Tag Archives: Upstart

Business

Elon Musk’s takeover of Twitter has translated into huge user growth — for upstart social media platforms like Mastodon and Tumblr, according to new data

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Musk at a 2022 Halloween party.Taylor Hill/Getty Images

  • Since taking over Twitter, Musk has said Twitter’s active users have surged to new highs.

  • New data from SensorTower found that smaller rivals like Mastodon and Tumblr have also seen an explosion of growth.

  • Twitter installs have grown by 21% since Musk’s takeover, while Mastodon’s have grown by 657%, according to the data.

Since taking over Twitter, Elon Musk has boasted that the platform’s active users have surged to record highs.

The claim is unverified, though perhaps a rising tide is lifting all boats.

New data shows that while more people have downloaded Twitter on Apple’s app store and Google’s play store since Musk’s takeover, its growth is minimal compared to the explosion in downloads of smaller upstart rivals like Mastodon and Tumblr, as some Twitter users appear to be searching for alternatives.

Mastodon, which is a decentralized microblogging platform, saw downloads grow 657% in the 12 days following Musk’s ownership of Twitter, according to SensorTower.

According to the data, Tumblr, another microblogging service once owned by Yahoo, saw adoption surge by 96% in the US and 77% worldwide.

Twitter installs climbed 21% during the same time period.

To be sure, overall user numbers on Twitter eclipse those of Tumblr and Mastodon. Mastodon has 1 million global downloads, according to SensorTower, while Twitter had 238 million daily active users as of July.

However, the recent interest in smaller microblogging sites points to some users’ discontent with the recent chaos on Elon Musk’s Twitter and the growing demand for a replacement.

Many popular users on Twitter have encouraged their followers to move over to Mastodon, with some even adding “also on Mastodon” to their names on Twitter.

The app’s surge in popularity has even taken its founder, Eugen Rochko, off guard. He recently told NPR he has been pulling all-nighters to meet demand.

Tumblr has taken advantage of the newfound attention, trolling Elon Musk’s recent blue checkmark fiasco by offering to sell two blue checks for $7.99.

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Business

Xerox, Logitech, Upstart, Hibbett, Planet Fitness & more

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Tony Avelar | Bloomberg | Getty Images

Check out the companies making headlines in midday trading.

Logitech — The computer peripherals maker jumped 11.8% after Logitech reiterated its full-year guidance, which was lowered in July. Logitech has struggled with weaker demand after a boom in sales during the height of the pandemic.

Upstart — Shares surged 9.8% even after Mizuho initiated Upstart with an underperform rating, saying that there are more challenges ahead for the consumer lending company.

Stem — The stock rose 12.3% after UBS initiated Stem as a buy, saying that AI-driven energy storage company is a market leader that will get a boost from the Inflation Reduction Act.

Hibbett — The sporting goods stocks advanced 9.2% following an upgrade from Bank of America to a buy rating. The bank highlighted the company relationship with Nike and product availability among its reasons for liking the stock.

Xerox — Shares plunged 15% after the seller of print and digital document products and services reported disappointing earnings and cut its full-year revenue guidance. Xerox CEO Steve Bandrowczak said in a release that “profitability remains challenged by persistently high inflation and continued supply chain constraints.”

Brown & Brown — Shares of the insurance company dropped 11% after Brown & Brown missed earnings expectations. Brown & Brown posted earnings of 50 cents per share on revenue of $927.6 million. The company was expected to report earnings of 60 cents per share on revenue of $945.8 million, according to consensus estimates on FactSet.

Qualtrics International — Shares of the customer feedback software company jumped 7.7% after Qualtrics reported earnings that exceeded expectations, and raised its full-year outlook.

Ross Stores — Shares of the off-price retail jumped 5.8% following an upgrade to overweight from Wells Fargo. The bank called Ross Stores one of the “best ways” to trade the sector.

SAP — Shares of the German business software company advanced 6% after SAP reported quarterly results that topped expectations and maintained its full-year forecast.

PulteGroup — The home construction company jumped 5.9% despite disappointing earnings expectations. PulteGroup posted earnings of $2.69 per share on revenue of $3.94 billion. Analyst surveyed by Refinitiv were expecting earnings of $2.82 per share on revenue of $4.17 billion.

JetBlue — The airline slid 3.6% after a third-quarter earnings miss of 21 cents per share, versus a Refinitiv consensus estimate of 23 cents. Revenue was in line with estimates, at $2.56 billion. JetBlue had a quarterly profit of $57 million, due to elevated travel demand and higher fares, which helped offset rising costs.

Planet Fitness — The gym stock jumped 4.5% after Piper Sandler upgraded Planet Fitness to overweight from neutral, saying that shares are attractive and will get a boost from participation from younger generations.

General Motors — Shares of General Motors rose 3.6% after the automaker handily beat third-quarter earnings expectations. The company also maintained its full-year outlook.

United Parcel Service — Shares of the delivery company gained 1% after UPS reported stronger-than-expected earnings for the third quarter. The company earned an adjusted $2.99 per share, 15 cents better than analysts expected, according to Refinitiv. Revenue fell short of expectations, however, as its supply chain solutions segment declined year over year. UPS did maintain its full-year guidance.

General Electric — The stock declined 1.8% after General Electric cut its full-year outlook because of supply chain issues. The company otherwise posted stronger-than-expected revenue.

— CNBC’s Michelle Fox, Jesse Pound, Carmen Reinicke and Samantha Subin contributed reporting.

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Business

Bed Bath & Beyond, Carnival, Upstart and more

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A security guard stands next to a Bed Bath & Beyond sign at the entrance to a New York City store location.

Scott Mlyn | CNBC

Check out the companies making headlines in midday trading.

Bed Bath & Beyond — Shares of the retailer plummeted about 21% after the company missed revenue estimates and posted a wider-than-expected loss in the recent quarter. Bed Bath & Beyond also announced it is replacing CEO Mark Tritton.

Carnival — Shares of the cruise line operator fell more than 14% after Morgan Stanley cut its price target on the stock roughly in half and said it could potentially go to zero in the face of another demand shock, given Carnival’s debt levels. The call dragged other cruise stocks lower. Royal Caribbean and Norwegian Cruise Line Holdings each dropped more than 10%.

