Job Market Remained Hot in April Despite Headwinds

Market Movers

• Job growth totals 253,000 in April. Total nonfarm payroll employment rose by 253,000 in April, and the unemployment rate changed little at 3.4 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in professional and business services, health care, leisure and hospitality, and social assistance.

• Apple shares rise after iPhone bounces back. Apple Inc.’s shares rose in premarket trading after reporting a rebound in iPhone sales last quarter, helping the world’s most valuable company top earnings estimates and weather an industrywide downturn. Overall revenue amounted to $94.8 billion in the fiscal second quarter exceeding the $92.6 billion analysts predicted.

• Paramount shares drop 28% as streaming costs mount. Paramount’s results were dragged down by major charges related to its cancellation of certain programming, a soft ad market that weighed on its TV business, and rising costs for its flagship streaming service.* Paramount said it has restarted its sales process to unload its book publishing unit, Simon & Schuster, and has received interest.

• DoorDash sales soar as consumers stick with deliveries. The food-delivery company’s revenue grew 40% to $2.04 billion in the first quarter from $1.46 billion a year earlier. The jump was powered by factors including an increase in total orders* and marketplace gross order value as well as the company’s acquisition of European food-delivery company Wolt Enterprises Oy, which closed in June.

• Peloton falls on ‘challenging’ growth outlook, dish settlement. Peloton agreed to pay $75 million to settle an International Trade Commission dispute with Dish Network Corp. over content-streaming technology. The cost will put significant pressure on free cash flow* in the fourth quarter, Chief Executive Officer Barry McCarthy said in a letter to shareholders.

What to Watch

• Regional bank stocks rebound on Friday. PacWest led the rally rising 22%. However, Friday’s rally made only a small dent in the week-to-date losses. The steep declines, which came even at banks that reported much smaller deposit outflows than First Republic, led Wall Street analysts to warn that the stocks have become detached from their fundamentals.

• Shopify to lay off 20% of its workforce as it sells logistics business to Flexport. Flexport is buying Shopify’s logistics-fulfillment operations, including U.S. e-commerce platform Deliverr.* Shopify is also selling its 6 River Systems warehouse robotics operation to U.K. automated grocery-fulfillment specialist Ocado Group.  

• Lyft revenue forecast, riders miss estimates in test for new CEO. Revenue will be about $1 billion to $1.02 billion in the second quarter, Lyft said in a statement Thursday. Analysts had expected $1.08 billion. Lyft also reported fewer-than-expected active riders on the platform, a sign that efforts to lower fares in order to stay competitive* with Uber Technologies Inc. are falling short.

• AI’s future in hospitality and in Airbnb. The company wants to focus on tuning the large language models to fit Airbnb. They want to build the most personalized AI interface and then have really good application interfaces. The interfaces are not going to be just text-based and will be more visual. A type of app that is a travel community instead of just a tool. Source(52:20)

• Banks will be hurt over the next 3-6 months. George Goncalves thinks this is a very impatient market that now knows where the liquidity shortfalls are. So even if deposits don't continue to fly out now, we're moving towards the economic macro implications that will hurt banks over the course of the next three to six months if not sooner unless we get a solution from the government or the Fed. Source(6:10)