The trading week is over. Records were broken – twice! Here’s what’s next for investors.
Stocks closed higher on Friday, as both the S&P 500 and the Nasdaq Composite rallied to record closing highs.
Both the S&P and the Nasdaq had previously set record closing highs on Tuesday.
Ford (F) was the strongest performer in the S&P, rising nearly 11% after posting earnings report late Thursday. The automaker also said that the Department of Justice is opening a criminal investigation into the company’s emissions testing practices.
US oil futures closed 2.9% lower on Friday, shaken after President Donald Trump’s earlier comment that he called the Organization of Petroleum Exporting Countries (OPEC) to bring down its price.
West Texas Intermediate settled at $63.30 a barrel for June futures and $63.38 for July.
The price of Brent Crude, the international measure, dropped 3% on Friday, settling at $71.15 per barrel for June and $71.63 for July. With the end of the month approaching, futures contracts are about to roll into the next month.
About half-way through Friday’s trading session, stocks remain mixed.
The Dow and the S&P 500 are both up 0.1%, while the Nasdaq is down 0.1%.
For the week, the Dow is on track for a 0.4% loss, while the S&P has so far climbed 0.7% after setting a new all-time closing high on Tuesday. The Nasdaq is looking at a 1.5% gain this week, also after hitting a new record closing high.
The strongest gainer in the Dow was Procter & Gamble (PG), up 2.2%, while the weakest stock was Intel (INTC), dropping 10% after this morning’s earnings.
S&P component Ford (F) was also on the rise, climbing 9% after reporting first quarter results. Additonally, the company disclosed that the Department of Justice is running a criminal investigation into its emissions testing protocols after the company had self-reported concerns in February.
Uber’s latest S-1 filing reveals the company will give some drivers as much as $40,000 in a one-time cash “appreciation award.”
The company’s initial paperwork showed that it had planned to give drivers payments based on how many trips they’ve made since joining Uber. But Uber added two new payment tiers in the new filing.
Payments will be based on how many trips drivers have made since they started driving for Uber:
Additionally, to be eligible for the bonuses drivers must have completed at least one trip this year and be in good standing with the company.
Drivers eligible for the appreciation awards will also have the option to buy shares ahead of the IPO.
Lyft also rewarded some top drivers with cash bonuses of $1,000 or $10,000, depending on certain trip thresholds. Drivers had the option to use the money to buy shares in that company as well.
Market watchers are digesting the whopping 3.2% first quarter US GDP report from this morning.
The headline number was strong and beat consensus estimates, but it is also just the first reading and will likely get revised. Strong economic growth could be cause for concern for stock investors worried that inflation will rise too.
That in turn could make the Federal Reserve rethink its recent action to take the foot off the gas for further interest rate hikes. And rising interest rates typically weigh on stocks.
But the core PCE number in the GDP report, which measures personal consumption expenses, was weaker than expected at 1.3%, keeping immediate inflation worries at bay.
After all, the Fed’s mandate is to keep inflation around 2%, and that’s apparently a long way away.
All in all, it was “a good report for equity investors,” said Minh Trang, senior trader at Silicon Valley Bank.
Nevertheless, stocks seem unimpressed amid further earnings reports. The Dow and the S&P 500 are slightly stronger, while the Nasdaq is hovering in negative territory. Next week’s Fed meeting might give us clues for what’s next.
Amazon’s (AMZN) announcement that it’s planning to make one-day shipping standard for Prime members is sending stocks of its retail rivals lower:
Amazon CFO Brian Olsavsky didn’t specify when faster shipping would be standard for all Prime customers, but he said the company expects to “make steady progress quickly and through the year.”
Oil giant Chevron grew its production by 7% in the first quarter, thanks in large part to Texas’ Permian Basin.
The No. 2 US oil company reported first-quarter earnings that beat expectations. But profit was down 27% due to “weaker” refinery operations.
Chevron’s (CVX) revenue dipped 7%, trailing Wall Street’s view.
Meanwhile, Chevron expressed confidence about its takeover deal for Anadarko Petroleum (APC) – despite the bidding war that has emerged over the oil driller.
However, Chevron did not sweeten its offer for Anadarko despite the fact it has been outbid by Occidental Petroleum (OXY).
Executives instead talked up why they believe Anadarko would be a better fit with Chevron than Occidental. They pointed to Chevron’s track record of integrating new companies and the fact that it’s a “world-class” operator of LNG.
Chevron did concede that the deal terms could theoretically change. While Occidental offered to pay 50/50 in cash and stock, Chevron’s deal is more weighted towards stock.
“Clearly we have the capacity to have alternative structures,” Chevron chief financial officer Pierre Breber said. “We could have put more cash in if that’s what Anadarko wanted to do, but we agreed to where we ended up.”
US oil futures dropped 3.9% this morning following reports that President Donald Trump said he called the Organization of Petroleum Exporting Countries (OPEC) to bring down prices.
US oil futures were last at at $62.65 per barrel. Brent crude futures were down 3.3% at $71.90 per barrel.
It has been a volatile week for oil prices. On Monday, prices rallied after the Unites States said it would no longer grant sanctions exemptions to countries buying oil from Iran. This affects China, India, South Korea, Japan and Turkey.
