs.
The S&P and the Nasdaq both closed up 0.2%.
The Dow finished 0.1%, or 39 points, higher.
That Delta variant isn’t going anywhere, and masks are back. What does that mean for beauty businesses? People spend more money on products for their eyes, according to Gregg Renfrew, founder and CEO of clean beauty business Beautycounter.
Even though people mostly stayed at home since the pandemic started, Beautycounter has been growing, Renfrew said on the CNN Business digital live show Markets Now.
“We were very fortunate to enjoy significant growth year-over-year during the entire pandemic,” she said. “I think at a time where people were trying to protect the health and safe of their families, trying to take care of themselves, skin care was really important part of people’s routines.”
Private equity firm Carlyle took a stake in the business earlier this year, valuing the company at $1 billion.
“We were thrilled to jump in their platform,” Renfrew said. “Our partnership with them is really going to be amplifying everything that we’ve already been doing really well,” such as focusing on direct-to-consumer strategy.
But the company isn’t immune to some of the pandemic perils, and it has felt supply chain squeezes in manufacturing and shortages in raw materials.
Sam Adams owner Boston Beer is “truly” having a terrible year. Shares of Boston Beer (SAM), which also owns the hard seltzer brand Truly, fell 5% Wednesday after an analyst at Cowen downgraded the stock to an “underperform” rating. That’s essentially a sell.
Boston Beer has now plunged more than 40% this year. The company warned in July that alcoholic seltzer, a low calorie drink that became increasingly popular with millennials, was losing some of its fizz. More competition is coming, too.
That’s why Cowen’s Vivien Azer slashed her outlook for the stock from $825 to just $400 a share. That’s 30% below the current price and is the lowest price target on Wall Street for SAM.
Azer wrote in her report that “seltzer’s summer slump” may not end anytime soon either. “The category is slowing more dramatically,” than she had originally expected.
Not even a splashy ad campaign with red hot pop superstar Dua Lipa has been enough to save Truly’s sales. We guess that she and Boston Beer didn’t create something phenomenal after all. Don’t you agree?
It’s a weird time to be an investor right now.
Stocks are on pace for more record highs today but there is underlying anxiety about the Federal Reserve changing its tune and rolling back its market-supporting asset purchases.
“It feels really uncomfortable to invest right now,” said Kristen Bitterly, regional head of investments for North America at Citi Private Bank. “We’ve have 50 days [this year] where the S&P 500 has hit records, so we should be happy. But this lack of volatility is making investors uncomfortable.”
The S&P has doubled since March – it’s fastest pace since 1932, according to Bitterly. She thinks the trajectory for the market is still going higher, but this time with volatility as part of the mix.
That said, there is a lot going on underneath the surface, not everything is doing as well as large-cap US equities, Bitterly added.
“One of the challenges is that the easy money has been made,” she told Alison Kosik on the CNN Business digital live show Markets Now.
The Fed is part of this expected volatility, and Bitterly expects some commentary regarding tapering from the central bank by September.
For investors wanting to diversify outside of US equities, Bitterly is pointing across the Atlantic for the solution.
“The UK solves a lot of problems for investors right now,” she said, pointing at lower valuations, higher yields “and there’s an earnings growth story here, too.”
The Delta variant of Covid-19 is showing its ugly face in US economic data.
“We do already see people pull back,” said Diane Swonk, chief economist at Grant Thornton, calling the highly infectious virus variant a “fear factor” during an interview on CNN Business’ “Markets Now” live show.
“Unfortunately this particular wave, the Delta variant, is really a line between the vaccinated and the unvaccinated,” she added.
Even nations that did well in earlier outbreaks are now struggling with infections, causing additional supply chain disruptions, Swonk said. And the world is already in a supply chain squeeze that is pushing up prices.
That raises the question – will these higher prices persist? Swonk herself thinks that that’s possible, with higher inflation lasting into 2022.
Investors and economists are awaiting the views of Federal Reserve Chairman Jerome Powell on these issues. Powell will speak at the Jackson Hole Symposium Friday, which was moved online at the last minute.
“What the chairman has to do is really navigate these very uncertain times,” Swonk said. “The timeline on tapering and rate hikes could be contingent or delayed depending on the Delta variant.”
It’s lunchtime and we’re seeing green arrows across the board on Wall Street. All three major indexes are trading moderately higher and the S&P 500 and Nasdaq Composite are on track for record highs.
The S&P is trading 0.3% higher, while the Nasdaq is only up 0.1%.
The Dow is up 0.4%, or 125 points.
The decision by Dick’s Sporting Goods to stop selling guns at many of its stores in the wake of more mass shootings in America has not slowed down the retail giant one bit.
Dick’s (DKS) reported record earnings and sales, which rose more than 20% from a year ago, for the second quarter Wednesday, news that sent the stock surging nearly 15% to an all-time high. Shares are now up more than 130% this year. The company also boosted its earnings outlook for 2021.
Dick’s is rewarding its shareholders too. The company said it was boosting its stock buyback plan, raising its quarterly dividend by 21% and also paying out a special one-time dividend of $5.50 a share to all investors.
The solid results are also a sign that the company’s leadership transition plan is clearly working.