Upstart — Shares of the AI lending platform dropped roughly 10% after Morgan Stanley downgraded the stock to underweight from equal weight. The Wall Street firm said rising interest rates and a troublesome macroenvironment is hurting Upstart’s growth trajectory.

Bath & Body Works — The retailer’s stock fell nearly 8% after JPMorgan downgraded shares to neutral from overweight. The firm lowered its second quarter and full-year earnings estimates for Bath & Body Works after reducing second quarter average unit retail estimates by 4% year over year.

Teradyne — Shares of the semiconductor testing company slid 6% following a downgrade to neutral from buy from Bank of America. The firm said Teradyne’s exposure to Apple could ding the stock in the near term, given uncertainty around iPhone demand.

Tesla — Shares declined about 4% following a Wall Street Journal report that said Tesla is closing its San Mateo, California office and laying off 200 workers. CNBC confirmed the report.

General Mills — The stock jumped 5.7% after General Mills reported an earnings beat on the top and bottom lines. Still, the cereal company’s full-year profit estimates were weaker than expected, because of a consumer shift to cheaper brands.

O’Reilly Automotive — The auto parts company traded up more than 1% following an upgrade to buy from neutral from D.A. Davidson. The firm said O’Reilly is their “preferred way” to play the auto parts theme compared to AutoZone and Advance Auto Parts. Auto parts companies, which typically sell non-discretionary products, are expected to weather downturns better than other retailers.

McDonald’s — Shares climbed 1.5% following an upgrade to overweight by Atlantic Equities. The firm said hamburger chain will hold out as consumer spending slows.

Goldman Sachs — Shares rose 1.3% after Bank of America upgraded Goldman Sachs to a buy from a neutral rating and said the bank will thrive even in an economic slowdown.

— CNBC’s Yun Li, Tanaya Macheel and Samantha Subin contributed reporting

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Business

Dow Jones Futures: Market Rally Pauses As Tesla Dives; Upstart Leads 8 IPO Movers Late With Rivian On Tap

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Dow Jones futures fell slightly late Tuesday, along with S&P 500 futures and Nasdaq futures, as Upstart Holdings (UPST) and COIN stock headlined key earnings overnight. The stock market rally fell modestly as Tesla (TSLA) fell solidly again with the Rivian IPO on tap.




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UPST stock, Coinbase (COIN), FuboTV (FUBO), DoorDash (DASH), Toast (TOST), Unity Software (U), Doximity (DOCS), Global-e Online (GLBE) and Tesla EV rival Nio (NIO).

UPST stock, DoorDash, FuboTV and Unity Software came public in late 2020, while COIN stock, Doximity, Global-e Online debuted this year.

Nio stock, no longer a “new IPO,” began trading just over three years ago.

Most of these stocks have had been big winners, or at least have had strong runs over the past year. But many were big losers overnight, not a great sign for the market rally. Upstart earnings and guidance were strong, but UPST stock plunged about 20% after trading at key levels in recent days. COIN stock tumbled 10% as Coinbase earnings missed as crypto trading fell more than expected. Unity stock and DOCS also sold off hard following mixed results. TOST stock fell solidly while FUBO stock and Global-e did too.

DASH stock, however, soared about 20%. That signals a move back above its 50-day line and more for DoorDash stock.

Nio stock fell slightly after the China EV startup topped views but gave weak guidance.

Several more 2021 IPOs report on Wednesday, including Olaplex (OLPX), Applovin (APP), Monday.com (MNDY), Taskus (TASK) Dutch Bros (BROS) and Affirm Holdings (AFRM).

Rivian IPO

Capping the big week for new issues, the Rivian IPO will likely price Wednesday night, selling 135 million shares. Late Friday, the Amazon- and Ford-backed EV startup raised its expected RIVN IPO price range to $72-$74 a share from $57-$62. At the high end, RIVN stock would have an initial $65 billion valuation.

Rivian began limited deliveries of its R1T electric pickup in September, beating General Motors (GM), Ford (F) and Tesla to market. It’ll launch the large SUV RS1 by year-end. But much of its production focus will be on Amazon.com (AMZN), which has ordered 100,000 Rivian electric vans.

The Rivian IPO comes with Tesla stock pulling back, but after skyrocketing in recent weeks.

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Tesla Stock

TSLA stock tumbled 12% to 1,023.50 on Tuesday, following Monday’s 4.8% drop as CEO Elon Musk signaled that he would sell 10% of his Tesla stock stake. Late Monday, the company disclosed that Kimball Musk, Elon’s brother, sold $109 million worth of TSLA stock on Nov. 5.

But the EV giant has rallied for 11 straight weeks. Tesla stock is just below its 21-day line. It’s still well above a 900.50 cup-base buy point, according to MarketSmith analysis, but has given up the bulk of those gains.

Investors who bought at the 900.50 buy point have a decision to make on whether to take some TSLA profits — if they haven’t already locked in some gains. Earlier Tesla stock investors have a lot more leeway.

Tesla and OLPX stock are on IBD Leaderboard. Tesla, Affirm, Dutch Bros, Unity and UPST stock are on the IBD 50.

The video embedded in this article analyzed the market rally action as well as Tesla, MP Materials (MP) and Dutch Bros stock.

Dow Jones Futures Today

Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures dipped 0.1% and Nasdaq 100 futures declined 0.1%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally finally had a down day but didn’t give up much ground. The Dow Jones Industrial Average fell 0.3% in Tuesday’s stock market trading. The S&P 500 index lost 0.35% and the Nasdaq composite declined 0.6%, with TSLA stock and PayPal (PYPL) weighing on both. The small-cap Russell 2000 dipped 0.6%.

The 10-year Treasury yield fell 6.5 basis points to 1.32%, the lowest in several weeks.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) retreated 0.8%, while the Innovator IBD Breakout Opportunities ETF (BOUT) off 0.2%. The iShares Expanded Tech-Software Sector ETF (IGV) added 0.4%, with many software leaders delivering strong gains Tuesday. The VanEck Vectors Semiconductor ETF (SMH) edged up 0.1%.

