Categories: Economic News

Stocks fall as Wall Street’s summer rally falters

Shares open flat

Stocks opened flat on Thursday, with the latest Dow down 0.05%, or 17 points. The S&P 500 fell 0.06%, while the Nasdaq Composite fell 0.23%.

— Samantha Subin

Verizon shares fall

Verizon shares fell about 1.7% in premarket trading Thursday after MoffettNathanson downgraded the telecommunications company.

The company moved its rating on Verizon to underperform and cut its price target, citing competition in the industry weighing on the stock.

Read more at CNBC PRO.

—Carme Reinicke

Jobless claims fall for the week ending August 13

Initial jobless claims released on Thursday fell by 2,000 to 250,000 in the week ending August 13. Economists polled by the Dow Jones had expected 260,000.

Estimates were also revised up to 252,000 two weeks ago.

— Samantha Subin

Freshpet Gets Buy Rating at Piper Sandler, Shares Rise

Shares of pet food maker Freshpet rose 2% after Piper Sandler initiated the company with a buy rating and a price target that implies a 46% upside from Wednesday’s close.

“Freshpet sales have faced headwinds as pet parents increasingly treat their pets as part of their human family and feed them accordingly,” analyst Michael Lavery wrote in a note from Thursday.

CNBC Pro subscribers can read the full story here.

—Fred Imbert, Carmen Reinicke

Wedbush downgrades Bed Bath & Beyond as Cohen plans to sell stake

Ryan Cohen’s filing to sell his entire stake in Bed Bath & Beyond means it’s time for investors to sell, too, according to Wedbush.

Analyst Seth Basham downgraded the stock to underperform from neutral and said in a note to clients that Bed Bath & Beyond’s valuation is “disconnected” from fundamentals. Basham cited the company’s high cash burn and possible future restructuring as areas of uncertainty.

Shares of Bed Bath & Beyond are down 10% in premarket trading, though they have pared their losses since Wednesday evening, when Cohen’s filing was officially released.

– Jesse Pound

Kohl’s shares sink after guidance cut

People shop at Kohl’s department store amid the coronavirus outbreak on September 5, 2020 in San Francisco, California.

Liu Guanguan | China News Service | Getty Images

Shares of Kohl’s sank more than 8% in premarket after the retailer cut its outlook for the year. The company beat analysts and lowered expectations on the top and bottom lines, but said inflation is putting pressure on middle-income consumers.

At the same time, Kohl’s said shoppers are spending less money per transaction. The retailer also expects net sales to decline 5% to 6% for the fiscal year.

– Samantha Subin, Lauren Thomas

Jobless Claims, Philadelphia Fed Readings Will Get Attention

Investors will take a look Thursday morning for the latest jobs news, as well as a manufacturing reading that could generate more interest than usual.

Initial jobless claims for the week ending Aug. 13 are released at 8:30 a.m., with the Dow Jones estimated at 260,000. That would be only a slight decline from the previous week, but also representative of an upward trend that began in April.

The latest business outlook survey from the Philadelphia Fed, which will measure manufacturing activity in the region for August, will also be released.

It’s generally not a major data point for the market, but it will be watched a little more closely after the New York Fed’s Empire State manufacturing survey on Monday showed an impressive 40-point drop to -31.3. Regional manufacturing surveys are notoriously volatile, so the Philadelphia reading could help show whether the New York survey was an anomaly or signaled a broader slowdown.

Also out on Thursday are weekly export sales at 8:30 a.m., followed by existing home sales and the Conference Board’s index of leading economic indicators at 10 a.m.

—Jeff Cox

Elanco Animal Health falls after downgrade

Shares of Elanco Animal Health fell more than 2% in premarket after Morgan Stanley downgraded the company to equal Wight from overweight.

“Overall, our previous overweight thesis was based on a turnaround story materializing with a significant earnings ramp, where we were optimistic it would not disappoint,” analyst Erin Wright said in a note. “Now we’re moving to the sidelines with the creation of company-specific headwinds.”

CNBC Pro subscribers can read the full story on this takedown here.

—Fred Imbert, Carmen Reinicke

Bond yields fall after Fed meeting minutes are released

Bond yields edged lower, cooling after the previous session’s gains following the release of minutes from the Federal Reserve’s Open Market Committee’s July meeting.

The benchmark 10-year Treasury yield was just under a basis point lower at 2.886%, while the 30-year Treasury yield was trading 1 basis point lower at 3.135%.

The yield on the shorter 2-year Treasury note was a basis point lower at 3.285%. Yields move inversely to prices, and one basis point is equal to 0.01%.

Markets await the release of employment data due on Thursday, including a variety of jobless claims and home sales figures.

Read the full bond report here.

– Natasha Turak

European markets were muted as caution reigns after the Fed minutes

European markets were mixed at the open on Thursday, struggling to capitalize on gains amid continued market caution over the inflationary outlook.

The pan-European Stoxx 600 was fractionally lower in early trade, with industrials down 0.6% while oil and gas stocks gained 0.6%.

