Plus, last month’s GameStop saga is under the spotlight in Congress today, Walmart reported mixed earnings, and bitcoin surged above $52,000 for the first time.
Stocks were lower to start Thursday with the Dow falling 54 points, or 0.2%. The S&P 500 slid 0.4%, while the Nasdaq dropped 1%.
Jobless claims unexpectedly rose higher. The Labor Department reported initial jobless claims of 861,000 last week, marking the highest reading in a month and well above economists’ estimate for 773,000. “The current level of claims, at 861k, reflects weak labor-market conditions and implies extremely tame labor-cost pressures,” said Bloomberg economist Eliza Winger. “To be sure, seasonal factors have also played havoc with the data. It is a stretch to use ‘typical’ seasonal factors in a very atypical year, particularly as it pertains to normal seasonal hiring and layoff patterns around the holidays.” Charles Schwab chief investment strategist Ann Sonders added, “We’re still at the mercy of the virus, so it’s still a bifurcated economy.”
The GameStop frenzy that captivated the market late last month is under the spotlight of a congressional hearing today. Some of the biggest players in the story will testify before the House Committee on Financial Services, including Robinhood Markets CEO Vlad Tenev, Citadel CEO Kenneth Griffin, Melvin Capital founder Gabriel Plotkin, Reddit CEO Steve Huffman, and Keith Gill, a retail investor who became famous for making a very bullish bet on the stock and broadcasting his thoughts on Reddit and YouTube. Rep. Maxine Waters (D-Calif.), chair of the committee, said in a statement that the hearing is meant “to examine the event activity around GameStop stock and other impacted stocks with a focus on short selling, online trading platforms, gamification and their systemic impact on our capital markets and retail investors.”
Walmart shares are down more than 5% this morning after the retailer delivered disappointing fourth quarter results. The big box store posted earnings of $1.39 per share on revenue that rose 7.3% to $152.1 billion, while analysts had expected earnings per share of $1.51 on revenue of $148.5 billion. “We completed a strong year and a strong Q4 thanks to our amazing associates. They stepped up to serve our customers and members exceptionally well during a busy holiday period in the midst of a pandemic,” said Walmart President and CEO, Doug McMillon. “Change in retail accelerated in 2020. The capabilities we’ve built in previous years put us ahead, and we’re going to stay ahead. Our business is strong, and we’re making it even stronger with targeted investments to accelerate growth, including raises for 425,000 associates in frontline roles driving the customer experience.”
In other earnings news, Fiverr shares are down more than 3% even after the freelance-work company delivered an earnings beat. For its fiscal fourth quarter, Fiverr reported revenue of $55.9 million, up 89% from a year ago, and above Wall Street expectations for revenue of $54.1 million. “Our marketplace significantly scaled during 2020 and we achieved the important milestone of turning Ebitda positive as well,” Fiverr CFO Ofer Katz said in a statement. “We believe the strong momentum is carrying into 2021 and the increased awareness and adoption of digital freelancing services will continue to provide tailwinds for our business. We are excited about the year ahead as reflected by our strong financial outlook for 2021.”
After bitcoin rose above $52,000 late Thursday, DoubleLine Capital chief Jeffrey Gundlach said the cryptocurrency looks like a better trade than gold now. “I am a long term dollar bear and gold bull but have been neutral on both for over six months,” Gundlach said in a tweet. “Lots of liquid poured into a funnel creates a torrent. Bitcoin may be The Stimulus Asset. Doesn’t look like gold is.” After surging as high as $52,621 last night, bitcoin has settled at $51,922 at the time of writing. The digital coin is up more than 77% so far this year.
Stocks We’re Watching
Integra LifeSciences (NASDAQ: IART): Integra LifeSciences reported an earnings beat this morning, posting adjusted earnings per share of $0.84 on revenue that rose 5% year-over-year to $388.6 million. “The safety and well-being of our colleagues has remained our number one priority throughout the pandemic, so they could continue to deliver critical, life-saving products to clinicians,” said Peter Arduini, Integra’s president and chief executive officer. “The revenue and profitability impact from surgical procedural deferrals caused by COVID were most significant in the first half of 2020. The Company’s revenue and profitability improved in the second half of the year as procedures recovered. Over the course of 2020, we focused on enhancing our global operations, investing in critical growth programs, and optimizing our product portfolio. These accomplishments and our strong financial position increase our confidence that we will return to growth in 2021.”