SPDR S&P Metals & Mining ETF (XME) gave up 0.75%and Global X U.S. Infrastructure Development ETF (PAVE) dipped 0.3% after Monday’s infrastructure-fueled gains. U.S. Global Jets ETF (JETS) descended 0.5%. SPDR S&P Homebuilders ETF (XHB) popped 1.9%. The Energy Select SPDR ETF (XLE) rose 0.4% and the Financial Select SPDR ETF (XLF) sank 0.55%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) retreated 2.3% and ARK Genomics ETF (ARKG) lost 2.5%. Tesla stock is still the top holding across ARK Invest’s ETFs. Several ARK ETFs own COIN stock.

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Market Rally Analysis

After rising nearly 2,000 points from the early October low, the Nasdaq dipped 95.82 points on Tuesday, ending an 11-day win streak. The action on the stock market rally was perfectly normal and healthy. The Nasdaq is now 5.3% above its 50-day line while the Nasdaq 100 is 5.6% above that level. Both had been above the 6% mark, signaling they are extended.

Yes, a few leaders, notably Tesla stock, pulled back quite a bit. But in the context of huge moves over the past several weeks and months, the charts don’t look seriously damaged.

Ideally, the stock market rally would pause or pull back modestly for a few days or even weeks, letting the moving averages catch up and giving leaders a chance to offer new buying opportunities. If the Nasdaq quickly rebounded, it would be extended almost immediately.

The sell-off in UPST stock, COIN stock and more is worrisome. IPOs have been big winners since the coronavirus crash, putting the “new” in CAN SLIM. If Upstart, Unity stock and more run into trouble, it would be a bad sign for leading stocks and the market rally.

But, it’s just one overnight session for a handful of IPOs. UPST stock, et al. could rebound in Wednesday’s session or in the coming days. Or maybe these specific IPOs are due for a breather, but new issues and growth stocks in general still march higher.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

The stock market rally is still in good shape. There’s no strong reason to be reducing net exposure right now. But it may not be a great time to be making many new buys. If the market rally pulls back over the next several days, breakouts and early entries will likely struggle. If the market rally perks up over the next few days, how far could it go before flashing serious warning signs.

Tesla stock is a great example of why investors should not buy extended, even with a true market leader. Anyone who bought at one of several proper buy points in the past several weeks is still up solidly or sharply on TSLA stock. But if you bought at Thursday’s top, you’re down 18%.

This is a good time to let your portfolio work for you, while you work on your watchlists.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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Business

Dow Jones Futures Fall On Apple iPhone Woes; Market Rally Fizzles Again Despite Tesla, Upstart

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Dow Jones futures edged lower Tuesday night, along with S&P 500 futures and Nasdaq futures, as Apple stock retreated on a report that chip shortages will force iPhone production cuts. Crispr Therapeutics (CRSP) tumbled on study results.




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The stock market rally attempt had yet another weak close, finishing with slim losses Tuesday.

JPMorgan Chase (JPM) and Delta Air Lines (DAL) kick off earnings season early Wednesday, while inflation data and Fed minutes also are on tap.

Apple iPhone Cut

Apple (AAPL) will have to cut 2021 iPhone production goals of 90 million handsets by up to 10 million handsets due to extended chip shortages, Bloomberg News reported, citing sources. The Dow Jones tech titan reportedly is telling manufacturers that Broadcom (AVGO) and Texas Instruments (TXN) aren’t delivering enough components.

Apple stock fell more than 1% in overnight trading, with the iPhone production report perhaps not too big of a surprise. Shares are working toward recent lows. AAPL stock closed down 0.9% to 141.51 after the tech giant announced an Oct. 18 product event.

AVGO stock and Texas Instruments fell about 1%. Fellow Apple iPhone chipmakers such as Qorvo (QRVO), Skyworks Solutions (SWKS) and Cirrus Logic (CRUS) also edged lower.

One exception was QCOM stock, which rose slightly in extended trading. Qualcomm (QCOM) announced a $10 billion QCOM stock buyback program.

Crispr Stock Singed

CRSP stock slumped 8% in extended trade after releasing phase 1 test results of a gene-edited cancer drug. Crispr Therapeutics said Tuesday it’s planning to begin a pivotal study of its gene-edited cancer drug, CTX 110. Of the 26 lymphoma patients, 38% had no detectable cancer following the treatment. There were no major side effects.

Mixed Market Messages

But a number of high-beta growth names such as Tesla stock, Upstart Holdings (UPST), Zscaler (ZS) and Airbnb (ABNB) made strong moves, flashing various buy signals during Tuesday’s session. Solar stocks continued to rebound while U.S.-focused casino plays such as MGM Resorts (MGM) and Boyd Gaming (BYD) also rallied, triggering buy signs. Tesla (TSLA) rivals General Motors (GM) and Ford (F) continued to advance, with GM stock clearing an early entry and Ford nearing the top of a base. Matson (MATX) blasted above a short consolidation.

Tesla and ABNB stock are on IBD Leaderboard. UPST stock is on the Leaderboard watchlist. MGM stock is on SwingTrader.

The video embedded in this article discussed Wednesday’s market action and analyzed ZS stock, Matson and Boyd Gaming.

Why This IBD Tool Simplifies The Search For Top Stocks

Dow Jones Futures Today

Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures sank 0.2%. Nasdaq 100 futures retreated 0.15%. Apple stock is a Dow Jones, S&P 500 and Nasdaq component.

On the plus side, German software giant SAP (SAP) gave preliminary Q3 results above consensus and guided higher for the full year.

The September consumer price index is due out at 8:30 a.m. ET. Economists expect overall consumer inflation holding at 5.3%, with core inflation staying at 4%. At 2 p.m. ET on Wednesday, Fed minutes from the September policy meeting will be released, offering further insight.

Atlanta Fed President Raphael Bostic, one of the more hawkish Fed officials, said Tuesday that U.S. inflation is broadening and not just transitory. Fed Vice Chairman Richard Clarida said the “risks to inflation are to the upside.” He also added that conditions for starting a bond taper have “all but been met.”