Ed Stack, who made the decision to cut back on firearms following the deadly mass shooting in Parkland, Florida in 2018, stepped down as CEO in February. He handed the reins to president Lauren Hobart, who has been with the company since 2011 and was a 14-year veteran at Pepsi (PEP) before joining Dick’s as its chief marketing officer. Stack is now executive chairman.
Wall Street is holding back its excitement a day after surging to new records.
The Dow opened up 0.1.%, or 17 points, but turned red in the first minutes of trading.
The S&P 500 and Nasdaq Composite also both rose 0.1%.
To be sure, both the Nasdaq and the S&P could still hit new all-time highs after the prior session’s records. The Nasdaq also soared above 15,000 point for the first time Tuesday.
In economic data, durable goods orders for July declined at a slower pace than expected.
Durable goods orders – machines, equipment and many other big things – fell less than economists had predicted in July. Orders declined 0.1%, compared with the 0.3% drop expected.
The drop “was entirely due to a plunge in the ever-volatile commercial aircraft component,” said Andrew Hunter, senior US economist at Capital Economics, in a note to clients. “The underlying details suggest that growth in business equipment investment will slow in the third quarter, but it remains strong by past standards.”
Excluding transport goods, orders rose by 0.7%, more than than 0.5% penciled in.
Don’t look now. But the Redditors are having fun toying with the stock market again. Several meme stocks soared on Tuesday for no specific rhyme or reason.
Yesterday, GameStop (GME) surged 28%. AMC (AMC) popped 20%. BlackBerry (BB) rose nearly 10%. And recently public Robinhood (HOOD), which has been both a friend and foe to meme investors, rose 9%. It was the best day for most of the meme stocks since June.
GameStop and Robinhood were each down Wednesday morning. But AMC and BlackBerry continued to rally in early trading.
Why the sudden fascination with the meme stocks again? Many of them have a fair number of short sellers betting against them. So there could be a so-called squeeze taking place.
That happens when investors, who borrowed shares and sold them with the hopes of buying them back at a lower price and profiting from the difference, are forced to buy back the shares quickly before the price heads higher.
But take a look at the calendar. These are the dog days of late summer for many traders. It may be silly to try and find a solid catalyst for why these stocks are ping-ponging all over the place again. And investors in GameStop and AMC are just enjoying the wild ride. GameStop shares are up nearly 1,000% this year while AMC is up more than 2,000%.
Chinese companies that have publicly traded stocks in the United States need to get their financials in shape or the Securities and Exchange Commission may delist them. SEC chair Gary Gensler told Bloomberg in an interview Tuesday that Chinese firms will need to submit more disclosures in annual reports, including details about how they are structured.
Several high profile Chinese stocks trading in the United States, including e-commerce giant Alibaba (BABA) and search engine Baidu (BIDU) have plunged because of increased regulatory concerns in both the US and China.
Beijing has been cracking down more on Chinese companies to try and sway many of them to list their shares in Hong Kong instead of on foreign exchanges. The Chinese government launched an investigation into Chinese ridesharing firm Didi (DIDI) just after its New York debut in late June. Shares of Didi have plunged 40% since then.
Gensler did not mention Didi by name in the Bloomberg interview. But he did say that if Chinese companies fail to meet deadlines for having their financial audits inspected, they could get booted from US exchanges as soon as 2024.
The SEC temporarily froze approvals of new Chinese IPOs in the wake of the Didi debacle. And Gensler recently took to Twitter to warn investors of the risks of Chinese stocks, many of whom use shell company structures.
“I believe that China-based companies that want to raise capital from American investors should disclose more of the information we need to make informed investment decisions,” Gensler tweeted.
Stocks took a pause after closing at a record high Tuesday, when the Nasdaq closed above 15,000 for the first time in its history.
Ahead of the Fed’s Jackson Hole Symposium, investors are in wait-and-see mode to determine if the Fed really will take its foot off the stimulus gas or keep chugging along in the face of a decelerating economy.
Here’s where things stand as of 6 am ET:
It seems that nothing can stop the stock market. The bulls have assumed control.
The Nasdaq surpassed the 15,000 level for the first time ever Tuesday, rising 0.5% thanks to continued strength in tech stocks like Microsoft (MSFT), Nvidia (NVDA) and Google owner Alphabet (GOOGL).
It’s been a stunning rise for the Nasdaq since stocks bottomed in late March 2020 from the brief Covid-induced selloff. According to research firm Bespoke Investment Group, this is the sixth time the Nasdaq has crossed a 1,000-point threshold since the pandemic began.
The S&P 500 gained about 0.2% and also hit a new record high. It is not far from topping the 4,500 milestone.
Is the Delta variant hurting the economy? It depends on who you ask.
A handful of businesses over the past several weeks have said customers are closing their purses. Consumer confidence fell through the floor, and retail sales sank.
Yikes, right? Well, maybe not.
Job growth remains electric. Inflation has come off its highs, and the broadest measure of the economic activity showed considerable strength in the spring.
The US economy is putting out a lot of mixed signals: While the Delta variant is weighing on economic data and consumer sentiment, the recovery is still chugging along and plenty of businesses remain optimistic about the future.