On the week, US prices are down 2%, according to Refinitiv.
US stocks edged lower at the start of Friday trading as investors digested a stronger-than-expected first quarter GDP growth print.
Companies that reported before the bell included Exxon Mobil (XOM), which posted an unexpected profit drop. Its shares fell 2.4%
Intel (INTC) shares were also lower, falling 8.7%, after the chip maker slashed its full-year guidance.
Slack is the latest company planning to go public, but it’s doing so with an unconventional approach.
The workplace messaging service filed paperwork on Friday to go public through a direct listing, the same method used by Spotify (SPOT). Slack will list shares directly on a stock exchange without relying on underwriters to help assess demand and set a price.
The downside of this approach is thought to be that the stock may suffer more volatile trading. But Spotify largely disproved this with relative stability in its first days on the market.
Slack expects to trade on the New York Stock Exchange under the stock ticker “SK.”
Read the full story about Slack’s path to the stock market here.
A new regulatory filing from Tesla (TSLA) reveals that it’s hired a law firm to lobby for a new bill that would expand federal tax credits for electric car buyers.
The current law lets buyers receive a $7,500 tax credit, but it phases out after an automaker sells 200,000 vehicles.
The proposed legislation, called “Driving America Forward Act,” would raise the cap, so that another 400,000 vehicles sold by each manufacturer will be eligible for a $7,000 tax credit.
The economy grew at a much better than expected rate in the first quarter, the Commerce Department reported Friday, accelerating out of a slow start to the year.
The Bureau of Economic Analysis reported that gross domestic product grew at a rate of 3.2%, substantially above the projected 2.1%, buoyed by strong state and local government spending, consumer spending, and business investment.
Read the full story on the buoyant first quarter GDP reading here.
US stock futures bounced higher after the first quarter GDP report showed the US economy expanded 3.2% in the first quarter, more than expected.
Consensus forecasts had projected 2% of GDP growth, according to Refinitiv.
With a little less than an hour to go until the market opens, futures for the Dow, S&P 500 and Nasdaq Composite were all pointing higher, with the Nasdaq leading the pack.
ExxonMobil, the king of the surging oil industry, is not firing on all cylinders.
The world’s largest public oil company suffered a 49% drop in first-quarter profit despite booming shale oil production. Exxon’s (XOM) per-share profit of 55 cents badly missed the Street’s view of 70 cents.
Blame Exxon’s vast refinery business. The company swung to a downstream loss of $256 million due to higher scheduled maintenance and lower margins. Exxon also blamed swings in Canadian oil prices.
Wall Street penalized Exxon, sending its stock 2% lower in premarket trading Friday.
The good news is that Exxon’s oil and gas production continues to recover from a yearslong slump.
Exxon reported a 2% increase in oil-equivalent output. Upstream liquids production jumped 5% – led by a spike of nearly 140% from the Permian Basin. Exxon was late to the US shale boom but has since played catch-up by focusing on the Permian, the West Texas shale hotbed.
But that growth doesn’t come cheap. Exxon’s capital and exploration spending surged 42% in the first quarter, countering the industrywide trend toward capital discipline.
The grounding of its Boeing 737 Max fleet and rising oil prices will cost American Airlines (AAL) nearly $1 billion dollars.
These troubles forced the airline to cut its full-year earnings forecast. It did turn a first-quarter profit.
American’s shares are down 2% in early trading.
PayPal (PYPL) is buying $500 million worth of Uber’s common stock, the company said in an updated regulatory filing.
The company also said it’s offering 180 million shares at between $44 and $50 per share, valuing the company at $84 billon on the high end.
Uber filed paperwork to go public earlier this month in what is likely to be one of the biggest public offerings ever for a technology company.
The listing follows an aggressive overhaul of the company’s internal culture.
Intel (INTC) shares sunk 8% in premarket trading after it slashed its full-year revenue forecast and issued a warning on its sales in China.
Intel CEO Robert Swan said in an earnings call Thursday that “China headwinds have increased, leading to a more cautious IT spending environment.” He added that its full-year revenue forecast will be 3% lower than expected from its previous estimate.
This is Swan’s first full quarter as Intel’s permanent CEO. He took over as temporary chief after former CEO Brian Krzanich was forced to resign in June 2018 because of a “past consensual relationship with an Intel employee.”
Amazon’s profit machine shows little sign of slowing down.
The company on Thursday reported:
For years, Amazon was known for bleeding money as it invested heavily in its businesses and rapidly increased revenue.
Now, it has entered a new era with comparatively sluggish sales growth, but a consistently profitable business.
Shares of Amazon (AMZN) initially rose 3% in after-hours trading Thursday following the earnings report, before giving up some of the gains.
The US Bureau of Economic Analysis is due to report GDP on Friday, and economists polled by Refinitiv are now projecting 2.1% annualized growth for the first quarter.
That would be only slightly lower than the previous quarter’s 2.2% — which followed two robust quarters in mid-2018.
Some forecasters are even more rosy: The Federal Reserve Bank of Atlanta’s GDPNow tracker is running at 2.8%, up from 0.3% at the beginning of March.
What a difference a few months makes: Just a few months ago, forecasters saw trouble ahead for the American economy.