– Elliot Smith

Nomura and Goldman further cut China GDP forecasts for 2022

A pedestrian wearing a protective mask walks past a branch of Nomura Securities Co., a unit of Nomura Holdings Inc., in Tokyo, Japan, Monday, July 27, 2020.

Kiyoshi Ota | Bloomberg | Getty Images

Nomura further cut its forecast for China’s GDP growth in 2022 from 3.3 percent to 2.8 percent, citing the latest economic data outside the country.

The latest move continues the bank’s streak of having one of the lowest calls among peers, echoing pessimism about Beijing’s growth target of around 5.5%. In July, Chinese officials indicated that the country could miss its GDP target for the year.

Nomura credits worsening downturns in the current economic cycle, as well as China facing its worst heat wave in years, which could weigh on growth in the third quarter.

Goldman Sachs also cut its forecast from 3.3% to 3%, citing the latest data showing a drop in demand and sluggish credit growth. The report also emphasized the drag of the downturn in the real estate sector.

The expected cuts come after the People’s Bank of China unexpectedly cut two interest rates on Monday, its medium-term policy loans and a short-term liquidity tool, for the second time this year.

– Jihye Lee

CNBC Pro: Goldman says planned energy transition is driving valuations, picks stocks that are ‘best in class’

Energy efficiency improvements made by companies will become increasingly important to investors, according to Goldman Sachs.

“Carbon is increasingly becoming a factor affecting stock selection and equity valuation, driven by increasing regulatory pressure and net zero investment strategies,” the investment bank wrote in a recent report from August.

Goldman identified buy-rated companies that rank well in their reductions in energy consumption and where it says energy efficiency will play a key role in the companies’ long-term competitive positioning.

Professional subscribers can read more here.

– Weizhen Tan

CNBC Pro: Top tech investor Paul Meeks reveals why he thinks PayPal is a buy

PayPal has lost nearly half of its market capitalization this year, and that’s despite a strong rally over the past month.

But top tech investor Paul Meeks is still a fan of the online payments giant. He tells CNBC Pro Talks why he thinks the stock is a buying opportunity.

Professional subscribers can read the story here.

— Xavier Ong

Bed, Bath & Beyond falls as activist investor signals plans to sell position

People leave a Bed Bath & Beyond store amid the coronavirus disease (COVID-19) pandemic in New York on January 27, 2021.

Carlo Allegri | Reuters

Shares of Bed Bath & Beyond fell nearly 16% in extended trading Wednesday after activist investor Ryan Cohen said in a securities filing that he plans to exit his position in the retailer through his firm RC Ventures.

RC Ventures proposed to sell 9.45 million shares of the company, according to the filing. This represents the company’s entire position on Bed Bath & Beyond.

Cohen first disclosed his stake in the retailer in March.

– Lauren Thomas, Jesse Pound, Pippa Stevens

Cisco, part of Dow Industrials, jumps after hours

Shares of Dow component Cisco rose more than 4% in extended trading on Wednesday following the company’s fiscal fourth-quarter results.

Cisco beat the top and bottom estimates and gave better than expected guidance.

“We had a strong end to our fiscal year thanks to our fourth quarter performance. Our teams executed well amid an incredibly dynamic environment, resulting in the highest full-year non-GAAP earnings per share of the company history,” Chuck. Robbins, chairman and CEO of Cisco, said in a statement.

– Pippa Stevens

Economic data on Thursday’s cover

The market has been watching economic data perhaps more than usual in recent months, trying to determine the Federal Reserve’s course of action as the central bank works to fight the hottest inflation in last 40 years

First, the weekly jobless claims data at 8:30 am on Wall Street. Economists expect 260,000 claims, according to estimates compiled by Dow Jones.

The Philly Fed’s August survey is also out at 8:30 am, and economists polled by FactSet expect a reading of -5.0 after -12.3 in July.

Existing home sales numbers for July will be released at 10 a.m. ET Wall Street is forecasting a 6.1% drop in sales, according to Dow Jones.

– Pippa Stevens


Published by

Recent Posts

More on the Interest-Income Channel

Last weekend, I wrote about Warren Mosler's argument that the Fed's rate hikes could be…

1 month ago

More information in the Interests Channel

Last weekend, I he wrote on Warren Mosler's argument that the Fed's rate hikes could…

1 month ago

Biden wants to reduce the deficit. Powell wants to reduce inflation. Do rate hikes undermine both goals?

Last week, the chairman of the Fed, Jerome Powell said, "the disinflationary process has begun".…

1 month ago

Quick thoughts on the CBO budget and economic outlook

Earlier this week, I joined Romaine Bostick and Scarlet Fu Bloomberg TV. The Congressional Budget…

1 month ago

Eight states have joined forces to raise taxes on America’s wealthiest

Tomorrow morning, I'll be joining CNBC's Squawk Box to talk about a new effort tax…

2 months ago

Mike Pence would pick up where Paul Ryan left off

Former Vice President Mike Pence talks about privatizing Social Security. The remarks came Thursday before…

2 months ago