Stocks waver after jobs report smashes expectations

June 7, 2024

7 minutes read

US stocks wobbled on Friday, after a jobs report seen as pivotal to expectations for interest-rate cuts showed much stronger hiring growth than expected.

The S&P 500 (^GSPC) rose 0.1%, while the Dow Jones Industrial Average (^DJI) gained 0.2%, coming off a lackluster session Thursday for the three major gauges. The tech-heavy Nasdaq Composite (^IXIC) remained in the red, hovering just below the flatline.

Investors have lifted stocks on the expectation that further data would suggest an economic cooldown. But the Labor Department report offered more evidence that parts of the economy are too hot for the central bank’s fight against inflation, feeding into a narrative of keeping rates higher for longer.

The highly anticipated May jobs report reinforced the idea that pulling back rates from their two-decade high likely won’t come until the Fall.

The US economy added 272,000 jobs in May, smashing expectations. However, the unemployment rate did tick higher, rising to 4.0%.

Elsewhere in markets, the wait is also on for a livestream apparently promised by GameStop (GME) booster Keith Gill, aka “Roaring Kitty.” The event, scheduled for noon ET Friday, would be the first live YouTube appearance by Gill since he helped ignite the meme stock rally three years ago.

GameStop shares closed 47% higher on Thursday, but they dropped sharply after the video game retailer said it would sell up to 75 million shares and said sales declined in the first quarter.

Also on deck is the completion of Nvidia’s (NVDA) 10-for-1 stock split, expected after the market closes. A midweek rally briefly vaulted the AI chipmaker to a $3 trillion valuation, but its shares have lost steam as short bets against the company pile up.

Live9 updates

Fri, June 7, 2024 at 6:46 PM GMT+1

Stocks trending in afternoon trading

Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Friday.

GameStop (GME): Shares of the video game retailer and meme stock extraordinaire fell 35% in afternoon trading, following the kickoff of the highly anticipated livestream from bullish retail investor Keith Gill. The stock was halted for volatility numerous times during the stream, in which Gill said he believes in the company’s management.

AMC (AMC): The meme stock pull back spilled over into other names Friday, as shares of the movie-theater chain, dropped 15%. The stock has sunk about 12% so far this year, failing to ride the same momentum as GameStop.

Oddity Tech (ODD): The beauty and wellness company that uses AI rose more than 20% Friday following an announcement that the board of directors approved a share buyback program of a maximum of $150 million of the Company’s Class A Ordinary Shares. The company also boosted its Q2 outlook.

DocuSign (DOCU): The software company specializing in electronic agreements shed 8% after reporting second quarter billings guidance that fell below Wall Street expectations. Investors looked past the more positive updates, however, as the company beat earnings estimates and boosted its stock repurchase program by up to $1 billion of outstanding common stock.
Fri, June 7, 2024 at 6:07 PM GMT+1

GameStop down 35% as retail trader Keith Gill says he believes in company’s management

GameStop (GME) stock was halted for volatility numerous times during the highly anticipated livestream of retail investor Keith Gill.

“Can I talk about GameStop? The funny thing is that I have a lot of the same feelings about everything, you know?” said Gill during the livestream, appearing in front of a Yahoo Finance screen.

“It becomes a bet on the management,” said Gill. “Ryan Cohen and his crew — that’s what folks should be focused on.”

Cohen is the chairman and CEO of GameStop.

“I see enough where I believe this guy may be able to do it,” said Gill, adding a disclaimer that his video is not financial advice.

Gill also confirmed the screenshots posted online this week of a massive position in GameStop are his own.

The stock had opened lower on Friday and was also halted for volatility earlier in the session after GameStop reported quarterly results that missed analyst estimates and announced a stock sale.

The stock was down 35% as of 1 p.m. Eastern Time.
Fri, June 7, 2024 at 5:39 PM GMT+1

Stocks turn green in afternoon trading, Keith Gill kicks off livestream

All three indexes were up Friday afternoon, recovering from earlier losses after a crucial jobs report came in hotter than expected.

Investors were also greeted with the reappearance of bullish retail investor Keith Gill, who began a YouTube livestream in the afternoon session. The stream marked his first live appearance on the channel since the investor helped ignite the meme stock rally in 2021 via his bullish videos and posts about the video game retailer GameStop (GME).

The S&P 500 (^GSPC) rose 0.2%, while the Dow Jones Industrial Average (^DJI) gained 0.1%, coming off a lackluster session Thursday for the three major gauges. The tech-heavy Nasdaq Composite (^IXIC) also rose 0.1%.
Fri, June 7, 2024 at 4:45 PM GMT+1

GameStop investors brace for Roaring Kitty livestream

GameStop shares are down more than 18% Friday just minutes before a highly anticipated livestream from “Roaring Kitty,” an alias used by bullish retail investor Keith Gill.

Gill’s YouTube account is scheduled to broadcast a livestream at noon ET following an announcement from the video game retailer showing quarterly results that missed analyst estimates and news of a stock sale.

As Yahoo Finance’s Ines Ferré reports, GameStop filed to sell up to 75 million additional shares on the heels of last month’s sale of 45 million shares, bringing in about $930 million in proceeds.

