What's moving markets today: May 15, 2019
Wednesday trading is over and global markets seem to have calmed down some. Here’s what investors will focus on next.
Stocks ended the day higher for the second day in a row.
While markets had started the day lower, they turned positive following reports that the United States would delay tariffs on auto imports by six months. Treasury Secretary Steven Mnuchin also said Washington was close to scrapping tariffs on steel imports from Mexico and Canada.
In the S&P, all sectors finished the day stronger with the exception of financials. The sector's decliners were led by Charles Schwab (SCHW) and SVB Financial Group (SIVB), which fell 3.6% and 2.9%, respectively.
Overstock is going through a rocky transition, from being a money-losing online retailer to a become a blockchain and cryptocurrency company. Things got worse on Wednesday. Shares of Overstock (OSTK) plunged 15% after a SEC filing revealed that CEO Patrick Byrne sold 500,000 shares of the company in two separate transactions this week.
Overstock posted a net loss of more than $40 million back in March and also announced layoffs. And even though the company is focusing more on its Medici Ventures investing firm for blockchain technology, as well as tZero security tokens for e-commerce and trading, investors are still worried about the problems in its core retail unit.
Simply put, Overstock can't compete with Amazon (AMZN) and the red hot Wayfair (W), the online home furnishing retailer whose shares have surged 60% this year. The stock sale by Byrne clearly isn't inspiring confidence either.
"We're very excited about the upcoming Slack IPO," said David Miller, chief investment officer at Catalyst Funds on Markets Now.
Zoom (ZM) is another recent IPO business that impressed Miller and Catalyst thanks to its gross margins.
Less exciting? The ride-sharing apps.
Uber and Lyft were a very different story, Miller said, citing concerns about their margins. "We're not excited about ride-sharing."
The pain of the trade war between the United States is becoming more obvious.
Tariffs are a looming threat for retailers, which haven't yet passed on trade-war-related costs to consumers, said CNN Business' Matt Egan on Markets Now. Passing on costs could help companies' margins but would weigh on the consumer's wallet.
Wednesday's weaker-than-expected retail sales data for April, for example, underlined that problems for America's retailers are real.
However, some sectors are performing well regardless of the trade spat. Cloud computing was an example of that, said David Miller, chief investment officer at Catalyst Funds on the show.
In any case, it was clear that President Donald Trump was still banking on a deal, which would relieve pressure from sectors like retail and agriculture, Miller said.
But for now, Trump "wants to inflict enough pain on China that they change their behavior," he said.
The glory days are still ahead for Uber, Pierre Ferragu, analyst at New Street Research, told CNN's Zain Asher on Markets Now.
Uber (UBER) IPOed last Friday amid a global selloff in stocks. By Monday's close -- after two days as a public company -- Uber was down 17%. Today, the stock is in the green.
On a relative basis, Uber even did quite well in its first few trading days, said Ferragu.
"They're just at the beginning of their growth story in the US," said Ferragu, adding that many people aren't using ride-sharing services yet
Nevertheless, investors are keeping a close eye on Uber's competitor Lyft (LYFT), which IPOed in March. Its shares are down more than 32% since their debut.