What we covered here today:
- Markets check: US stocks finished lower, snapping a 3-day winning streak.
- Uber slides after Amazon (AMZN) invests in food delivery rival.
- Luckin Coffee (LK) surges nearly 50% in its Wall Street debut.
Ad Feedback
What’s moving markets today: May 17, 2019
Video Ad Feedback
Luckin Coffee CFO: Focused on bringing down costs
2:40
• Source:
CNN Business
16 Posts
US markets close lower, snapping three-day winning streak
US markets ended the day lower Friday.
The losses snap a three-day winning streak held by all of the major indexes.
Wall Street has been gripped by fear about the US-China trade war. There wasn’t any progress between Thursday and Friday on arranging for a new round of trade talks between Washington and Beijing, people familiar with the matter told CNN.
Luckin Coffee (LK) — a Starbucks rival in China — surged on its first day of trading on the Nasdaq. The stock ended the day at $20 per share, above its opening price of $17 per share.
Cray (CRAY) shares surged 23% after HP Enterprise (HPQ) announced that it would buy the legendary tech company for $1.3 billion.
Lionsgate soars on report CBS wants to buy Starz
Does the Eye Network want to add cable TV hits “American Gods,” “Outlander” and “Power” to its roster? Tech site The Information reported Friday that CBS made a $5 billion offer to acquire Starz, the media company that merged with TV and movie studio Lions Gate in 2016.
Shares of the two classes of Lions Gate stock (LGFA) (LGFB) surged more than 10% on the report. CBS (CBS) was flat.
The Information said that Lions Gate turned down the offer, which makes sense. Lions Gate only bought Starz a little more than 2 years ago. It paid $4.4 billion. So a $5 billion paycheck from CBS would represent less than a 6% premium.
So it will be interesting to see how badly CBS CEO Joseph Ianniello wants Starz. Shares of CBS are down more than 6% in the past year in the wake of the ouster of longtime chief Les Moonves following a sexual harassment scandal.
The stock is lagging ABC owner Disney (DIS) and NBC Universal parent Comcast (CMCSA). The Lions Gate chatter also comes at a time when there is rampant speculation that CBS may want to reunite with its former movie studio sibling Viacom (VIAB).
Short seller: Beyond Meat stock is 'Beyond Stupid'
Beyond Meat has been a stunning success on Wall Street. The plant-based meat company’s shares have nearly tripled in value since going public on May 2. But that’s leaving a bad taste in the mouth of one prominent short seller.
Citron Research, the investing firm run by Andrew Left, tweeted Friday that the stock is now “beyond stupid” and predicted that shares would drop to $65. That’s about 30% below where Beyond Meat (BYND) closed on Thursday. The stock fell 6% on Friday.
Interestingly, Citron seems to think that Beyond Meat’s big rival, Impossible Foods, might also be considering an IPO. If that happens, Left seems to suggest that Beyond Meat’s stock could tank just like ridesharing #2 Lyft (LYFT) did once Uber (UBER) went public.
Markets are lower at midday
Here’s where the markets stand at the midway trading point:
The Dow is a mix of red and greens with Dow Chemical (DOW) losing the most. It’s down 2.4%. Boeing (BA) and UnitedHealth (UNH) are the top gainers, with both climbing more than 1.6%.
Luckin Coffee (LK) made its trading debut on the Nasdaq. It surged 50% above its opening price of $17 per share, but has clawed back some of its gains.
Luckin Coffee surges in trading debut
The debut of Luckin Coffee (LK) on the Nasdaq was a strong brew.
The stock opened at $25 per share — surging nearly 50% above its $17 per share opening price.
Luckin Coffee CFO says technology will help it quickly become profitable
Luckin Coffee (LK) believes it can take on Starbucks (SBUX) in China because it has developed a new tech-heavy retail model.
For example, its stores don’t accept cash – customers can only pay through the Luckin app, which offers loyalty bonuses.
CFO Reinout Schakel spoke to CNN’s Julia Chatterley today. The Chinese company is set to go public on the Nasdaq today.
Schakel said he believes Luckin will become profitable “rather quickly” but declined to comment on exactly when.
Uber slides after Amazon invests in its food delivery rival
Uber shares slid 2% following news that Amazon is investing in an Uber Eats rival.
Deliveroo is one of the United Kingdom’s top restaurant delivery services and announced Friday that it had raised $575 million. The funding round was led by Amazon.
Amazon’s (AMZN) backing will bolster Deliveroo in its battle with Uber (UBER) Eats and others in the fiercely contested market.
