On Friday, US equities finished mixed, with the tech-heavy Nasdaq Composite (^IXIC) posting a fresh record high. Investors were boosted by the potential of a reversal in interest rate rises.
The Nasdaq, which began the day in the negative, turned into positive territory by mid-afternoon, closing up around 0.2%. The Dow Jones Industrial Average (^DJI), which is eyeing the critical 40,000 milestone, dipped approximately 0.7% while the benchmark S&P 500 (^GSPC) declined by 0.1%.
The gauges saw significant weekly gains, reaching all-time closing highs as the Federal Reserve alleviated concerns that it would reduce its projection for rate reduction this year. Optimism that borrowing costs have peaked is also high, with signals that other major central banks are preparing to turn.
US markets finished mixed on Friday, with the tech-heavy Nasdaq Composite (^IXIC) setting a new record high.
The Nasdaq, which began the day in the negative, turned into positive territory by mid-afternoon, closing up around 0.2%. The Dow Jones Industrial Average (DJI) dropped 0.7%, while the benchmark S&P 500 (GSPC) dipped 0.1%.
Shares of the sports brand fell 15% after the company’s first-quarter outlook disappointed investors. The business predicts Q1 profits of $2.35 to $2.40 per share, which is lower than the consensus estimate of $2.55. The retailer’s first-quarter revenue prediction of $2.18 billion to $2.2 billion was also lower than expected. Wall Street had hoped for $2.26 billion.
Tilray shares increased by more than 15% on Friday after Germany’s parliament approved the partial legalisation of cannabis for personal use. The announcement comes after Vice President Kamala Harris asked the narcotic Enforcement Administration to “get to it” with its study of marijuana’s classification as a less-dangerous narcotic. Other marijuana companies, notably Cronos Group (CRON) and Canopy Growth (CGC), rose 8% and 58%, respectively, on the announcement.
Citi analyst Ron Josey is bullish on Zillow’s (Z) shares.
In a recent client note, Josey reaffirmed the stock’s Buy rating with a price objective of $68 following the National Association of Realtors’ landmark $418 million settlement of litigation over its commission regulations last week.
The announcement of this settlement pushed shares of Zillow and other real estate companies down last Friday, with investors viewing the verdict as a negative for real estate agent fees and, as a result, marketing expenditure and lead generation on platforms like Zillow. Zillow shares fell almost 1% on Friday, selling slightly under $51 per share.
However, Josey does not believe that this event will fundamentally change Zillow’s story.
“Our judgement is that the settlement does not cancel or eliminate compensation for buy-side agents. In fact, you can still proceed with it. And a sell-side agent can still do that, but perhaps not through the MLS,” Josey told Yahoo Finance Live.
As part of its settlement last week, the NAR announced a new set of regulations that ban agents’ remuneration from being published on portals such as the Multiple Listing Service (MLS), which lists the vast majority of houses sold in the United States. According to Josey, these modifications will not have an impact on Zillow’s online house listings platform.
“Zillow has historically gotten buy-side leads, and the kind of thought right now [is that buying agents’] commissions are going to be under pressure, potentially going to zero, which is bad for Zillow,” JMP Securities analyst Nicholas Jones told Yahoo Finance over the phone.
According to Jones, Zillow uses a market-based pricing strategy, in which the website directs leads to the agent who spends the most. Furthermore, buy-side involvement accounts for around 70% of the lead volume.
In principle, “if [buyers’ agents’] revenue declines, they would spend fewer advertising dollars, right? “That’s kind of the debate,” Jones stated.