The market finished in the green after a lower number of unemployment claims.
Despite some volatility at the beginning of the day, all three indices finished Thursday in the green. The most important economic indicator that comes out every Thursday is the number of new jobless claims. This week, the number fell below 500,000 for the first time since the start of the pandemic.
Moreover, the monthly Employment Report will be out tomorrow, and that's the report investors are watching closely. We have heard the Fed wouldn't increase the interest rate until it sees stability in the job market. Tomorrow's report is one of the key indicators the Fed would consider in its interest rate decision. Let's review it tomorrow and discuss the implications for the interest rate.
Why shares of Costco (COST) jumped more than 2% today?
Shares of Costco (COST) jumped more than 2% today. With today's price jump, the stock isn't too far from its all-time high of $393 per share. Do you remember when Amazon was going to kill Costco? It looks like Costco has quite a loyal customer base who prefer to shop at the stores instead of online. You can see the evidence of that behavior on the company April's sales report.
While sales grew 32.5% in April, eCommerce growth was only 20.5%, much lower than its historical growth rate. Both shoppers and investors are happy with in-store sales growth. Add Costco's reliable and profitable operations and price to sales ratio of lower than its comparable sector, and even at a near all-time high, Costco doesn't seem to be exuberantly priced.
Why share of Fastly (FSLY) plunged more than 26%?
From the list of today's biggest losers on Stock Card's Winners and Losers page, shares of Fastly (FSLY) dropped more than 26%. This technology company helps large media websites to deliver their content better, faster, and more secure. Of course, during the pandemic, it was one of the most needed technologies that all media companies required. However, now that the COVID-19 rush of living online is over, it seems the company is paying the price of being high in demand last year. After the latest quarterly earnings report, investors got spooked by the managements' flat revenue forecast for the next quarter.
The stock has fallen from the all-time high record of $136.50 per share. At the current price, not only is it priced under the average analysts' price target of $81.5 per share, its price to book value is lower than its comparable sector.
It may feel difficult to buy this dip after such a giant price drop. However, it is only logical that companies such as Fastly cannot maintain last year's growth. The company is relatively successful at retaining 139% of the net dollar revenue it generated last year. This means its customers stayed with Fastly and added more products and services from Fastly's product line-up.
Moreover, as you can see on Fastly's Stock Card, it has limited to no debt and can use the cash it owns to fund its future. I own a few shares, and I may add more if the price drop continues.
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