U.S. stocks improved on Wednesday after the Federal Reserve hiked interest rates by 0.25%. The S&P 500 Index surged 0.8%, the Dow Jones Industrial Average wafted up 0.5% and the Nasdaq Composite gained 0.7%. In fact, just about everything rose — stocks, bonds, MLPs, BDCs and REITs, even commodities.
Thus Bank of America Corp (NYSE:BAC) stood out as a rare loser yesterday, and it’s limping back into Thursday’s trade. Meanwhile, GoPro Inc (NASDAQ:GPRO) and Jabil Circuit, Inc. (NYSE:JBL) are worth a watch this morning after the pair of companies dished out headlines of their own.
Here’s what you should know heading into Thursday’s trade:
GoPro Inc (GPRO)
GPRO shares are up big Thursday morning after GoPro announced plans last night to reduce its workforce.
The action camera maker said it will eliminate nearly 300 jobs in its third set of cuts in roughly 15 months. GoPro is trying to lower spending by $200 million in 2017 in an effort to achieve profitability. The cuts will include some current GoPro workers, but also the elimination of a number of open positions.
That news came alongside the announcement that GoPro expects to hit the high end of its forecasts for Q1 revenue.
Stifel analyst Jim Duffy, who maintained a “hold” on GPRO stock, had a mixed view of the plan. On the one hand, he said he was “encouraged” by GPRO’s spending discipline, and approved of the company’s Q1 results. On the other hand, he admits GoPro could be cutting too deep.
GoPro is still reeling over a $373 million loss in 2016 stemmed in large part thanks to the delay of its Hero5 cameras and the recall of its Karma drone.
GPRO shares were shooting more than 10% higher in Thursday’s early trade.
Bank of America Corp (BAC)
So much for that.
BAC shares were up marginally in Thursday’s premarket action, following a Wednesday “sell the news” event in which financials reversed course after the Fed’s interest rate news.
Bank of America and Citigroup Inc (NYSE:C) were among a number of big financials that actually finished lower following the announcement, which was largely expected to encourage investors of the big banks, who theoretically should benefit from wider net interest margins.
That said, it appears now the news was more than baked in. Many had considered the March rate hike a given, and financials have widely rallied already from the dual drivers of expected rate hikes and an anti-regulation Trump administration. The Financial Select Sector SPDR Fund (NYSEARCA:XLF) had run up more than 25% since the November elections, paced heavily by BAC stock and its 50%-plus run.
BofA has cooled off of late, though, trading basically flat over the past week ahead of the Federal Open Market Committee’s (FOMC) meeting.
Jabil Circuit, Inc. (JBL)
Jabil Circuit posted its fiscal second-quarter results Wednesday, prompting an uptick on Thursday.
The St. Petersburg-based electronics manufacturer and servicer revealed earnings of 48 cents excluding certain items for the period, marking a 16% decline compared to the year-ago period. Analysts were calling for earnings of 46 cents per share.
Despite the earnings slip, revenue was better than the year-ago period by 1%, coming in at $4.45 billion. The Wall Street consensus estimate had anticipated revenue of $4.37 billion.
For the current quarter, Jabil Circuit is in line to earn 29 cents per share, excluding certain items, a 71% increase. Sales will come at $4.4 billion, a 2% rise year-over-year.
JBL, which is up 14% for the year-to-date, is tracking a fractional gain at Thursday’s open.
