Stocks And Oil Drop Following Weak Job Report
Michael Kramer | Aug 05, 2021 03:29AM ET
It was a strange day for the market that started with a big miss on the ADP job report. The ADP has been spotty since the start of the pandemic at predicting the BLS job report than it had been prior. Overall the trends tend to follow one over time, but month to month, it is iffy. So I think it would be tough to say that today’s ADP report is a clear negative for the BLS report. In fact, the April ADP report had a strong reading, and the BLS was weak. So what needs to consider here is that BLS outperformed the ADP in February and March, and ADP outperformed the BLS in April and May, so it seems entirely possible that the BLS outperforms the ADP in June and July.
But when you look at them on a 4-month moving average, you can see how they come together rather nicely. In fact, a print of up to 1 million jobs in the BLS report would keep things fairly even as they are right now. So, just because the ADP report was a miss, one should not count on the BLS report missing.
The ISM-services index came in hotter than expected, which was a surprise. So overall, the message today on the economy was a push, and it resulted in yields trading sideways and the S&P 500 trading lower some. However, the S&P 500® Equal Weight ETF (NYSE:RSP) was down nearly 1%, and the ETF is getting very close to breaking a major trend line. This needs to be watched very closely. SINCE MAY, the ETF has essentially gone nowhere, and now it is showing some serious signs of weakness.
Oil is weakening too, and if it should continue, worries over inflation will vanish very quickly. Oil is the key driver to most inflation indexes, and where oil prices go, so too do those indexes.
Get The News You Want
Roku (NASDAQ:ROKU) shares tanked after hours, after their active account numbers crumbled, with just 1.5 million new accounts. Even more shocking is that now Roku is losing money on their streaming players, posting negative profits for the segment due to higher costs. Meanwhile, streaming hours declined. Overall, a weak number in terms of accounts and hours, which at the end of the day is what drives revenue. Basically, that $36.46 in the ARPU translate to something like $3 and change a month per account in revenue since the company looks at ARPU on a trailing-twelve-month basis. Anyway, the stock found support at $385, but really this should go even lower. One can wonder now if it has formed a double top too.
The valuation is insanely high, much more than it should be, and it seems as if the trends are now turning. I mean, Netflix (NASDAQ:NFLX) had disappointing numbers and guidance. Was Roku really going to be an outlier?
ACADIA (NASDAQ:ACAD) reported disappointing second-quarter results with revenue missing estimates. Not what you want to see. Additionally, the Type A meeting came and went, and truthfully, I have no idea what the actual conclusion was. I can’t explain the frustration and confusion I have from this. How did the DRP study even get to this point if the FDA tells Acadia now they should be looking at sub-group. Why didn’t the FDA bring this up one time over the past 4 years? Somewhere, someone is not transparent.
Original Post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.