Wall Street lost steam at the end of Wednesday’s trading session and only ended slightly higher.
The Dow closed up 0.1%, or 26 points. The S&P 500 and Nasdaq Composite both also rose 0.1%.
The market struggled for direction with little on the economic calendar ahead of various releases on Thursday and Friday, including the May jobs report.
Prices are rising, companies have a hard time hiring, but the economy keeps recovering, according to the Federal Reserve’s Beige Book report for the period of early April until late May.
Increased vaccination rates along with relaxed social-distancing measures have allowed the economy to expand at a faster rate.
But that doesn’t mean that everything is peachy.
Material and worker shortages hurt several industries, including manufacturing and homebuilding.
Prices rose as well, with selling prices increasing moderately and input costs rising faster.
Dogecoin is going to the moon again. The canine-themed digital currency soared more than 25% Wednesday to about 40 cents. Investors cheered the news that crypto giant Coinbase (COIN) was planning to let users of its Coinbase Pro service buy and sell dogecoin.
“One of the most common requests we receive from customers is to be able to trade more assets on our platform,” Coinbase said in a blog post Tuesday. The company added that dogecoin trading is only on its advanced Coinbase Pro product for now and is not yet available for the more standard Coinbase.com site or any of its consumer mobile apps.
“We will make a separate announcement if and when this support is added,” the company said.
Dogecoin has been extremely volatile for the past month, just like bitcoin, ethereum and other cryptocurrencies. Prices hit a peak of 74 cents on May 8, just before Tesla (TSLA) CEO (and huge dogecoin fan) Elon Musk joked on “Saturday Night Live” that the cryptocurrency was a “hustle.”
But Musk is cheering the dogecoin comeback. Following the Coinbase announcement, Musk resurfaced a tweet of his from last July that showed a gigantic cloud with a dog’s face on it and the text “dogecoin standard” that was approaching a landscape labeled “global financial system.”
Musk’s comment: “It’s inevitable.”
Stocks are losing steam with about two and a half hours left in the trading day.
The Nasdaq Composite even turned red, falling 0.1%.
Stocks are near all-time highs today, as no economic data or bad news is distracting investors from being optimistic about the future.
But not so fast. There could easily be some wobbles in store.
Even though there’s only a 10% chance of a recession in the next 12 months, with valuations this high, there’s a very high chance — 75% — stocks will see a 10% drop in the near term, according to Joe Duran, head of Goldman Sachs (GS) Personal Financial Management.
Duran’s advice for investors who have gotten heavily into growth and tech stocks? “Rebalance to value stocks.”
But even though diversification is key, Duran won’t be recommending cryptocurrencies any time soon.
“We don’t today suggest people invest in digital currencies,” he said, but he thinks the underlying technology — blockchain — is interesting for wide-ranging applications.
As for worries about inflation, Duran cautioned not to worry too much just yet.
“The market does perfectly fine if inflation goes up steadily,” he said on the CNN Business digital live show Markets Now. The 10-year US Treasury bond yield is doing fine, he said, suggesting the bump in inflation is only temporary.
The hits keep coming.
Shares of AMC — the largest movie theater chain in the world — surged more than 120% early Wednesday to a new peak above $70. Trading of the shares was halted twice because of volatility.
The popular WallStreetBets Reddit board has boosted the stock lately as a way to hurt short-sellers who bet against the company. On Wednesday, AMC (AMC) announced that it would reach out to its new backers with an initiative called “AMC Investor Connect.”
The company described “Investor Connect” as a way to put AMC in “direct communication with its extraordinary base of enthusiastic and passionate individual shareholders.” The theater chain also revealed that it has seen its “retail shareholder base grow beyond 3 million owners” over the last several months.
The theater chain is trying to get back to normal after a brutal year for the industry. The coronavirus pandemic hit theaters especially hard leading to cineplexes being shut down and delaying big movie releases. However, AMC has had a reversal of fortunes of late thanks in large part to Reddit’s army of investors.