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally attempt wavered between modest gains or losses for most of Tuesday’s session before closing on a sour note.

The Dow Jones Industrial Average dipped 0.3% in Tuesday’s stock market trading. The S&P 500 index fell 0.2%. The Nasdaq composite edged down 0.1%. The small-cap Russell 2000 climbed 0.6%.

The 10-year Treasury yield fell 3 basis points to 1.58%, after bond markets were closed on Monday. The 10-year yield has surged for several weeks.

Google parent Alphabet (GOOGL) sank 1.8% on Tuesday, retreating from its 50-day moving average and weighing on the S&P 500 and Nasdaq. Memory-chip giant Micron Technology (MU) slumped 3.6% on another grim memory price forecast from TrendForce. Several memory-exposed chip-equipment makers, including Applied Materials (AMAT), KLA Corp. (KLAC) and Lam Research (LRCX) edged lower.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) gained 1.65%, while the Innovator IBD Breakout Opportunities ETF (BOUT) advanced 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) rose 1.1%.

The VanEck Vectors Semiconductor ETF (SMH) sank 1%. Micron stock was a notable drag on SMH.

SPDR S&P Metals & Mining ETF (XME) edged up 0.25% and Global X U.S. Infrastructure Development ETF (PAVE) finished just above break-even. U.S. Global Jets ETF (JETS) ascended 0.8%. SPDR S&P Homebuilders ETF (XHB) ended essentially flat. The Energy Select SPDR ETF (XLE) nudged 0.1% higher and the Financial Select SPDR ETF (XLF) gave up 0.3%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rose 1.4% and ARK Genomics ETF (ARKG) climbed 2%. Both are close to multimonth lows. Tesla stock is the largest holding across ARK Invest’s ETFs.

Five Best Chinese Stocks To Watch Now

JPMorgan Earnings

JPMorgan earnings are due before Wednesday open, kicking off bank results this week.

On Tuesday, JPMorgan stock pulled back toward a buy point as the broader market and Treasury yields retreated. Bank of America (BAC), on tap Thursday, is just in buy range. Wells Fargo (WFC), Goldman Sachs (GS), Morgan Stanley (MS) and Citigroup (C) are all in consolidations.

Delta Earnings

Delta earnings also are early Wednesday. Other carriers will follow in the next few weeks, though several, including American Airlines (AAL), have given some preliminary guidance.

Delta stock, American and several other big airlines are trying to find support around their 200-day lines.

More broadly, Delta earnings will provide an early read for the travel sector, including hotels, casinos such as MGM and “tech” travel names such as Expedia (EXPE) and ABNB stock. With Covid cases falling sharply and restrictions starting to fade, travel should have a tailwind.

Stocks Flashing Buy Signals

Tesla stock rose 1.7% to 805.72 on strong China EV sales for September. The EV giant backed off intraday highs but closed above the 800 level for the first time in eight months. TSLA stock is now slightly extended from a 764.55 handle buy point. Intraday it cleared a three-weeks-tight entry of 807.07. But with Tesla stock up for seven straight weeks and on track for an eighth, it appears somewhat extended.

UPST stock vaulted 7.1% to 333.05, rebounding from its 21-day line and a short downtrend. Volume was below average though. Upstart stock has been a huge winner in the past few months and held up well, but a 21-day rebound in a market correction is high risk. After Tuesday’s big move, UPST stock seems extended even from that perspective.

Zscaler stock climbed 3.7% to 277.72, rebounding from near its 50-day line and breaking a trend line. ZS stock doesn’t look extended yet, and should have a new base after this week. The relative strength line is already at a new high, well ahead of ZS stock.

ABNB stock popped 3.65% to 172.75. Arguably, it’s breaking a short or longer trend line, with 177.06 as a resistance point. But it’s also well above its 50-day line.

MGM stock shot up 9.6% to 48.69 on bullish analyst comments. After consolidating in a buy range, the casino giant blasted past an alternate entry of 46.16. It appears extended now.

BYD stock climbed 4.3% to 66.75, breaking a trend line in a handle, offering an early entry. BYD Gaming has an official 67.50 buy point from a cup-with-handle base, according to MarketSmith analysis.

Matson’s stock shot up 8.35% to 89.57 after the company provided preliminary figures above consensus. MATX stock cleared a short consolidation above a prior base, topping an 88.09 buy point, though investors probably could have grabbed an entry earlier in the day.

GM stock rose 1.5% to 58.96, just above a 58.70 double-bottom buy point. It’s been finding resistance at this area for the past few days. Possibly GM could pause or form a handle around these levels, providing a safer entry. On Wednesday, LG agreed to pay up to $1.9 billion to General Motors over Bolt EV battery fires, covering most of the cost.

Market Rally Analysis

The stock market rally attempt didn’t move much Tuesday, but still managed to close poorly. The major indexes settled in the lower half of their ranges after finishing at or near session lows in the prior three sessions.

The market rally attempt still hasn’t proved itself. None of the major indexes have had a follow-through day, confirming the new rally.

The Nasdaq is no longer hitting its 21-day moving average. The Dow Jones and S&P 500 have retreated from around their 50-day lines to below their 21-day lines as well.

A number of leading stocks are acting well, notably software and travel-related names, but others are not.

Not only are leading stocks and the overall market in flux on a technical basis, but big news in the coming weeks could roil markets. The consumer price index and Fed minutes on Wednesday are part of an ongoing discussion about inflation and future Fed policy, with huge implications for Treasury yields and thus the stock market.

Meanwhile, earnings season is just about to get underway. Not only will we get a flood of official earnings reports over the next several weeks, but companies such as Matson, InMode (INMD) and Avantor (AVTR) are preannouncing results. While MATX stock and InMode jumped on good news, Avantor tumbled on in-line revenue.

So even if the market rally shores up or falters for a stretch, the heavy news cycle could trigger a reversal, or turbocharge the existing trend. That goes double or triple for leading stocks.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

When investors see everything from Zscaler to Louisiana Pacific (LPX) to Matson to UPST stock rebounding from key levels, it’s hard not to jump into this market. If you already own some stocks that are winning, that’s great. If they’ve run up sharply, you may consider locking in some partial profits.

