China Fund News reporter Ivan
On May 8th Eastern Time, the market continued to pay attention to financial reports and the prospect of the Federal Reserve's interest rate cut, and there were also speeches from Federal Reserve officials saying "let the hawk fly". The three major US stock indexes have mixed gains and losses, with the Dow Jones index rising for six consecutive days, marking the longest consecutive day in over four months. The Nasdaq closed lower, while the S&P closed flat.
The performance exploded, and the stock price of e-commerce giant Shopify plummeted by nearly 20%, marking the largest daily decline since its listing.
Uber, the leader of ride hailing services, reported poor financial results with its stock price plummeting by nearly 6%.
Federal Reserve officials release eagles
The three major US stock indexes have mixed ups and downs
On May 8th Eastern Time, many Federal Reserve officials delivered public speeches on that day.
Federal Reserve Boston Governor Collins said that achieving the 2% inflation target may take longer. She hinted that interest rates may need to remain at a 20-year high for a longer period than previously thought in order to curb demand and alleviate price pressure. Collins also pointed out a lack of progress in slowing inflation in 2024, stating that a slowdown in economic growth will be necessary to ensure that inflation rates continue to reach the Federal Reserve's target of 2%. She did not provide an estimate of the timing of the interest rate cut.
Collins said, "The recent unexpected increase in economic activity and inflation suggests that we may need to maintain policies at current levels until we have more confidence in the inflation rate continuing to move towards 2%. The recent data makes me believe that this will take longer than previously thought."
Federal Reserve Director Cook stated that the increase in lending by non bank investment companies is worth noting, but it does not seem to bring excessive risk to the financial system. She said, "The growth of private equity credit may not have had a significant adverse impact on the resilience of the financial system."
The market believes that Collins' speech is more hawkish, which has hit the trend of US stocks. In the end, the three major US stock indexes fluctuated. As of the close, the Dow Jones index rose 0.44% to 39056.39 points; The S&P 500 index closed flat at 5187.67 points; The Nasdaq index fell 0.18% to close at 16302.76 points.
Samuel Zief, Global Forex Strategy Director at JPMorgan Private Bank, said that the market is trying to figure out whether the data, especially in the United States, is still strong or just right. So far, this week's events have been driven more by micro factors than macro factors: specific company performance releases and similar events have been driving the development of the stock market.
Performance explosion
The stock price of e-commerce giants plummeted by nearly 20%
On May 8th Eastern Time, the stock price of Canadian based global e-commerce giant Shopify plummeted by nearly 20%, marking the largest daily decline since its listing. The latest total market value is 80.839 billion US dollars.
The financial report data released by Shopify shows that the total revenue in the first quarter was about 1.861 billion US dollars, slightly better than the market's generally expected 1.85 billion US dollars, a year-on-year increase of 23%; However, Shopify suffered a net loss of $273 million in the first quarter, compared to a net profit of $68 million in the same period last year.
The company expects that the gross profit margin in the second quarter will decrease by approximately 50 basis points compared to the first quarter as operating expenses grow by a low to medium single digit percentage.
In terms of performance expectations, Shopify predicts that due to the sale of logistics business to Flexport last year, the gross profit margin in the second quarter will decrease by approximately 50 basis points compared to the first quarter. Moreover, Shopify's total revenue growth rate in the second quarter has also tended to be sluggish. Shopify expects its total revenue to increase by 15% to 20% year-on-year, while the average growth rate in the past few quarters is at least about 26%. This means that Shopify's expected revenue growth rate in the second quarter will reach its lowest level in two years.
Online ride hailing leader Uber's poor financial report
The stock price has plummeted by nearly 6%
On May 8th, Eastern Time, Uber, the leader of ride hailing services, had poor financial results and its stock price plummeted, closing down nearly 6% at $66.4, with a latest total market value of $138.25 billion.
According to Zhitong Finance, Uber's total bookings for the first quarter were lower than analysts' expectations due to weak demand in Latin America and the early impact of holidays on order volume.
The company announced on Wednesday that its total bookings for the first quarter increased by 20% year-on-year, reaching $37.7 billion, which includes ride hailing services, takeout orders, driver and merchant revenue, but does not include tips. This number is below the midpoint of the guidance range provided by the company in February, and also below the average analyst expectation of $38 billion. Revenue increased by 15.1% year-on-year to $10.13 billion, in line with expectations.
CFO Prashanth Mahendra Rajah attributed the decrease in bookings for this quarter to weak ride hailing activities in Latin America, while the return of last year's Brazilian carnival led to increased demand. He also pointed out in his prepared speech that the early start of holidays such as Easter and Ramadan has had an impact.
Looking ahead to the second quarter, Uber expects total bookings to reach $38.75 billion to $40.25 billion, slightly lower than Wall Street's expected $40 billion. The adjusted core profit will be between $1.45 billion and $1.53 billion, with a median higher than the average analyst expectation of $1.47 billion.
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