The Nasdaq sold off Monday on reports that the U.S. government is gearing up for antitrust probes of Google (GOOGL) and Facebook (FB), with Amazon.com (AMZN) and Apple (AAPL) also set to get more scrutiny. But a new stock rally attempt took hold as the Fed signaled support for rate cuts and hopes rose that Mexico tariffs wouldn't kick in on Monday. Beyond Meat (BYND) and Zoom Video (ZM) skyrocketed on their first post-IPO earnings reports.
Stock Market Rallies
After the Nasdaq tumbled Monday on fears on antitrust probes for Google, Facebook and possible Amazon and Apple, the stock market rallied for weekly gains. Fed chief Jerome Powell and other policymakers signaled support for Fed rate cuts, with a weak jobs report bolstering that argument. Hopes rose for a deal to avoid tariffs on Mexico.
U.S. Antitrust Scrutiny For Google, Facebook, Amazon, Apple
The Justice Department is gearing up a Google antitrust probe, while also reviewing Apple's market dominance, according to multiple reports. The FTC will lead antitrust oversight of Amazon and Facebook. House Democrats plan their own Big Tech antitrust probe. President Trump has been critical of Google, Facebook and Amazon, while many Democrats have called for major changes, including a breakup of Big Tech.
Google, Facebook and Amazon shares plunged Monday, but pared losses. Apple stock dipped Monday but was a big weekly winner.
Policymakers Signal Fed Rate Cut Support
Fed chief Jerome Powell hinted he was open to a Fed rate cut amid concerns about the impact of trade conflicts on economic growth. Several other policymakers also indicated they would back a Fed rate cut. Markets are now pricing in a likely Fed rate cut by the July 31 policy meeting, with 3 or more cuts by January.
U.S. Hiring, Factory Growth Fizzle
The U.S. added just 75,000 jobs last month, far below estimates, with downward revisions to prior months. Wage gains cooled slightly, though the jobless rate held at 3.6%. The ISM manufacturing index fell to the lowest since 2016, but it's still indicating growth. The weak economic data was largely measured before Trump escalated the China trade war.
Apple Revamps Key Software
At its Worldwide Developers Conference, Apple (AAPL) updated operating systems and applications for its major products. Its iOS 13 for the iPhone features a heavy emphasis on data privacy. Plus, it has updated apps for Maps, Photos and more. The new iPadOS allows tablets to serve more as PC replacements. Meanwhile, WatchOS 6 sports a bunch of new health and fitness functions. Apple also unveiled a new high-end Mac Pro workstation for creative professionals that starts at $6,000. The accompanying display costs $5,000 without a stand, which costs an additional $1,000.
Beyond Meat Outlook Goes Beyond
Beyond Meat (BYND) forecast full-year sales above analyst expectations, while Q1 sales just beat. The per-share loss for the new, much-hyped IPO that makes plant-based patties and sausages intended to taste like meat, matched forecasts. Shares surged Friday, continuing their epic climb since the stock's debut last month.
Zoom Video Zooms Higher
Zoom Video Communications (ZM) swung to a 3 cent profit as revenue leapt 103% to $102 million, both beating. The cloud-based audio and videoconferencing software maker also gave bullish Q2 and full-year revenue guidance. Shares soared early Friday. The Zoom IPO in April raised $752 million, with shares priced at 36.
Business Software Earnings
Salesforce.com (CRM) earnings of 93 cents, or 66 cents excluding an investment gain, beat views for 61 cents. Revenue rose 24% to $3.74 billion, topping views of $3.68 billion. The cloud-computing pioneer gave bullish full-year earnings guidance.
Coupa Software (COUP) swung to an adjusted per-share profit of 3 cents vs. views for a 4-cent loss. Revenue rose 44% to $81.3 million, also beating. But Coupa gave weak revenue guidance and said its CEO is leaving. Shares crashed to a record low.
Pivotal Software (PVTL) reported Q1 profit and revenue that edged by estimates but its July quarter and full-year outlook fell short. Pivotal, majority owned by Dell Technologies (DELL), cited sales execution challenges and a "complex technology landscape" with competition from cloud computing vendors. Shares plunged to a record low.
Smartsheet (SMAR) reported a narrower-than-expected loss as revenue rose 55% to $56.2 million, modestly beating. Shares in the maker of business process management software jumped.
PagerDuty (PD) with a smaller-than-expected loss in its first post-IPO earnings report. and revenue jumping 49% to $37.3 million. It ended the quarter with 11,600 customers. Shares jumped Friday.
DocuSign (DOCU) earnings came in 7 cents a share as revenue rose 37% to $214 million, both beating. But shares plunged Friday as calculated billings disappointed. The company's software digitizes contract paperwork.
Database Software
MongoDB (MDB) revenue jumped 78% to $89.4 million. Analysts hailed the database software, though shares fell after results. Elastic (ESTC) revenue grew 63% to $80.6 million, beating views. The database and search-engine company and 2018 IPO said it'll buy cybersecurity company Endgame for $234 million.
Five Below, Ollie's Fall
Five Below (FIVE) stock slipped after the firm missed on revenue and comp sales, while also issuing mixed guidence. The Firm also revealed it will be raising some $5 items to $5.25, $5.55 and $5.75. It will also hike prices on items in the $1-$4 range. Meanwhile Ollie's Bargain Outlet (OLLI)stock backed off from a buy point despite posting better-than-expected earnings after same-store sales missed some estimates.
News In Brief
Ciena (CIEN) earnings vaulted 109% in fiscal Q2 while revenue grew 18.5% to $865 million, both beating. Margins, a concern in Q1, were strong. Shares of the optical communications gear vaulted into a buy zone.
Google will buy data analytics firm Looker for $2.6 billion cash, the Alphabet (GOOGL) unit's first big cloud computing acquisition under new cloud computing boss Thomas Kurian.
Fiat Chrysler (FCAU) dropped its merger offer for France's Renault, with the French government's desire for a big role in decision-making a stumbling block.
Stitch Fix (SFIX) soared as the provider of online apparel services reported quarterly results that blew past expectations and raised estimates for the current quarter.
The FAA ordered Boeing (BA) to replace Some 312 Boeing 737 jets with potentially defective wing parts on some 312 Boeing 737 jets, including many Max versions. CEO Dennis Muilenburg predicted 737 Max will be flying again by year-end. Meanwhile problems with a General Electric (GE) jet engine could further hamper Boeing's goal to roll out the world's largest twin-engine jet.
HealthEquity (HQY) reported strong first quarter earnings. The firm also reported a $17.9 million after-tax benefit related to its equity investment in WageWorks, which it is trying to acquire.
Delta Air Lines (DAL) reported a 7% jump in passenger traffic in May, lifted by strong global demand. Flight capacity rose 5.3%.
Skyworks (SWKS) and MaxLinear (MXL) become the latest chipmakers to warn about weak sales because of lost business from Huawei. The Trump administration banned U.S. companies from doing business with the Chinese telecom gear maker on national security grounds.
Ambarella (AMBA) reported a beat-and-raise fiscal first quarter report. Analysts say the video-processing chipmaker is getting a surge in business from Chinese security-camera makers stockpiling chips ahead of possible U.S. trade restrictions.
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