Why Pinterest (PINS) Stock Is Trading Lower Today
What Happened:
Shares of social commerce platform Pinterest (NYSE: PINS) fell 5.3% in the morning session after market volatility increased (Nasdaq down 2.5%, S&P 500 down 1.5%) following the underwhelming jobs report, which raised more questions about the health of the economy. The Bureau of Labor Statistics reported that non-farm Payrolls for the month of August 2024 revealed that the US economy added 142,000 jobs. While the growth represented a significant improvement from the previous month (+89k additions), it fell below the 161,000 consensus forecast. In addition, the unemployment rate clocked in at 4.2%, roughly in line with expectations.
Following the report, the consensus expectation continued to point to a higher probability of a 25 basis points (0.25%) rate cut during the September 2024 Fed policy meeting. Overall, the report offered limited clarity on how the new data might influence the Fed's policy decisions in the coming months, as it presented arguments that could support both bullish and bearish perspectives.
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What is the market telling us:
Pinterest’s shares are quite volatile and over the last year have had 8 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 22 days ago, when the company gained 5.6% as the major indices soared (Nasdaq +1.9%, S&P +1.2%) after Walmart's earnings and retail sales data revealed strong consumption patterns in the U.S. economy. Walmart exceeded analysts' revenue and EPS expectations in Q2'2024.
Moving on, the company raised its full year outlook for net sales and EPS as well, another major positive. CFO, John David Rainey added "We see, among our members and customers, that they remain choiceful, discerning, value-seeking, focusing on things like essentials rather than discretionary items, but importantly, we don't see any additional fraying of consumer health."
Pinterest is down 19.3% since the beginning of the year, and at $29.23 per share it is trading 35% below its 52-week high of $44.98 from June 2024. Investors who bought $1,000 worth of Pinterest’s shares 5 years ago would now be looking at an investment worth $962.45.
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