|
 Shares of eBay Inc. were falling 2.5% in Tuesday morning trading after UBS analyst Kunal Madhukar downgraded the stock to neutral from buy, writing of growth concerns regarding the online marketplace. "Expectations are low, with non-Focus categories declining and with Focus categories, which are doing better, comprising purely discretionary spend which could be disproportionately impacted in a downturn," Madhukar wrote in a note to clients. The downgrade comes amid a UBS analysis of how the e-commerce sector could fare in a downturn, with Madhukar highlighting the rising possibility of a recession. He sees "greater macro sensitivity" for the e-commerce space in a modern recession, whereas e-commerce was still a small portion of overall retail sales during the financial crisis. Additionally, he worries that when the market recovers, eBay "could lag smaller-cap peers (which are likely to grow much faster in a recovery) until investors have better visibility into organic growth at eBay." Shares of eBay have declined 35% so far this year as the S&P 500 has dropped 19%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
|
|
After months of surging inflation, the S&P 500 finally broke down into bear-market territory, ending a two-year-plus COVID recovery bull run.
The catalyst, of course, was Friday's surprising revelation that consumer prices soared by 8.6% in March - a report so toxic that Wall Street was still digesting it today.
SEE MORE UBS's 43 Top Stocks for a Volatile Market
"The hot inflation report provided a double dose of bad news for the economy and for stocks," says Paul Christopher, Head of Global Market Strategy for the Wells Fargo Investment Institute. "First, it added to the pressure on households' real (inflation-adjusted) income, and second, it stoked the debate over more aggressive rate increases by the Fed beyond the two half-percentage-point hikes expected next week and at the late July policy meeting. … Interest rate futures contracts are now pricing in a third half-percentage-point rate increase at the policy meeting on Sept. 20-21."
And in fact, some experts warned that the Fed might yank even harder on the reins at this week's Federal Open Market Committee (FOMC) meeting.
Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.
"With cost pressures showing no signs of easing, a 75-bp move cannot be ruled out at this week's FOMC meeting," says Priscilla Thiagamoorthy, economist at BMO Capital Mark
|
|