Japanese online reselling platform Mercari did well last year when people were stuck at home, according to the company’s CEO John Lagerling.
“Either you needed extra cash or you spent more time at home,” he told Alison Kosik on CNN Business’ digital live show Markets Now.
Puzzles and games have sold particularly strongly, but “now we’re seeing things like outdoor items” do well too, Lagerling said, as needs are changing in the recovering economy.
It’s a jobs report week and the conversation is centering on what’s keeping people from returning to work.
“The pandemic itself has been the most complicated disruptor,” said Diane Swonk, chief economist at Grant Thornton, on the CNN Business digital live show Markets Now.
This disruption has encompassed everything from how we spend our money to the way we work – for those of us fortunate enough to still have a job.
Those reasons include child care challenges, long-haul Covid infections and their effects, worries about future infections or about employee policies. Many people also have retired early and left the labor force entirely, Swonk added.
“Then, of course, there are the supplements to unemployment [benefits], which seems to be a much smaller deterrent,” Swonk added.
Critics of pandemic-era jobless benefits have claimed that the higher payments are keeping people from going back to work.
Bed Bath & Beyond unveiled some new private label brands Wednesday and investors are going berserk for the stock.
Shares of Bed Bath & Beyond (BBBY) soared about 45% — the biggest one-day move ever for the stock — following the news that it is launching three more of what the retailer calls “Owned Brands.” They are the Our Table line of kitchen and dining ware, Wild Sage products for the bedroom and bathroom and the Squared Away suite of organization and storage tools.
The new products strategy is part of CEO Mark Tritton’s plan to turn around the retailer, which has struggled to keep up with the likes of Amazon (AMZN), Walmart (WMT), Target (TGT), Wayfair (W) and TJX (TJX)-owned HomeGoods.
Tritton said in a press release Wednesday that he was “pleased that we are ahead of schedule in delivering our Owned Brands plan.” Investors are happy too. The stock has more than doubled this year and has skyrocketed 450% in the past 12 months.
But is Bed Bath & Beyond now trading beyond a reasonable price? Sure, the company is expected to post a profit this fiscal year after losing money during the height of the pandemic in 2020. But sales are still expected to fall this year and analysts are forecasting little to no revenue growth for next year either.
The US economy is recovering from the pandemic, and the White House isn’t shy about how well things are going, relatively speaking.
According to the Organization for Economic Cooperation and Development’s economic outlook report, the US economy will grow 6.9% this year and 3.6% in 2022.
“That would be the highest level in nearly four decades,” the Biden administration said in a statement about this year’s growth forecast.
According to the Wall Street Journal, America is the only major country for which GDP expectations for 2025 are higher than they were in pre-pandemic times.
To combat a growing shortage of workers, the US Chamber of Commerce told CNN Business it will urge states on Wednesday to use American Rescue Plan funding to help parents struggling with the high cost of childcare.
“There is no question the disruption of in-person schooling and childcare has reduced the number of caregivers, principally women, who are in the workforce and able to work,” Neil Bradley, the US Chamber’s chief policy officer, said in a phone interview.
Arizona announced plans on May 13 to use funds from the $1.9 trillion American Rescue Plan to assist working parents with childcare costs. The state said it will provide three months of childcare assistance to people making $52,000 or less who return to work after collecting unemployment benefits. The initiative is part of Arizona’s decision to end the $300 enhanced unemployment benefits.
“We will encourage other states to do that,” Bradley said, adding that the “affordability and accessibility to childcare” were problems even before the pandemic erupted.
The pressure from the Chamber of Commerce comes as businesses grapple with a shortage of workers and a record-high 8.1 million job openings as of March.
“We have to find a way to bring [women] back to work,” Minneapolis Federal Reserve President Neel Kashkari told CNN’s Poppy Harlow on Tuesday.
