DJIA: 52-wk: +2.36 % YTD: 1.59% Wkly: -1.24 %
S&P 500: 52- wk: +0.31% YTD: +7.73% Wkly: -0.80%
NASDAQ: 52-wk: +0.75% % YTD: +16.90% Wkly: +0.07%
SPDR S&P Regional Bank ETF: 52- wk: -38.35% YTD: +34.71% Wkly: +10.10%
April’s employment report showed a 253,000 increase in nonfarm payrolls, roughly a third more than the consensus of economists’ forecasts. Even after Friday’s solid jobs report, interest rate futures markets remain convinced that the Fed will have to begin to take back its rate hikes starting with its September 19-20 meeting.
Art Cashin, Director of Floor Operations at UBS, shares his comments:
Our savvy friend Dennis Gartman had cautioned that the non-farm payrolls for April/May often contained the largest Birth/Death adjustments for the year. Another savvy friend, Peter Boockvar pointed out that Dennis was spot on, not only was it large adjustment, but it was larger than any of the recent adjustments at this time of year. Also, as Peter noted, the prior 2 months’ pay was marked down rather significantly. So non-farm payrolls really looked like something more like 140,000 after you made some of the adjustments.
Bank Shares Rise:
PacWest soared over 80%, after falling over 50% on Thursday. Western Alliance’s share price rose almost 50%, also recouping a chunk of its drop the day before. “We thought the bank shares were unfairly punished over the past week, and even before that,” said Matt Peron, the director of research at Janus Henderson, an asset manager. “The rally makes sense because they were oversold.”
Even with Friday’s bounce, PacWest remained set to end the week having lost nearly half its market value. Western Alliance ended roughly a quarter below where it started the week. After the close on Friday, the Fed released data showing that deposits at commercial banks in the US declined slightly in the week that ended April 26.
The SPDR S&P Bank exchange traded fund (KRE) dropped 8.1% last week, despite the sale of First Republic Bank to JPMorgan Chase.
Stocks rose Friday, following earnings from Apple and a stronger-than-expected April jobs report.
Apple AAPL +4.69% (ticker: AAPL) closed up 4.7% after the iPhone maker reported fiscal second-quarter earnings and sales that beat analysts’ estimates. Most of the revenue beat was from stronger-than-expected sales of iPhones, which generated revenue of $51.3 billion in the quarter, up 1.5% from a year earlier. Wall Street expected quarterly iPhone sales of $48.7 billion.
Carvana (CVNA) reported a first-quarter loss that narrowed from a year earlier as the company said its cost-cutting campaign will put it in the black, excluding some expenses, for the current second quarter. The stock soared 24%.
Regional bank shares were climbing after sinking Thursday. PacWest (PACW) gained 82%, while Western Alliance (WAL) rose 49%, Comerica (CMA) jumped 17%, Zions Bancorp (ZION) was up 19%, KeyCorp (KEY) rose 10%, and First Horizon (FHN) jumped 8.8%.
Redfin (RDFN) rose 33% a day after the brokerage and real estate listings company posted a narrower-than-expected loss for its first quarter. On Friday, it was upgraded to Neutral from Sell by analysts at Compass Point.
Lyft (LYFT) was down 19% after the ride-share company issued a second-quarter revenue forecast that was shy of analysts’ expectations. The company’s forecast for adjusted Ebitda of $20 million to $30 million also missed estimates.
Coinbase COIN +18.33% (COIN) stock was up 18%, a day after the cryptocurrency broker posted a first-quarter loss that was much narrower than expected. Coinbase’s performance received a significant boost from Bitcoin, which has rallied in 2023, encouraging trading of the currency.
Bill Holdings (BILL) gained 18% after the bill-payment automation company received price-target raises from Wall Street firms. On Thursday, the company posted better-than-expected adjusted earnings for its third quarter.
First-quarter revenue at DraftKings DKNG +15.34% (DKNG) easily topped Wall Street forecasts, and shares of the sports-gambling company were up 15%.
Live Nation Entertainment
(LYV) gained 15% to $77.16 a day after the entertainment company posted a narrower-than-expected loss for its first quarter. On Friday, Benchmark analysts raised their price target on the stock to $110 from $105.
Richie Naso
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