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GM stock drops, EU seals deal with Novavax, Boeing 737 MAX heads to China, Robinhood’s rally may fizzle

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Yahoo Finance’s Jared Blikre reports on the day's trending tickers.

Video Transcript

ALEXIS CHRISTOFOROUS: But first to the markets, where stocks are mixed right now, the Dow and S&P under pressure after a disappointing report from ADP which shows private employers added just 330,000 jobs last month. Wall Street was expecting about double that. We've got the Dow off more than 260 points, the S&P down 12, the NASDAQ, though, bucking that downward trend, up now about 32 points.

Want to hand it over to Jared Blikre who is live for us in our newsroom. And, Jared, I know you're going to start with GM. Tell us more about this stock's biggest drop in, what is it, six month?

JARED BLIKRE: Yeah, the biggest drop, I think, of the year. And let's go to the YFi interactive where we can see on our automotive heat map, it is the number one loser-- in the lower right here, down 8.6%. Now, this is a stock that had a nice pop at the beginning of the year-- this goes back to January-- and that was based on their EV plans. They had an investor day.

And you can see it's up slightly since then, but kind of sideways trading action for the most part. Now, I just want to go over some of the key highlights. They did miss on their bottom line. Their earnings per share came in a little bit short of Wall Street estimates. And that's kind of a rare deal for them.

One of the reasons they had made investments in Stellantis, Lordstown Motors, and Proterra-- those have been not the best investments. EPS took a $0.12 hit from that. They also are spending $800 million on a recall for the Chevy Volt's EV battery. And that's hitting their bottom line by $4.1 billion. So that's coming out of their $4.1 billion of earnings before interest and taxes. And they did manage to raise their guidance, but there's some doubt on the Street that that's actually going to happen when realized because of the semiconductor shortage, which is still probably going to linger into 2022. That's what the CEO Mary Barra said on the call.

Now, they could also face rising commodity costs, we've got the Delta variant outbreaks, and this could result in more supply issues. They might have to shut down plants around the world. So the good news is they have pricing power. And their pickup trucks are minting money for them, so are their SUVs. They do have tight supply, so that kind of eats into it.

But they do have a rosier picture for 2022 and 2023. So that's what we're looking at right now-- again, the worst performing stock on our electric vehicles and components, because, hey, they're an EV company, right, guys?

KRISTIN MYERS: All right, Jared, let's head across the pond over to Europe, because the EU has actually signed a contract for up to 200 million doses of a coronavirus vaccine-- this one coming from Novavax. Tell us a little bit more of the details there.

JARED BLIKRE: That's right. And if you take a look at our pharmaceuticals heat map, lots of red, but there are some bright spots here. And that is the virus stock-- the anti-virus stock. So Novavax itself up 21%. I'm going to show that on the screen here. This is the jump that we're seeing today kind of into this potential resistance area that it will have to clear-- but a big 21% pop there.

So this is going to be, let's see, 100 million doses of the vaccine up front with the option of an additional $100 million doses through 2023. And I have a quote from an EU Commission. They said the decision was based on a sound scientific assessment, the technology used the company's experience in vaccine development and its production capacities to supply the whole of the EU.

Now, I'm going to go back to the heat map here and sort by performance. You can see the top line there, Novavax, BioNTech, Moderna-- those are the top three. All those vaccine stocks doing well. And I should say that Moderna is going to report earnings within the next 24 hours, guys.

ALEXIS CHRISTOFOROUS: Yeah, looking forward to that. I also want to get to a Dow component and that is Boeing, Jared. I know it's a big day for them. Their 737 MAX heading to China for a key test to finally end that flight ban. What do you know?

JARED BLIKRE: That's right. About 184 countries have approved Boeing for the return of the MAX 737 to the skies. And you're looking at our Dow heat map here-- I'm going to pull up Boeing so you can see the price action, only down about 1%. Now, intraday, it did get a spike up on the news. But I guess we've given that back a little bit.

So a couple of details here-- it departed from 8:00 AM local time in Seattle's Boeing field, and it's on its way to Honolulu as we speak. Now, usually it would take a shorter route around the Arctic, but it's banned from Russia. So that's one of the other countries where it's not currently allowed to fly. So they're going to fly around the equator-- it's a longer route to China. Now, excuse me, Boeing sent previously a delegation of around 35 pilots and engineers to China last month to meet with regulators, but China has not purchased or made any orders for any Boeing planes in years.

That has to do with the trade tensions there. So the 737 MAX is their big money-maker. If they can sell some to China, that's going to be a huge win for them.

KRISTIN MYERS: All right, Jared, let's talk now about Robinhood. I'm looking at it right now-- up about 55% today, a nice pop over that IPO price, which is $38 a share, as you can see there sitting now at around $72. Jared, tell us more about what's happening with Robinhood.

JARED BLIKRE: Well, I got to say this has been a fun stock to track today. And I've had my issues with Robinhood before, but look at this chart here-- this is going back to their IPO. We had this big pop yesterday and it's overshadowed by what's happening today. And a lot of this has to do with the fact that this is the first day that investors are able to buy options on the stock. And so that means that they're able to use leverage, and that's creating a virtuous cycle of volatility that we see here.

So we got into the 80s. In fact, the stock was up over 80% at these highs, came back down. We've had several trading halts today, but we found some support around 60 just below that. And we are heading back up to 75. Now, I have some commentary from Bloomberg Intelligence, and they're saying that this intraday surge doesn't change the shaky fundamentals, and it compounds their concern about payment for order flow revenue through 2022, because their payment for order flow revenue dropped 34% in the second quarter.

That's how they make most of their money. They sell your orders to Citadel and other market-makers. They're also saying that the resurgent COVID-19 cases might keep workers at home and encourage day trading for a little bit longer. But we're not going to get back to those first quarter volume levels. And also, they got a bump from crypto. We know crypto has been mired in a bear market for some time.

So they say it's a $30 stock, but I will say that they're talking about fundamentals here. And as this latest meme stock exemplifies, fundamentals don't always matter, do they?

ALEXIS CHRISTOFOROUS: No they don't, sadly. All right, thanks a lot, Jared Blikre. We'll talk to you a little later on for the commodities report.