Markets
Luke Kawa
6/4/24

US stocks rise; bonds surge on cooling labor market data


Another day, another small gain for US stocks as the S&P 500 closed up 0.2%, extending its winning streak to three.

More defensive sectors like real estate and consumer staples led the way higher on Tuesday, though Nvidia still chipped in with a 1.2% advance. Meanwhile, commodity-linked stocks bore the brunt of selling, with the materials sector down 1.1% and energy stocks falling 1%.

While US stocks have been subdued at the index level as of late, the bond market rally continues to be intense. The iShares 20+ Year Treasury Bond ETF gained 1.2%, its fourth straight daily gain. Data continue to point to a cooling in US economic activity: on the heels of yesterday’s disappointing manufacturing survey, April’s JOLTS report showed job openings fell by more than anticipated and are nearing pre-pandemic levels. Traders have gone from pricing in as little as 32 basis points of easing for 2024 last week to 46 basis points as of Tuesday.

Outside of the US, Indian stocks faced significant selling pressure, with the iShares MSCI India ETF off 6.1% after surprising early election results showed Prime Minister Modi’s party is unlikely to retain its majority. Companies seen as close to Modi fared particularly poorly.

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markets
Luke Kawa
6m

Opendoor surges as management commits to ongoing engagement with shareholders, confirms plans to expand services throughout the US

Every Opendoor shareholder I’ve spoken to in the past five days has stressed how important it is for management to be transparent, direct, and engage with shareholders. It’s a crucial part of why they believe in the stock and how they expect to receive positive reinforcement on its turnaround efforts.

Shares of Opendoor Technologies are surging double digits as the company fully committed itself to following that path.

“Opendoor Technologies Inc. (the ‘Company’ or ‘Opendoor’) investors and others should note that the Company has used, and intends to continue to use, Opendoor’s website, press releases, Securities and Exchange Commission (‘SEC’) filings, blogs, community hub and social media accounts, as well as the X (formerly known as Twitter) accounts of its Chief Executive Officer, @CanadaKaz, and @Opendoor, as means of disclosing material non-public information,” according to a filing. “Opendoor encourages investors and others to review the information Opendoor makes public in the foregoing locations as such information could be deemed to be material information.”

The company has given its retail base of shareholders the management they asked for, which propelled shares sharply higher on Thursday, and is also giving them the communications they’re demanding.

The filing also confirmed the plan to expand throughout the US, as announced by CEO Kaz Nejatian in a tweet on Tuesday:

Luke Kawa
20m
What explains the divergence between US consumer spending and job growth?

Look to income (not jobs!), distributional impacts, the aging population, and the stock market.

Vicky Pattison At Battersea Power Station Unveiling Veimagined The Thinker Statue, In Celebration Of The New McCain Vibes
Nia Warfield
33m
Workday rallies on positive comments from new investor Elliott, buyback boost, and analyst upgrade

The HR tech giant is winning Wall Street’s support as the company refreshes its growth playbook.

Workday Headquarters Building
markets
Matt Phillips
1h

Duolingo slips after Citi analysts trim price target and product announcements receive muted response

Duolingo dropped in early trading after Citi analysts snipped their price target to $375 from $400, citing, in part, some disappointment with announcements at Duolingo’s Duocon convention Tuesday, as well as deceleration in the growth of daily active users (DAUs) that continued into August.

Among other changes, the company announced improvements to its video call service — where language learners can practice their target language with an AI version of Duolingo characters — as well as enhanced offerings of its chess product, which it will expand to Android and offer in more languages, including Chinese.

“This year’s product announcements had a lower profile,” Citi analysts wrote, adding that they still “expect the video call improvements, better engagement drivers, and broader use case for chess to help drive better user growth trends.”

Still, Citi’s analysts pointed to decelerating year-on-year growth in key app metrics like downloads for their price target cut. Data from third-party groups that track app usage shows that the slowdown in the growth rate of daily active users, which seemed to stem from a social media backlash to an artless LinkedIn post from the company, continued through August.

“Duolingo DAU growth trajectory remains [the] key investor debate,” analysts at JPMorgan wrote in a note on Duolingo published Wednesday.

Through the end of August, DAU growth was 25% year on year, according to third-party data. That’s down from 31% in July, JPM said.

Luke Kawa
3h
Nvidia slumps on report of wide-ranging ban on chip sales by Chinese regulators

It’s the latest in a series of signals that China is actively pursuing an Nvidia-less AI boom that puts its domestic capabilities to the test.

Nvidia conference with Jensen Huang

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