The December jobs report blew a chill over U.S. markets Friday morning. The number of jobs added was less than half the consensus estimate, while the unemployment rate also fell by more than expected. The markets’ tepid reaction could be due to two factors. First, the Federal Reserve may see the 3.9% unemployment rate as approaching full employment. Second, in a labor market at or near full employment, rising wages are more likely to be inflationary and that would likely push interest rates up.
For growth stocks (tech, mainly, but also health care), higher interest rates will weigh on valuations. The Dow Jones industrial average’s blue-chippers are unlikely to be affected as much. That’s why the Dow was up about 0.2% in the noon hour, while the S&P 500 and the Nasdaq both traded lower.
Crude oil pulled back from an early morning price of more than $80 a barrel to trade at around $78.80. Bitcoin dropped further and recently traded at around $41,850. The yield on U.S. 10-year Treasuries were up by about five basis points to 1.78%, and the two-year yield was roughly flat at 0.88%.
While there is plenty of social media chatter about GameStop Corp. (NYSE: GME | GME Price Prediction), the 30% after-hours share price increase Thursday was slashed by more than 80% in noon-hour trading Friday. Some analysts are not as over-the-moon about GameStop’s reported NFT foray as are some retail investors. According to Fidelity data, 59% of 6,645 orders as of the noon hour were to buy GameStop stock.
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DraftKings Inc. (NASDAQ: DKNG) stock traded higher in the noon hour, following a report that the New York gaming commission has said that DraftKings and three more state-approved mobile betting companies could begin taking bets on Saturday. DraftKings has said it will launch its mobile app on Saturday, while the others (Caesars, FanDuel and Rush Street) have not indicated their plans. Sports betting revenue will be taxed at 51% and is expected to generate $482 million annually in tax receipts for the state.
Tesla Inc. (NASDAQ: TSLA) traded lower again Friday as investors continued to be impressed by expected demand for Ford’s coming all-electric F-150 Lightning pickups. Nearly 200,000 customers have reserved the electric F-150, and Ford has already said it plans to increase production to more than that number by next year. Tesla, which began taking reservations for its Cybertruck more than two years ago, is reported to have topped 1 million reservations.
Marijuana grower Tilray Inc. (NASDAQ: TLRY) will report quarterly results before markets open on Monday. The stock reached a new 52-week low Friday morning but then traded higher, likely related to high implied volatility in the options market. Tilray is expected to surpass its second-quarter 2021 revenue and post a smaller year-over-year per-share loss. But it will take a massive beat to get investors fired up again.
As the noon hour ended Friday, GameStop shares traded up about 6%, at $139.01 in a 52-week range of $17.08 to $483.00. The average daily trading volume is around 2.5 million shares, and about 9.5 million had traded so far on the day.
DraftKings stock traded up about 4% to $26.85, in a 52-week range of $23.21 to $74.38. The average daily trading volume is around 16 million shares, and more than 17 million had already changed hands Friday.
Tesla’s stock traded down about 2.7%, at $1,036.05 in a 52-week range of $539.49 to $1,243.49. The average daily trading volume is about 27.2 million shares, and about 16.5 million had traded thus far.
Tilray stock traded up about 2.5% to $6.60, in a 52-week range of $6.29 to $67.00. The average daily trading volume is about 22.7 million shares, and more than 18 million had already traded.
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