Uber’s stock has been on the rebound since Monday when it closed nearly 11% lower. The stock has closed higher each day since then and recouped that loss.
Trade war fears are back. And stocks are dropping
Wall Street is once again under pressure from the US-China trade war.
The losses leave all three major indexes on track to snap a three-day winning streak. Investors are focused on rising trade tensions between the United States and China after the Trump administration imposed tough sanctions on Huawei.
Speaking of the trade war, Deere (DE) dropped 5% after reporting disappointing earnings and lowering its outlook. The tractor maker blamed rising trade tensions, specifically the impact on soybeans.
Chinese search engine Baidu (BIDU) tumbled 15% after suffering its first loss in 15 years due to weakness in online advertising. Pinterest (PINS) plummeted 14% as its debut earnings report revealed more red ink than investors had been bracing for.
John Deere's stock dented by trade war fears
John Deere (DE) shares are sliding following a skittish earnings report, our Paul R. La Monica notes:
Here’s what Deere CEO Samuel Allen said:
Nvidia's post-earnings rally fades
Nvidia’s (NVDA) first quarter earnings beat projections, which sent its shares 7% higher.
But the rally appears to be short-lived: The stock clawed back some of those gains and is now only up 1.5% in premarket trading.
The chipmaker reported revenue of $2.22 billion, slightly above analysts’ expectations.
Pinterest shares are bellyflopping after it reveals larger-than-expected loss
Pinterest (PINS) shares are falling 15% in premarket trading after a rough earnings debut.
The company reported a steeper-than-expected loss of $41.4 million for the first three months of 2019.
Prior to the earnings’ release, Pinterest had seen shares soar more than 50% above its IPO price since its Wall Street debut last month.
Amazon bets on Deliveroo
UK food delivery company Deliveroo said today that it had raised $575 million in a new round of funding led by Amazon (AMZN).
It’s another big move into food from the internet retailer, and expands Amazon’s global reach.
Shares of Deliveroo competitor Just Eat (JSTTY) fell 7% in early trading, before rebounding slightly.
Uber (UBER) is also a big competitor in the UK food market through its Uber Eats program.
The London-based company, which operates in 14 countries and territories around the world including Australia, France and Germany, has now raised more than $1.5 billion since it was founded in 2013.
Checking in on global markets
Solid earnings and economic news have helped prop up US markets over the last few days.
That’s not the case in Europe and Asia today, where the escalating US-China trade war is once again weighing down shares.
A new US barrage against Huawei this week has reduced the chances of an early resolution to the damaging dispute between the world’s top two economies.
- 🌏Hong Kong’s Hang Seng index fell almost 1.2% Friday, while the Shanghai Composite index dropped nearly 2.5%. South Korea’s KOSPI index shed 0.6%. Japan was the exception, with the Nikkei rising 0.9%.
- 🌍European markets also opened lower. Britain’s FTSE lost almost 0.2%. Markets in Germany and France fell 0.6% and 0.3%, respectively.
- 🌎US markets are also set to open lower following a third consecutive day of gains. The Dow is set to open 88 points lower, falling 0.3%. The Nasdaq could drop 0.5%, and the S&P 500 is poised to lose 0.4%.
Baidu posts its first loss in 15 years
Chinese search engine Baidu (BIDU) has reported a net loss of 327 million yuan ($47 million) for the three months of the year, sending its stock down more than 10% in premarket trading and wiping nearly $5.8 billion off its market value.
That compares with a profit of 6.7 billion yuan during the same period last year, and marks the company’s first loss since it went public in 2005.
CEO Robin Li said the sharp drop in earnings was due in part to China’s broader economic slowdown and increased government scrutiny of online content, which had hurt the company’s core business.
Online marketing accounted for 73% of Baidu’s quarterly revenue of $3.6 billion.
Li, during an earnings call, said:
The pound is being punished again
Brexit uncertainty is back on the menu in the United Kingdom, driving the pound down Friday below $1.28 to its lowest level against the dollar since January.
It has also notched its longest string of losses against the euro since 2000, according to currency trading firm FXTM.
UK Prime Minister Theresa May is now expected to lay out a timetable for her departure following a fourth attempt to win parliamentary support for her Brexit plan in early June. This sets up questions about who will succeed her.
The risk of the UK crashing out of the EU in October without a deal is also rising again after talks between May and the opposition Labour Party collapsed on Friday.
Ad Feedback
Ad Feedback
Ad Feedback