Hollywood may be back thanks to strong box office debuts for “A Quiet Place Part II” and “Cruella” over Memorial Day weekend. And shares of AMC (AMC) continue to go bonkers after the company announced a new series of perks (such as free popcorn) for the retail investors in the Reddit WSB army that have helped push the stock to a new all-time high.
But Goldman Sachs analyst Michael Ng isn’t as excited about the cinematic comeback. Ng downgraded shares of AMC rivals Cinemark (CNK) and big screen theater operator IMAX (IMAX) to a rare “sell” rating Wednesday. Ng does not cover AMC.
“Although we expect a sharp domestic box office recovery in 2021 and 2022, we believe that this is reflected in current valuations,” Ng wrote in his report. Shares of Cinemark and IMAX fell 4% and 5% respectively. But AMC kept meme-ing on, surging another 25%.
IMAX CEO Rich Gelfond is upbeat though. He recently appeared on the CNN Business Markets Now show and on CNNI’s First Move with Julia Chatterley to discuss the comeback for movies.
But Ng noted that even if the movie theater business bounces back to meet current expectations of about $8.2 billion in domestic box office receipts in 2022, that is still a sharp pullback from the pre-pandemic levels of $11.4 billion in 2019.
And Ng thinks investors are ignoring the fact that “the pandemic has further popularized streaming.” Thanks to Netflix (NFLX) and Disney+ (DIS), it may be tougher to convince moviegoers to go to the theaters as much as they used to unless it’s to see major blockbusters.
US stocks started Wednesday in the green. The Dow and the S&P 500 are both close to all-time highs and could reach fresh records in this session.
The economic calendar is quiet with some releases delayed until Thursday because of the Memorial Day holiday at the start of the week.
Price are rising quickly across huge swaths of the developed world, with inflation in countries that belong to the Organization for Economic Cooperation and Development surging in April to the highest rate since 2008.
Energy price hikes boosted average annual inflation across OECD countries to 3.3% in April, compared with 2.4% in March, the Paris-based organization said Wednesday. That’s the fastest rate since October 2008, when the global financial crisis delivered a massive shock to the world economy.
But prices are rising across the world even when volatile food and energy costs are excluded. When those products are omitted from calculations, inflation still jumped from 1.8% in March to 2.4% in April.
The sudden arrival of inflation as economies reboot following the coronavirus pandemic is a major challenge for policymakers around the world. Rising prices are bad news for anyone on a fixed income, and central bankers may be tempted to combat inflation by hiking interest rates or paring back stimulus programs.
US stock futures were flat as a pancake Wednesday morning. Stocks looked to rally Tuesday but then fizzled at the end of the day. Dow futures were up 31 points or 0.1%. S&P 500 futures were flat and Nasdaq futures were 0.1% lower.
Here’s where things stand as of 6:45 am ET:
A new LGBTQ exchange-traded fund recently launched on Wall Street … just in time for the start of Pride Month. It’s a clear sign that investors recognize the purchasing power and economic clout of members of the LGBTQ community.
The LGBTQ + ESG100 ETF from data firm LGBTQ Loyalty Holdings (LFAP) invests in 100 companies in the S&P 500 that are doing a good job of embracing diversity and equality as well as other environmental and social causes.
Top holdings include many of the big tech firms that dominate the market, such as Apple (AAPL), Tesla (TSLA) and Amazon (AMZN). But the ETF also owns significant stakes in Marriott (MAR), Starbucks (SBUX) and Estee Lauder (EL).
America’s recovery from the pandemic downturn has been rocky: Millions of workers — especially women — remain on the sidelines, while parts of the economy are booming and inflation is rising.
Getting people back into the labor force and into a job is now key to keep the recovery going and stop the economy from overheating, according to Minneapolis Federal Reserve President Neel Kashkari.
The US Chamber of Commerce said Tuesday that the nation’s worker shortage is getting worse by the day.