The announcements followed the stock’s 47% surge in the prior session after “Roaring Kitty” scheduled his YouTube live stream. Friday’s event will mark the first live appearance on the channel since the investor helped ignite the meme stock rally in 2021 through his bullish videos and posts about the video game retailer.

Gill’s actions and pronouncements could serve as another catalyst for the stock and other names in the meme stock basket.

Earlier this week, an account believed to be associated with Gill revealed a $175 million bet on GameStop. Shares surged following that post too.
Fri, June 7, 2024 at 4:09 PM GMT+1

The jobs report is a ‘Rorschach blot’ for mixed interpretations

The US labor market added more jobs than expected in May, but the report also contained data for both optimists and pessimists, in what Bill Adams, chief economist for Comerica Bank, called a Rorschach blot.

Data from the Bureau of Labor Statistics released Friday showed the labor market added 272,000 nonfarm payroll jobs in May, significantly more than the 180,000 that was expected.

But the unemployment rate rose to 4% from the prior month’s 3.9%.

“Optimists about the growth outlook will see solid payrolls growth as a sign the expansion continues unabated,” said Adams in a note on Friday. “Pessimists will focus on the unemployment rate’s uptick to the highest since early 2022, the increase in part-time employment, and the dip in temporary employment, which is often a leading indicator of broader job market weakness.”

How market observers interpret how the latest jobs figures influences interest rate outlooks.

“Most Fed policymakers will see May’s strong payrolls growth and uptick in earnings as a sign that immediate rate cuts are not necessary,” Adams noted. But the Fed will also see the increase in unemployment over the past year as a sign that inflation is on course to moderate further, he added.

“If core inflation continues to slow in the next few months, the Fed will likely feel comfortable beginning to reduce interest rates with a quarter percentage point rate cut at their September meeting.”
Fri, June 7, 2024 at 3:15 PM GMT+1

Stocks trending in morning trading

Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday.

GameStop (GME): Shares of the video game retailer and meme stock extraordinaire fell 19% in morning Friday after it reported quarterly results that missed analyst estimates and announced a stock sale just hours before a highly anticipated livestream from “Roaring Kitty,” an alias used in the past by bullish retail investor Keith Gill.

DocuSign (DOCU): The software company specializing in electronic agreements shed 8% after reporting second quarter billings guidance that fell below Wall Street expectations. Investors looked past the more positive updates, however, as the company beat earnings estimates and boosted its stock repurchase program by up to $1 billion of outstanding common stock.

Lyft (LYFT): Shares of the ride-hailing company rose 3% Friday morning following the company’s decision to revise its growth forecasts upward and reaffirm its guidance for the second quarter. Lyft now anticipates around 15% growth in bookings over the next three years.

Vail Resorts (MTN) The mountain resort dropped 13% after the company missed earnings expectations and cut its full-year EBITDA outlook. CEO Kirsten Lynch pointed to lift ticket visitation not rebounding in the spring season as a reason for the lowered guidance.
Fri, June 7, 2024 at 2:33 PM GMT+1

Stocks slide as rate cut expectations fall

The May jobs report, which came in hotter than expected, put another dent in the narrative that the Federal Reserve will soon cut interest rates. The latest reading offered another signal that defied previous signs of a slowdown in the economy.

The S&P 500 (^GSPC) fell 0.3%, while the Dow Jones Industrial Average (^DJI) shed 0.2%, coming off a lackluster session Thursday for the three major gauges. The tech-heavy Nasdaq Composite (^IXIC) dropped around 0.4%.
Fri, June 7, 2024 at 12:32 PM GMT+1

Eyes on Robinhood

Robinhood (HOOD) remains on several impressive streaks.

For one, the stock price: It’s up 27% in the last 30 days. And two, the flow of news — from debuting a new credit card and reporting a solid first quarter to spending $200 million yesterday to buy crypto exchange Bitstamp.

“This is a strategic move by HOOD to expand its crypto business, and we believe validates our thesis that HOOD is a great way to seek crypto equity exposure at the commencement of an exciting new crypto cycle,” said Bernstein’s Gautam Chhugani this morning.

I grabbed coffee with Robinhood’s co-founder and CEO Vlad Tenev yesterday afternoon post Bitstamp deal. The guy has his swagger back, but you can tell he has gained a whole new level of experience having gone through what he did several years back — from layoffs to testifying on the GameStop (GME) insanity. Keep an eye on what the company does nevlad tenevxt in wealth management.

Our last chat below.
Fri, June 7, 2024 at 12:16 PM GMT+1

Reminder as you read the jobs report

The market still wants to believe in rate cuts for 2024.

So keep that in mind as you navigate today’s jobs report and plot through how it may influence Fed policy.

Good point by Deutsche Bank’s Jim Reid this morning after the ECB’s rate cut yesterday:

“And even though the tone was a bit hawkish in several respects, it now makes them the fourth G10 central bank to have cut rates, after Canada, Sweden and Switzerland. In turn, the move has cemented the idea that the global monetary policy cycle is moving towards an easing mode, with investors expecting further cuts on the horizon. So it marks a big shift from much of the last couple of years, when central banks were rapidly hiking rates to try to bring down inflation.”