But for new buys, investors may want to wait for the Nasdaq to at least get above and hold its 21-day moving average, with the S&P 500 getting to its 50-day line. Waiting until a confirmed stock market rally to add exposure also is a sound strategy.

If this market rally has real legs, you’ll have plenty of opportunities to take advantage. But if the market slides and breaks below recent lows, you’ll be glad you’re in cash or had minimal exposure.

If you do decide to add exposure now, you may want to treat new positions as swing trades, taking relatively quick partial profits, perhaps holding onto remaining shares if the stock continues to act well and the market steps up. Whatever you do, definitely be quick to cut losses.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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Business

Shein: The secretive Chinese upstart ‘making fast fashion look slow’

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“It kind of becomes a habit,” said the 20-year-old Hong Kong University student. “Before sleeping, I’m just like, ‘Okay, check in.'”

The platform Sachan is using belongs to a Chinese brand called Shein — pronounced “She In” — which has rapidly attracted a global army of teen fans on TikTok.

“They’re making fast fashion look slow,” said Erin Schmidt, a senior analyst at Coresight Research, a global advisory and research firm specializing in retail and technology. “They’ve changed the model.”

Sachan checks the Shein app daily for the same reason many others do: to get points. The more you get, the more you can save on purchases. Shein awards them to customers for everything from opening the app to watching live streams and entering outfit design contests.

“It is pretty addictive,” said Sachan, describing the experience as similar to playing a mobile game.

Shein’s ability to lure users to its platform is one of its main ingredients for success, along with its hyper-fast production process, bargain basement pricing and data-driven product offerings.

“I just stopped buying from H&M when I started using Shein,” said Sachan, who often scours the site for new accessories and once scored a necklace for 9 Hong Kong dollars ($1.20).

“Because I was getting the same things that I saw at H&M, but like, for cheaper.”

A rising star

Shein was born under a different name — ZZKKO — in China, where it was started in 2008 by Chris Xu. The experience he gained as a marketing and search engine optimization consultant would later prove instrumental in creating the site’s powerful algorithm, according to Coresight Research.

At first, the company only sold wedding dresses, said Schmidt. It later branched out to general womenswear, adopting the name “Sheinside.” In 2015, the company rebranded again, saying it wanted a name that was easier to remember and search for online.

Fast forward to the pandemic, which has helped Shein generate explosive growth and become one of the few Chinese consumer brands to win global acclaim. As of last October, it was the world’s largest online-only fashion company, as measured by sales of goods under the company’s own brand, according to Euromonitor International. The research firm declined to provide further information, saying that the finding was part of a proprietary project.

Shein competes with Zara and H&M for customers who want the latest trends for less, and all three companies sell their own branded goods. But the two longtime heavyweights also run brick-and-mortar stores, cater to a wider customer base and sell at slightly higher prices.

Shein’s more direct competition comes from the likes of British fast fashion retailers Boohoo and ASOS, which concentrate most of their firepower online, target young female shoppers and tend to offer more affordable items.

In the first half of this year alone, Shein’s app racked up more than 81 million downloads around the world. In mid-May, it overtook Amazon as the most installed shopping app in the United States across the App Store and Google Play combined, according to analytics firms App Annie and Sensor Tower.

Shein keeps users coming back to its app by rewarding them for virtually everything, from logging in each day to watching live-streams to entering outfit design contests. Credit: SHEIN

Amazon has regained its crown, although “daily installs between the two apps since then have largely remained close,” said Craig Chapple, a mobile insights strategist of Europe, the Middle East and Africa for Sensor Tower.

In recent months, Shein “has really exploded onto the scene,” said Schmidt. “Everybody wants [to know] everything that they possibly can about Shein.”

They may be disappointed. For all its success, the company is notoriously reclusive, with little known about its inner workings despite its stature as one of China’s most valuable privately-held businesses. As of last August, Shein had a valuation of $15 billion, according to PitchBook. By this summer, that had doubled to as much as $30 billion, with annual revenue reaching $10 billion, Bloomberg reported in June, citing unidentified sources.

Backers of the firm include marquee investors, such as Sequoia Capital China and Tiger Global. Shein declined requests for an interview, and did not respond to a request for comment on specific details for this story. Sequoia and Tiger Global declined requests for an interview.

A tight spot

Shein positions itself firmly as a global business, with an emphasis on distribution: It ships to more than 220 countries or territories. Its website has no mention of its backstory or even where it’s based, stating only that it is “an international” firm. In recent months, that has led to some suggestions that the retailer deliberately downplays its Chinese roots amid rising biases and political controversy.

“Given the current climate of geopolitical tensions, it can … make sense for Chinese entities to lay low,” said Matthew Brennan, who writes about Chinese mobile technology and is the founder of research firm China Channel. “They just want to do business. This is something that they don’t want to have to deal with. And so I don’t think we can blame Shein for taking that option.”

The murkiness, however, can be off-putting. Some customers, such as Sachan, have expressed concerns over the firm’s lack of transparency around how it produces its goods — and sells them at a low cost — as well as where it sources its materials.

Experts note that the company’s approach also makes it difficult to verify its reportedly impressive numbers, though they say that other metrics, such as app downloads, are often solid indicators of a brand’s reach, if not sales.

Lightning-fast fashion

Shein has made a name for itself by blitzing social media users with its affordable and trendy clothing catering to young women, including $6 crop tops and $9 minidresses. Similar to Boohoo and ASOS, the company relies heavily on influencer marketing, teaming up with internet stars and celebrities like Katy Perry and Nick Jonas to expand its reach.

The brand is especially popular with Gen Z shoppers on TikTok, where it has become a trend for users to post $1,000 Shein “hauls,” or large purchases. That kind of buzz comes on top of Shein’s affiliate marketing programs, which reward influencers handsomely for spreading the word about its products.

The company is also savvy about keeping users on its platform. Last September, it held a virtual fashion show exclusively on its app, which likely helped it pick up more users, noted Lexi Sydow, head of marketing insights at App Annie. Grammy-nominated singer Ellie Goulding was among the performers.

“They’re just so far ahead in terms of user experience,” said Brennan. “They mix together media and entertainment into the experience, and user-generated content and reviews.”

