The new data released Thursday continued to paint an optimistic picture of the resurgent U.S. economy, but received little reaction on Wall Street, where a modest morning rally turned even meager at the close.
Weekly jobless claims fell again, with filings for the week ended May 22 lower by 38,000 claims to 406,000, easily falling below estimates at 425,000.
Also on Thursday, the Bureau of Economic Analysis’s second estimate of first-quarter U.S. GDP growth was unchanged at 6.4%.
“The overall picture of economic activity in the first quarter remains the same as presented in the preliminary GDP report, with personal consumption spending anchoring growth and business investment responding to strong domestic demand,” says Pooja Sriram , Barclays economist. “As a result, our growth outlook for the next few quarters remains unchanged.”
But while the little cape Russell 2000 took advantage of another turbulent day of gains, advancing 1.1% to 2,273, blue chip indices barely budged. the Dow Jones Industrial Average climbed 0.4% to 34,464, the S&P 500 eked an improvement of 0.1% at 4200, and the Nasdaq Composite recorded a marginal loss at 13,736.
“Higher GDP numbers usually drive up stock markets and bond yields… but the current GDP estimate was widely expected,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, a registered investment advisor.
Other stock market action today:
- Okta (OKTA, -9.8%) reported a lower-than-expected adjusted loss per share on street-beating earnings in the first quarter. However, the cybersecurity stock collapsed as it forecast a larger loss per share in the quarter and current year to reflect the close of its purchase of Auth0. OKTA has also said its CFO Mike Kourey is leaving. Nonetheless, Canaccord Genuity reiterated its buy rating on Okta. “Longer term, working from home is expected to take hold at higher levels as digital transformation accelerates, which is expected to continue to drive demand for identity security as a result. We also see the recently completed acquisition of Auth0 as a factor in the growth and strengthening of Okta’s leadership position in the large and fragmented IAM (Identity and Access Management) market, ”says Canaccord T analyst Michael Walkley.
- Dollar tree (DLTR, -7.7%) was hit, with the retailer’s disappointing full-year forecast and a warning of rising freight costs offsetting the best and first quarter results. Sector peer shares General dollar (GM, + 2.2%), on the other hand, gained ground today after reporting above-estimated earnings per share and revenue and improving its guidance for fiscal 2021.
- U.S. crude oil futures climbed 1% to $ 66.85 a barrel after Energy Information Administration data showed national crude inventories declined last week. It was the fifth straight win for black gold, the longest such streak since February.
- Gold futures notched its first loss of the week, slipping 0.3% to end at $ 1,898.50 an ounce.
- the CBOE Volatility Index (VIX) fell again, by 3.5% to 16.75.
- Bitcoin Prices were also slightly higher on Thursday, climbing 0.7% to $ 38,838.82. (Bitcoin trades 24 hours a day; prices shown here are from 4 p.m. on each trading day.)
Just the beginning of the value?
Analysts and fund managers continue to beat the drums for underrated stocks.
“Growth stocks in the US are multi-year and look expensive relative to US value. Value stocks have started to show signs of a rally, and valuations suggest they are likely lagging behind, ”says Meb Faber. CEO of Cambria Funds. “It’s almost impossible to say for sure that the value is back. But if we really see a change in the performance of the fundamentals, there could be a lot more room to run.
“1999, the worst year for the value factor before 2020, was followed by the best year on record for the value.”
If you’d rather let someone else drive, you actually have a wealth of value-oriented funds at your disposal, with flavors ranging from S&P 500 vanilla bargains to deeply undervalued mid and small caps.
Conversely, if you’d rather get behind the wheel, you’ll have to look around for a bit – after all, in many ways this is one of the most expensive purses in history. But there are deals to be found.
As we mentioned yesterday, income investors can tap into multiple aristocrats for cheap dividends now. But today we’re looking at the more growth side of things with these five tech stocks at a good price. Technology is one of the most expensive areas of the market right now, but these five choices look cheap through a number of evaluation lenses.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.