The weak ADP report mirrors that of the JOLTS (job opens) data posted yesterday. The ADP data of 103,000 jobs added missed expectations. The market opened higher in response, as a weak labor market would encourage the Federal Reserve to cut interest rates.
The market is winning its fight against the Fed. U.S. Treasury yields are falling, with the 30-year bond dropping 75 bps and the 10-year treasury down by 65 bps. Investors may buy TLT and IEF exchange-traded funds to profit from the perception of falling interest rates.
In the tech sector, PayPal (PYPL) and Toast (TOST) initially dropped 0.9% and 2.6%, respectively, when Bank of America downgraded them. Analyst Jason Kupferberg is forecasting more competition and slower top-line business momentum for Toast.
The analyst questioned the new PayPal CEO’s time needed to earn Street credibility. The leadership change will naturally take time. PYPL stock is -21% YTD with shares bottoming at $50.25 in late Oct. Chances are better that PYPL stock will continue trending higher, so the downgrade is unwarranted.
Among the most actively traded stocks, Palantir (PLTR) is ranked fifth. The software firm’s stock peaked at ~ $22 and last traded at $17.80. Tech investors are betting on the sector through SOXL (Bull 3X) and SOXS (Bear 3X) today.
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