Plus, Fed Chairman Powell announced a move to “average inflation targeting,” initial jobless claims again came in above 1 million, and Amazon is getting into the wearables market.
Stocks were higher to start Thursday with the Dow adding 210 points, or 0.7%. The S&P 500 gained 0.3%, while the Nasdaq traded just above the flatline.
Federal Reserve Chairman Jerome Powell said the central bank formally agreed to a policy of “average inflation targeting,” allowing the inflation rate to run “moderately” above its 2% goal for “some time.” The move to allow inflation to run hotter than normal has been made in an effort to better support the labor market and broader economy. “Our revised statement emphasizes that maximum employment is a broad-based and inclusive goal,” Powell said in a speech delivered virtually for the central bank’s annual policy symposium that’s typically held in Jackson Hole, Wyoming. “This change reflects our appreciation for the benefits of a strong labor market, particularly for many in low- and moderate-income communities. This change may appear subtle, but it reflects our view that a robust job market can be sustained without causing an outbreak of inflation.”
Initial jobless claims again came in above 1 million for the week ending August 22, the Labor Department said. Continuing claims fell by 223,000 to 14.535 million. “Even as businesses have reopened and jobs have returned, layoffs are ongoing reflecting interruptions to activity from virus containment that are likely resulting in permanent closures and job losses,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics, in a note. “The risk of permanent damage to the labor market remains high which will slow the pace of recovery.”
Abbott Laboratories shares are up nearly 7% this morning after the company announced that it has won U.S. marketing authorization from the FDA for a portable COVID-19 antigen test that can deliver results within 15 minutes and will sell for $5. Abbott’s BinaxNOW works without relying on laboratory equipment at a time when labs can take as long as two weeks to produce results, and can be administered by a range of health-care workers at almost any location. “We’re still seeing people waiting excessively long times for results due to overburdened labs and general confusion over what tests are available, where they’re located, and when someone should get one. Results that take over a week to receive simply can’t help us contain the spread of the virus,” said Abbott Labs President and CEO Robert B. Ford said. “The BinaxNOW rapid antigen test and complementary mobile app called NAVICA are life-changing technologies that will attack the pandemic on several critical fronts – speed, simplicity, affordability, access, and accuracy. It will help us be more confident as we navigate work, school and life.”
Walmart and Microsoft are teaming up on a bid for TikTok. The retail giant confirmed this morning that it is interested in buying the social media app’s U.S., Canadian, Australian, and New Zealand operations. TikTok is reportedly nearing announcing a deal in the coming days, though it has not yet decided on a buyer and is still discussing bids. Walmart said in a statement, TikTok’s integration of e-commerce and advertising “is a clear benefit to creators and users… We believe a potential relationship with TikTok US in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses. We are confident that a Walmart and Microsoft partnership would meet both the expectations of US TikTok users while satisfying the concerns of US government regulators.”
And Amazon is entering the wearables market. This morning, the e-commerce giant introduced its Halo wristband health and fitness tracker, alongside a subscription service and smartphone app, going up against the Apple Watch and devices from Fitbit. The Halo band will cost $99.99, with the subscription service costing $3.99 per month. Halo will also offer a Tone analysis of the emotion in users’ voices, even letting users know when they sound out of line. The band has two built in microphones to capture audio and is listening for emotional cues. Amazon said the feature is not intended to analyze users’ conversations, but rather the tone of their voices. Other features include sleep tracking and activity tracking.
Stocks We’re Watching
Dynatrace Inc (NYSE: DT): Dynatrace today announced the extension of its Software Intelligence Platform to support all services from Amazon Web Services (AWS) that publish metrics to Amazon CloudWatch in an effort to provide customers with richer context and more precise answers for their dynamic AWS and hybrid-cloud environments. “Our customers are accelerating their digital transformation, and many are adopting AWS to help them on that journey. We built our Software Intelligence Platform purposefully for dynamic environments such as AWS, with AI-assistance and continuous automation at the core,” said Steve Tack, SVP Product Management, Dynatrace. “We’ve always delivered distributed tracing and code-level insights for applications and microservices running on AWS. This enhanced AWS integration allows us to provide rapid support as Amazon introduces new services for observability into any layer or service in their cloud stack. We are proud of our relationship with AWS and the enhanced value we continue to deliver to joint customers.”