U.S. stocks fell on Tuesday as investors weighed possible interest rate cuts ahead of a key jobs report and focused on how a growing likelihood of a Donald Trump victory would affect markets.
The Dow Jones Industrial Average (^DJI) fell 0.1%, the S&P 500 (^GSPC) lost nearly 0.2%, and the tech-heavy Nasdaq Composite Index (^IXIC) fell more than 0.3%.
With the week centered on Friday’s crucial June jobs report and a shortened trading session for the Fourth of July holiday, the market has leaned to safety and stocks are showing signs of fatigue. Doubts are growing about whether stocks can hold on to their first-half gains through the end of the year, and investors are wary of any signs of economic strength that could dampen the momentum.
Jerome Powell is scheduled to speak at the European Central Bank’s (ECB) meeting on Tuesday, and investors will be watching the Federal Reserve chairman’s views on inflation developments and the state of the labor market, as well as the release of weekly jobs data, which will also influence interest rate cut expectations.
Meanwhile, on Wall Street, political risks are on people’s minds as they gauge what a Trump election victory means for markets amid growing speculation over Biden’s future as the Democratic Party’s standard-bearer. The 10-year Treasury yield (^TNX) fell to 4.43% on Tuesday after posting its biggest one-day gain this year on Monday.
On the corporate front, Tesla (TSLA) delivered more vehicles than expected in the second quarter, sending its shares up about 5% at the open.
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Arguments for Roaring Kitty’s possible investment in Chewy…
We’re talking about a timely note from Mark Mahaney, technology analyst at EvercoreISI.
Mahaney provided a nice breakdown of his investment thesis for Chewy (CHWY), the day after Keith “Roaring Kitty” Gill revealed that he owns 6.6% of the company, and he also shares some helpful research analysis below.
Mahaney says:
“We continue to view Chewy as a solid business that is vulnerable to overall industry weakness, but there are still many investment positives, including steady growth in spend and loyalty per Chewy customer, nascent growth opportunities in sponsored ads, international expansion, vertical expansion (e.g. veterinary practices) and the potential for continued gross profit and EBITDA margin expansion.”
Mahaney is maintaining the ratings as expected for now, citing competitive pressures, valuation and an unproven expansion into Canada.
Chewy has become the number one destination for pet supplies, according to a new survey from EvercoreISI. (Evercore ISI)
