Jobs surged. But stocks fell. We look at why.
Hey Snackers,
Can't dutch this.
That (record) 4th World Cup win for the women still frustratingly pales compared to the men's paychecks for now (fyi, here's how the $$$ adds up).
Markets made bald eagles proud, too, by touching fresh record highs during the holiday-shortened week. Stocks slid a tad Friday, even though the monthly jobs report beat expectations — we look at why below.
Who's up...
By a really, really big margin... Roku (little Roku) is America's most popular video streaming platform. A research report revealed that the binge-empowering dongle makes up 30% of all streaming devices sold in the US — that's double the share of #2 (Amazon Fire TV). Roku's edge: It sells its own dongle hardware device and it is pre-installed on many smart TVs. Dangerous combo.
Like Gump's shrimping boat... It turns out Delta is the only major US airline that doesn't have a single Boeing 737 MAX in its fleet. That means it's been gaining market share since March, when its rivals had to ground the troubled planes and cancel scheduled flights. It told investors last week that its revenues gained a more-than-expected 8% last quarter as a result.
You may climb out from your Tesla bunkers... Electric car icon Tesla doesn't report its 2nd quarter earnings for a couple more weeks. But it served up its quarterly "Vehicle Production & Deliveries" report. Good news for shareholders: Tesla is back to setting personal record numbers of cars sold, like it's supposed to be doing. That pushed shares up 7% Wednesday.
...and who's down
Liquor before weed... On Independence Day Eve, Canopy Growth (Earth's biggest cannabis company) announced the co-CEO was "stepping down," but the man himself clarified that he'd been "terminated." The reason for the firing: Corona-owning liquor legend Constellation Brands owns 37% of Canopy's shares and controls 4 of the 6 seats on Canopy's board. And Constellation wants Canopy to focus more on CBD-infused drinks, less on medical marijuana, so it canned the Co-CEO to send a message.
Technically, the stock rose last week... But we're listing Deutsche Bank as a clear debbie downer. It announced yesterday that its turnaround plan is to lay off about 20% of its workers. The pain (18K jobs total) hits the London and New York investment banking divisions, but Wall Street is relieved that it's going back to its German roots.
The June jobs report dominated (but stocks fell) — Here's why
Stick it up on the fridge... Friday we learned that the US economy added 224K new jobs in June. We'll get to why stocks fell on the good news in a sec, but here are two interesting developments we noticed:
- Manufacturing is doing its thing: Even though it's the sector most-affected by the US/China trade war, 17K jobs got created in the biz of putting things together (the most since January).
- The ironic hiring issue: Since so many Americans are getting paychecks, there's a huge demand for more workers to serve them burrito bowls, teach them to shavasana, fit them into Allbirds, etc. But with the unemployment rate close to a record low at 3.7%, finding the right available talent is tough.
Toss in a little context... and it helps understand each monthly jobs report a bit better.
- Compare it to expectations ⬆️: Economists expected 162K new jobs. We got 40% more than that in June.
- Compare it to last month ⬆️: Jobs growth plummeted in May to just 72K new jobs. We rebounded hard in June.
- Compare it to last year ⬇️: The average number of jobs added monthly over the past 3 months was 171K — that's down from the 223K we were adding during the same 3-month stretch last year. It's a sign that expansion is slowing.
It's all about the Fed's July get-together... America's central bank decides at next month's meeting what to do about interest rates — lower them to encourage borrowing and growth, or keep things put because the economy doesn't need any help (it could also increase rates, but that's not in the cards right now). Mid-trade war, investors have been expecting/hoping for the Fed to lower rates, which would be great for profits and stocks. But this strong jobs report may keep things in cruise control instead. Good news for the economy was bad-ish news for the stock market.
What else we’re Snackin’
- Work: 3 strategic ways to "unfocus" so you can focus (start with "PCD" = Positive Constructive Daydreaming)
- Life: The theoretical Tinder bio for every Myers-Briggs personality type
- Money: How hedge funds work
- Venture: Why the future of 21st century venture capital firms is to imitate '90s investment banks
- Do: How to learn faster and remember anything
This Week
- Monday: Consumer Credit Report
- Tuesday: Earnings from Levi's, Pepsi
- Wednesday: Earnings from Bed Bath & Beyond
- Thursday: Fed Chairman Jerry Powell testifies to the Senate on the central bank's interest rate plans
- Friday: Budweiser's Asia-spinoff IPO
Disclosure: Authors of this Snacks own shares of Roku and Tesla