One of its key differentiators, however, is a concept that analysts are calling “real-time retail.”

They say that Shein has come up with an in-house algorithm that trawls the web — including its own massive customer database — to find out what fashion items are trending on search, and what people are responding to on competitors’ websites.

That data is then used by the design team to develop new items, according to experts. Even in the whirlwind of fast fashion, Shein is prolific: It drops as many as 500 fashion products a day, while Boohoo releases that many over a week.
Shein has also managed to take advantage of China’s manufacturing prowess, allowing it to cut down on lead times significantly. Researchers estimate its production schedule is as short as three to seven days, compared to the average span of three weeks disclosed by players like Zara.

That’s because Shein’s suppliers use the company’s back-end software, allowing them to get immediate information on user clicks and orders, according to experts.

“They’ve integrated their systems with their factory,” said Schmidt. “Based off of what is trending, like, what clicks, what sells, what starts to trend … the algorithm goes to the factory and says: ‘Start ordering material, start producing.’ So they’ve essentially cut out all of the middlemen.”

Other Chinese players have also invested heavily in smart manufacturing. Last year, for example, Alibaba (BABA) rolled out an AI-powered processing system to help small businesses streamline the apparel production process.

Shein is also careful to hedge its bets, only making small batches of each item until demand is proven.

“If a design sells out quickly, Shein places a large order of the product,” according to a Coresight Research report. “If it does not sell out quickly, Shein sells the remaining pieces and abandons the design.”

There are sustainability concerns. Like other fast fashion retailers, Shein is eschewed by some customers who worry about the environmental impact of its production processes, while others say the prices are too good to pass up. Sachan, for her part, cited considerations about waste and overconsumption as one reason she now tries to shop less on the app, even as she feels compelled to log in each day.

Changing the game

There’s one huge market Shein doesn’t have a major presence in: mainland China.

The company hardly markets itself in its home country for various reasons, starting with the headache of having to compete with Alibaba, the longtime industry leader.

“It’s not lucrative for them to sell in China,” said Schmidt. “[And] these products that would seem cheap to us are not as cheap to [consumers] in their home country.”

Instead, Shein concentrates on exports, naming Europe, the United States, Australia and the Middle East as key markets. Shein does not publicly break down what its top markets are.

It has recently also seen momentum in Latin America, with app downloads in Brazil skyrocketing 988% in the 12 months to June, compared to the previous year, according to App Annie.

The brand also remains a fan favorite in India, although its platform was booted out of the country last summer amid a crackdown on dozens of apps. Last month, it returned to India through Amazon’s Prime Day shopping festival, leading to excitement among customers.

In some ways, Shein’s rise could be compared to that of TikTok, according to Brennan, who authored the book “Attention Factory: The Story of TikTok and China’s ByteDance.”

“I see so many similarities,” he said, reflecting on how the short video app was regarded before it became a global sensation.

“It was viewed as something that was just for Gen Z. It was sort of viewed as frivolous entertainment … I think the competitors were looking at it similarly, and not taking it as seriously as they should have. And I’m sure that platforms like YouTube and Instagram much regret that now.”

— Anagha Subhash Nair contributed to this report.

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Dow Jones Today, Stocks Tightly Mixed As Disney Stock Rallies On Earnings; FDA Broadens Moderna, BioNTech Use; Upstart Upgraded

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Stocks crept into a mixed open Friday as Disney stock, rallying after its fiscal third-quarter report, helped prop the S&P 500 and the Dow Jones today. BioNTech and Moderna climbed, after the FDA broadened approval for their Covid vaccines. China stocks were weak, and chipmakers mixed. Meanwhile, IBD 50 stock Upstart Holdings surged on an analyst upgrade.




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The Dow industrials wrestled 0.15% higher, taking out another new high and moving to add to an already strong week. The S&P 500 defended a gain of less than 0.1%. The Nasdaq Composite fought its way into flat trade, as China-based stocks packed the bottom of the Nasdaq 100 and Apple (AAPL) reversed 0.2% higher after an early dip into the red.

IBD 50 stock Moderna (MRNA) popped 1.8% after the Food and Drug Administration approved the Pfizer (PFE)/BioNTech (BNTX) and Moderna (MRNA) Covid-19 vaccines as a third-application booster shot for patients with weak immune systems. BioNTech gained 3.1%. Pfizer rose 1.5%. All three stocks have been exhibiting signs of climax-run behavior.

Regeneron Pharmacueticals (REGN) caught some updraft from the rallying biotechs, gaining 2.4% and leading the S&P 500 in early trade. Regeneron is nearing the top of a buy range above a 592.94 cup-with-handle base buy point. The buy zone extends to 622.59.

Upstart Holdings (UPST) spiked 8%, leading the IBD 50 list, after Barclays upgraded the stock to overweight. The note also boosted Upstart’s price target to 230, from 130. The gain sent Upstart into a buy range above a 191.99 buy point in a deep 10-week cup base.

Aside from Disney stock, earnings news sent LMP Automotive (LMPX) up 3.8% and ZipRecruiter (ZIP) to a 4.5% gain. On the earnings downside, Cricut (CRCT) tumbled 17%, while Figs (FIGS) took a 6.5% dive. DoorDash (DASH) dropped 4.8% and Airbnb (ABNB) backed off 1%.

Chicken meat producer Pilgrim’s Pride (PPC) rocketed 22% higher after Brazil’s JBS (JBSAY) proposed a buyout of the remaining 20% of the company it does not already own at 26.50 a share. JBS shares shed 0.4%.

Dow Jones Today: Disney Earnings

Walt Disney (DIS) scrambled 4% higher, leading both the S&P 500 and the Dow Jones today, after topping analysts’ fiscal third-quarter sales and earnings expectations. But analysts remained concerned about theme park impact from the recent resurgence of Covid-19 infections. Disney reported strong subscriber growth, with Disney+ rising to 116 million paid subscribers. ESPN+ is at 14.9 million and Hulu has 42.8 million.

Aggressive investors might read a strong bounce above the 50-day/10-week moving average as a buying opportunity. The next most likely early entry for Disney stock comes at 186.39.

