Article published at 8:50 a.m. CT
JJ Kinahan is Senior Vice President, Head of Retail Expansion and Alternative Investment Products at Cboe Global Markets, Inc. (Cboe).
Key Takeaways:
- Warsh not expected to say much about monetary policy in Jackson Hole
- Nvidia banks second-largest one-day stock gain
- Gap shares rise on new leadership announcement
It looks like today’s trading is starting with another case of wait-and-see sentiment ahead of Federal Reserve Chair Kevin Warsh’s debut keynote at the Jackson Hole economic conference.
We don’t expect him to veer off his close-to-the-vest stance on monetary policy, but it’s always better to be safe than sorry to take a big position ahead of an unknown that could be market moving. There’s also nothing making headlines that might prompt a position, so investors appear like they will get through this final summer Friday safely.
The three major indices are bumping around the flat line without much conviction. The Nasdaq Composite is off 0.12% while the S&P 500 Index and the Dow Jones Industrial Average are both edging into positive terrain, up 0.09% and 0.15%, respectively.
Nvidia shares are also flat after epic trading Thursday that swelled $442 billion in market valuation, marking the second-largest one-day gain by any stock in history. Robust results coupled with strong guidance led the advances and lightened fears of artificial intelligence’s (AI) near-term sustainability. The largest one-day stock gain happened July 30 when Microsoft banked $450 billion.
Marvell shares are pulling back 7% in early trading in another example of elevated expectations that fall short of better-than-expected results and guidance. The semiconductor giant, which has trekked 170% higher year-to-date, turned in top and bottom lines that narrowly exceeded estimates and guidance that failed to wow investors because it met Wall Street’s outlook. What’s more, Marvell didn’t offer much insight into its two-sided deal with Google, saying it would share more at its investor day in early October.
Gap Inc. turned in a 2% drop in sales late Thursday that snapped 10 straight quarters of gains even though profits exceeded Wall Street’s expectations. Overall sales of the parent of Gap, Old Navy, Banana Republic and Athleta were pulled down by fashion misses at Old Navy, typically a powerhouse for the retailer. Old Navy’s same-store sales, an important retail measure, dropped 4%. But shares climbed after Old Navy named Michael Francis as its new president who will take over Nov. 2. The stock rise is reflective of the respect Francis — who spent years at Walmart and Target — has among investors. Shares were higher by nearly 16% in the early going.
Affirm, the buy-now, pay-later fintech firm, said its fiscal fourth quarter was its most profitable ever as it reported results that beat expectations. The firm has a lofty $100 billion goal to meet by the end of the decade. Shares are tracking 11.6% to the upside.
PayPal shares gave up 14.2% in early trading after Bloomberg reported a consortium’s $50 billion deal to buy out the payment process platform evaporated. There was no reason given as to why Advent, a buyout firm, and Stripe, another payment processor, walked away. However, the Wall Street Journal reported earlier this month that PayPal executives thought the bid was too low. As is the case in many buyouts, the two could always come back later.
Elastic shares moved nearly 25% to the upside after the enterprise search and cybersecurity firm outpaced Wall Street’s expectations for profit, earnings and guidance. The company said it sees growing momentum across research and AI channels, offering another constructive outlook for AI investments.
Happy Trading!
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