Stocks moving after the close: Goldman Sachs, Morgan Stanley, Alibaba, Roblox
Yahoo Finance Live co-hosts Dave Briggs and Seana Smith check out several trending stocks following mixed market closings after Tuesday's bell.
Video Transcript
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SEANA SMITH: All right, let's talk about some of the biggest movers, biggest stock stories of the day. First, we got to take note of the moves that we saw in Goldman Sachs, and also what we saw in Morgan Stanley. I mentioned the fact that the Dow was off 391 points. A lot of that had to do with underperformance that we saw in Goldman with that stock closing off about 6 and 1/2%. The drop there coming after the company missed on earnings on both the top and bottom lines, posted a profit drop of just about 70%.
And comparing that with what we heard from Morgan Stanley, Morgan Stanley numbers were actually relatively strong, especially when you're comparing it to what we saw, more broadly speaking, across that sector. But Morgan Stanley beating on both the top and bottom line. Record wealth management revenue, that sent shares up nearly 6% today.
They also posted some growth at their trading business. CEO James Gorman saying that he is more confident that deal-making is going to come back around once the Fed does, in fact, pause its rate hikes. And that's a big contributing factor to some of the gains that we're seeing in Morgan Stanley today there, Dave.
DAVID BRIGGS: Yeah, really the only optimistic tone we heard from a big bank CEO, and largely because wealth management. But again, they, like everybody else, struggle with investment banking, which is essentially down about 50% for all the big banks, which drove Goldman Sachs to that disastrous report, profits down about 70%. So, yeah, Morgan Stanley really dragging the Dow down-- up and Goldman Sachs driving it right back down.
What's the real theme? Investment banking is going to struggle. Set aside a billion dollars, and everybody set aside hundreds of millions, if not more, for future loan losses. Really, the two themes that have emerged, with everyone predicting a mild recession ahead, is really the bank story.
SEANA SMITH: Yeah, certainly, it is. And I think you have to really just-- it begs the question as to how bad it's going to get. And if you compare some of the commentary, at least for Jamie Dimon now saying we're expecting a mild recession, that's a huge step down from the hurricane that he had predicted just about a year ago. So maybe things aren't going to be as bad as some investors had been bracing for. But I think we can really bet on a slowing-- slowing growth, slower growth environment going forward.
DAVID BRIGGS: Jamie Dimon's never going to outrun the hurricane, is he?
SEANA SMITH: I don't know.
DAVID BRIGGS: You think 10 years from now, we're still talking about the hurricane?
SEANA SMITH: I hope not. I hope something else happens between now and then. But at least--
DAVID BRIGGS: He's accomplished an awful lot. But that is every time--
SEANA SMITH: And he walked it back. To be fair, he did kind of walk it back, put it more in context. But really, that hurricane headline grabbed a lot of headlines.
DAVID BRIGGS: It's a tombstone headline. All right, let's talk about Alibaba, shares falling on the first day of trading since famed meme stock leader Ryan Cohen bought shares in the Chinese e-commerce giant. Baba shares sinking as a slew of warning signs come out of China, including declining population and shrinking GDP growth. It is interesting when you look at some of the big losers on the NASDAQ on the day, Baidu, JD.com, Pinduoduo, three of the biggest four losers on the NASDAQ.
But back to Ryan Cohen and his move here with Alibaba. Look, likely to be unsuccessful. This is not a meme stock. This is not anything like Bed Bath & Beyond or GameStop for the obvious reason that you're dealing with the Chinese government here.
You're not just talking about investors. You're not talking about our markets. You're talking about one thing you cannot control is the Chinese government, who is obviously a stakeholder and has really clamped down on the Chinese tech sector. Even if that's loosening, they ultimately have the word here, the last word. And I don't think Ryan Cohen is likely to overcome that.
SEANA SMITH: No. I don't think he's going to have the outsize impact that he has had on some of the other companies. And also not to mention Alibaba is a stock that has a $300 billion market cap. So just given the sheer--
DAVID BRIGGS: Right.
SEANA SMITH: --size of it--
DAVID BRIGGS: Right.
SEANA SMITH: --you have to question about how much outsize impact he's going to have. He does seem to be that he will be pushing for more buybacks from Alibaba. But of course, we will see how all this plays out.
DAVID BRIGGS: Does he just want more retail traders to get involved with the stock? Is that ultimately the goal? He knows what he cannot accomplish here. He knows how small that is in terms of their overall market cap.
SEANA SMITH: Yeah, and it seems to be, at least taking a look at the reaction from the Street so far, he could get more overseas investors interested in Alibaba again, which, in fact, if he does do that, that, of course, would be a positive here for the stock. He is a high-profile investor. We know he does have a very core following here. So it could add some positive sentiment here to Alibaba, which has been down pretty substantially over the last two years.
All right, let's get to a big winner here and that is Roblox, the stock closing up nearly 12%, leading the NASDAQ higher. The driver is solid bookings update here from the company, Roblox estimating that bookings of up to 450 million for December. That beat the Street's expectations. It's important to point out that shares have actually been down over 50% in the past year.
And this company is going to stop reporting its monthly numbers this spring. But given the outsized impact that these numbers are having on the stock today, certainly worth it to mention it, daily active users in December jumping 18% year-over-year to 61 and 1/2 million, hours engaged, Dave, almost 5 billion. Impressive numbers here from Roblox. And we're seeing that reflected in the stock move today.
DAVID BRIGGS: Yeah, look, it is a solid, solid number to come out. Can you bet on this long term? It doesn't fit any of the patterns that we've seen in gaming. It doesn't look sustainable when you look at the overall market.
It looks like largely something we saw in the short term. But you've got to look at a company that was at, what, $80 in December '21. So it's-- all the positive was really taken out of it. Now-- now there's some upside. I don't believe this is sustainable, but we shall see.
