Stocks finished mostly lower in volatile trading Friday after a surprisingly strong jobs report sparked concern from investors that the Federal Reserve would continue its aggressive interest rate hikes to cool the economy and dampen inflation. The U.S. economy added 528,000 jobs in July, the Labor Department reported, more than twice as high as expected, and the unemployment rate ticked down to 3.5%, matching the lowest level since the late 1960s. Wage growth also rose more than expected, up 0.5% for the month and 5.2% higher than a year ago, signaling that high inflation remains a problem. But the S&P 500 and Nasdaq still posted gains for the week, up 0.4% and 2.2% respectively, while the Dow Jones finished with a 0.1% weekly loss.
- Shares of Coinbase Soar more than 50%: Shares of Coinbase (COIN) soared more than 50% last week after the crypto exchange announced a partnership with BlackRock that will allow its institutional clients to buy bitcoin. Services in the company’s Prime offering will be available to clients of BlackRock’s portfolio management platform for institutional investors, the company said on its blog. Coinbase will provide crypto trading, custody, prime brokerage and reporting capabilities. BlackRock is the largest asset manager in the world with more than $8 trillion under management. The ticker COIN also became one of the most mentioned names Thursday on Reddit’s WallStreetBets chat room, topping GameStop’s popularity in the online forum. The unusual jump in Coinbase this week could also be related to investors who were betting against the stock scrambling to cover their short positions, a so-called short squeeze. More than 22% of Coinbase’s shares which are available for trading are sold short, according to FactSet. So as the stock has run, these investors have to buy back the shares to cover their losses, further fueling the gains.
- Uber stock pops 18% after earnings beat: Uber (UBER) reported a second-quarter loss on Tuesday but beat analyst estimates for revenue and posted $382 million in free cash flow for the first time ever. Shares of Uber closed the day up 18.9%. The company reported a net loss of $2.6 billion for the second quarter, $1.7 billion of which was attributed to investments and a revaluation of stakes in Aurora, Grab and Zomato. But CEO Dara Khosrowshahi said in a prepared statement that Uber continues to benefit from an increase in on-demand transportation and a shift in spending from retail to services. Despite the increase in fuel prices during the quarter, Uber said it has more drivers and couriers earning money than before the pandemic, and it saw an acceleration in active and new driver growth. The company reported 1.87 billion trips on the platform during the quarter, up 9% from last quarter and up 24% year over year. Uber also benefited from the resurgence in travel. UBER stock is up more than 37% during the week.
- PayPal shares rise after Elliott Confirms a $2 Billion Stake: PayPal (PYPL) shares rose as much as 13% in extended trading on Tuesday after the financial services firm issued stronger-than-expected second-quarter results. During its earnings presentation, PayPal said it had entered into an information-sharing agreement on value creation with Elliott Management. Elliott Management has acquired almost 2 billion stake in PYPL. PayPal earnings also were better than expected: EPS was 93 cents, vs. 86 cents expected. Revenue: $6.81 billion, vs. $6.79 billion expected. During the earnings call PayPal announced a new $15 billion share buyback program. And the company said it has a “commitment to work with Elliott Investment Management L.P. on a comprehensive evaluation of capital return alternatives.”
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