Chip Stocks: Nvidia, AMD, Intel

Chip stocks were mixed in a week that turned tough after an analyst’s industry price warning on Tuesday. IBD Leaderboard stock Nvidia (NVDA) added a fraction in early trade. The stock is down 2.3% for the week and testing support at its 21-day exponential moving average. Nvidia shares are less than 5% from a 208.85 flat base buy point, ahead of the company’s second-quarter report on Wednesday.

Advanced Micro Devices (AMD) gained 0.7% in premarket trade. Chipmaker Intel (INTC) dropped 0.7% on the Dow Jones today. The VanEck Vectors Semiconductor ETF (SMH) traded flat early Friday.

Vital Signs: Oil, Bond Yields, Bitcoin

Crude oil prices slipped early Friday, after a modest drop on Thursday ended a two-day rebound. West Texas Intermediate traded down 0.2% to below $69 a barrel. WTI prices remain up around 1% for the week, following the prior week’s 7.7% dive. WTI is trading 10.4% below its July 6 high, and up 42% since the start of the year. Oil prices could see some impact from the BakerHughes weekly rig count survey, due out at 1 p.m. ET.

The 10-year Treasury yield eased early Friday, dipping to 1.33% after settling on Thursday just below 1.37%. A six-day advance through Tuesday marked the longest rally in yields since January and left yields almost 6% higher so far for the week. Yields had touched their high for the year, just above 1.76%, in early April.

Stock Market ETF Strategy And How To Invest In The Current Uptrend

Bitcoin rallied almost 5% to trade around $46,575, after swinging as high as $46,667 and as low as $43,821 over the past 24 hours, according to Coindesk. Bitcoin touched a high above $64,829 in mid-April. Cryptocurrency plays Marathon Digital Holdings (MARA) and MicroStrategy (MSTR) traded up 5.3% and 2.7%, respectively.

China Notches An Up Week, Europe Rises

China’s markets slipped on Friday, but ended higher for the week, adding a second week to their rebound following a sell-off on regulatory fears. Hong Kong’s Hang Seng Index dropped 0.5% Friday, leaving it 0.8% higher for the week. The Shanghai Composite dipped 0.2%. The benchmark ended the week with a 1.7% gain, and back above support at its 10-week moving average. In Japan, Tokyo’s Nikkei 225 shed 0.1%, notching a 0.6% advance for the week.

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Among China gauges in the U.S. early Friday, the iShares MSCI China ETF (MCHI) was unchanged. The Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) dipped 0.2%. MSCI China was up 1.3% for the week through Thursday. The xTrackers Harvest fund had gained 1%. Technology tracker KraneShares CSI China Internet ETF (KWEB) traded 1.7% lower in early trade, and had gained 1.2% for the week through Thursday.

Europe’s markets defended their early gains in afternoon trade. The CAC-40 in Paris rallied 0.3%. Frankfurt’s DAX also moved up 0.3%. London’s FTSE 100 climbed 0.35%. The SPDR Portfolio Europe ETF (SPEU) advanced 0.5% in early trade, after a fractional gain on Thursday. The ETF is up 1.2% for the week, working on a fourth-straight weekly advance and trading just below a 44.06 buy point in an eight-week flat base.

5 Breakout-Ready Stocks To Watch

Century Communities (CCS) closed on Thursday less than 1% below a 72.60 buy point in a cup-with-handle base. The Colorado-based builder carries a 96 Composite Rating from IBD, ranking it the No. 1 stock in the residential homebuilders industry group. Shares slipped 0.4% Friday morning.

Chipmaker On Semiconductor (ON) spiked 15.9% in the first week of August, breaking out past a 44.69 buy point in a 16-week cup base. The stock has slipped back just below that buy point. The base’s buy range runs to 46.92.

A three-day advance has lifted Arch Capital Group (ACGL) into a buy zone, just above a 41.38 entry in a 15-week flat base. The buy zone tops out at 43.45.

Shipping giant Matson (MATX) is also sitting on a three-day rise, and working to add a third week to its rally. That has placed shares about 6% below a 79.15 buy point at Wednesday’s closing bell.

A 1.2% jump early Friday lifted industrial chemicals supplier Element Solutions (ESI) just below a 24.80 buy point in a very flat base. The base pattern clings bullishly to the chart’s 10-week moving average.

Nasdaq, S&P 500 and Dow Jones Today

August is shaping up to be a solid month, with the Dow so far up 1.6%, the S&P 500 ahead 1.5% and the Nasdaq Composite riding a 1% gain. Those are strong positions to be in as earnings season rolls toward its finish, an important back-to-school shopping season gets started, and as global supply chains and markets gradually mend.

The Dow Jones today heads for the starting bell with a 0.8% gain so far for the week. The index is neither too hot nor too cold and has put resistance at the 35,000 level, at least for now, in the rearview mirror. The S&P 500 has a 0.6% gain for the week through Thursday. The Nasdaq is down 0.1%, but managing to ride firm support at its 21-day exponential moving average.

For more detailed analysis of the current stock market and its status, study the Big Picture.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) remains in a buy range above a double-bottom base entry at 348.75. The buy range extends to 366.19. The leveraged ProShares UltraPro Dow30 (UDOW) remains in a buy range above what IBD MarketSmith analysis charts as a 76.99 buy point in an 11-week flat base. The buy zone tops out at 80.84.

A Mixed Week For Rebounding Small Caps

A three-week rebound among small cap stocks cooled this week, with the Russell 2000 down 0.2% through Thursday after meeting resistance at its 10-week line. The S&P Smallcap 600 has gained 0.2%, on track to extend its rebound to a fourth week. The index on Thursday marked its third-straight daily finish above its 50-day/10-week moving average.

That could mark an early entry to the SPDR S&P 600 Small Cap ETF (SLY), which was up 0.3% for the week through Thursday. The leveraged ProShares Ultra SmallCap600 (SAA) has a 0.7% gain for the week.

Find Alan R. Elliott on Twitter @IBD_Aelliott

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Business

Dow Jones Futures: $1.2 Trillion Infrastructure Bill Lifts Dow, S&P 500 To Highs; IPOs Upstart, FuboTV Are Big Earnings Movers

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Dow Jones futures were little changed late Tuesday, along with S&P 500 futures and Nasdaq futures. The stock market rally had a mixed session Tuesday, as Micron Technology (MU) and chips led a growth retreat. But the Dow Jones and S&P 500 hit all-time highs, with steel, financial, retail and housing-related stocks faring well as the Senate passed a bipartisan infrastructure bill.




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Cryptocurrency exchange Coinbase (COIN), gaming development software Unity Software (U), AI lending platform Upstart Holdings (UPST), online food ordering play Olo (OLO), sports streaming and would-be-gambling operator FuboTV (TV), Covid vaccine component supplier Maravai LifeSciences (MRVI) were just some of the recent IPOs reporting earnings late Tuesday.

Coinbase stock, Unity, Upstart, FuboTV, Oolo and Maravai all beat views. UPST stock surged up the right side of a base, signaling a definitive clearing of resistance from the past several weeks. Fubo soared overnight after closing just above its 50-day and 200-day lines. MRVI stock rose sharply after pulling back from recent highs.

Unity stock edged lower, not far from a bottoming base buy point. COIN stock rose slightly after guiding crypto trading volume lower. Olo stock retreated, signaling a move back below its 50-day line.

DRAM-amine For Growth Stocks

A report predicting weak DRAM pricing hit Micron stock, which sank 5.4%. Memory-exposed chip-equipment makers Applied Materials (AMAT) and Lam Research (LRCX) also were hit, losing 2.8% and 3.8%, respectively. Chip stocks came under pressure generally.

The chip retreat appeared to be a catalyst for growth names to erase gains or turn lower. Another factor: Treasury yields rose for a sixth straight session.

Steel, Infrastructure Stocks Jump

Meanwhile, rebounding crude oil prices, a continued winning streak for Treasury yields and the Senate approving a $1.2 trillion infrastructure bill gave real economy stocks a boost. Nucor (NUE) surged nearly 10% Tuesday, ArcelorMittal (MT) rose 3% and Steel Dynamics (STLD) gained 6%. NUE stock, MT stock and STLD stock already were actionable in recent days, but are looking somewhat extended now. SPDR S&P Metals & Mining ETF (XME) broke a downtrend in a handle while VanEck Vectors Steel ETF SLX cleared a handle buy point.

Martin Marietta Materials (MLM), Vulcan Materials (VMC) and Global X U.S. Infrastructure Development ETF (PAVE) all broke out.

Capital One (COF) rose 2.7% to 170.67, breaking past a 168.10 flat-base buy point, according to MarketSmith analysis. Wells Fargo (WFC) and Goldman Sachs (GS) extended breakouts, both still in buy range.

Lennar (LEN) is on the edge of breaking the downtrend of a handle, briefly flashing an early entry before settling for a 1.5% gain to 105.29. The official LEN stock handle entry is 108.06. Home Depot (HD) and RH (RH) are also showing positive action.

As for discount retail, Target (TGT) moved past a three-weeks-tight entry. Burlington Stores (BURL) blasted above a cup-with-handle base, after spending over a week just above or below the buy point. Several other discounters showed bullish action.

The XME ETF and WFC stock are on IBD Leaderboard. NUE stock and Capital One are on SwingTrader. COF stock was Tuesday’s IBD Stock Of The Day.

Dow Jones Futures Today

Dow Jones futures were roughly unchanged vs. fair value. S&P 500 futures fell slightly and Nasdaq 100 futures edged higher.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session. Recent IPOs reporting earnings, such as Upstart and Olo, are especially prone to volatile action and reversals.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally opened higher, but the Nasdaq soon turned negative as Micron stock sold off on DRAM pricing news.

The Dow Jones Industrial Average rose 0.5% in Tuesday’s stock market trading. The S&P 500 index eked out a 0.1% gain. The Nasdaq composite sank 0.5%. The small-cap Russell 2000 edged up 0.2%.

U.S. crude oil futures rose 2.7%. The 10-year Treasury yield rose 3 basis points to 1.34%, up from an intraday low of 1.13% on Aug. 4.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) sank 0.8%, while the Innovator IBD Breakout Opportunities ETF (BOUT) gained 0.5%.  The iShares Expanded Tech-Software Sector ETF (IGV) sank 1.2%. The VanEck Vectors Semiconductor ETF (SMH) slid 1.3%. Micron stock, AMAT and LRCX are all notable SMH components.

The Metals & Mining ETF XME popped 4% and the infrastructure ETF PAVE climbed 2.2%. U.S. Global Jets ETF (JETS) ascended 1.85%. SPDR S&P Homebuilders ETF (XHB) advanced 1.25%. The Energy Select SPDR ETF (XLE) rose 1.8% and the Financial Select SPDR ETF (XLF) just over 1%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) slumped 2.6% and ARK Genomics ETF (ARKG) 3%. ARKK fell just below its 200-day line and is near its 50-day. ARKG undercut its 50-day line.

Five Best Chinese Stocks To Watch

Market Rally Analysis

Growth stocks struggled in Wednesday’s stock market rally. Micron stock and DRAM pricing may have been a trigger, along with rising Treasury yields, for taking profits in a wide variety of growth names.

But the Nasdaq composite, as well as the IGV and chip ETFs, are still close to record highs.

On the upside, steelmakers like Nucor stock surged Tuesday, with several definitive breakouts. With MLM stock and other materials plays clearing breakouts, it’s clear that the Senate infrastructure bill buoyed many real world names. Financials like COF stock were strong amid rising Treasury yields, while housing-related fared well despite rising yields.

What To Do Now

Growth stocks still look to be in decent shape overall. Perhaps a few recent buys or adds are having some trouble, but that area of the market doesn’t look especially damaged. The past few days have shown the value of being diversified. If you owned, say, ArcelorMittal, Wells Fargo, Burlington Stores and Lennar stock, Tuesday could have been a neutral or positive session for your portfolio, offsetting losses in various growth names.

There’s nothing wrong with a lot of sitting. If you have various stocks that are up nicely over the past few months, you don’t have to take a lot of action.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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