It's time for Yahoo Finance's market minute. Stocks are jumping. The S&P 500 breaking above the 6,000 level for the first time since February on the back of that stronger than expected May jobs report. President Trump taking to Truth Social to celebrate the data and call for the Fed to cut rates saying quote go for a full point. Plus, Tesla is rebounding from Thursday's slump as investors hope for a cool down in the feud between Trump and CEO Elon Musk. The online dust-up initially leading to a more than $150 billion wipeout of Tesla's value and Lululemon shares sinking after the retailer cut its full-year profit guidance citing higher tariff related costs as well as increased markdowns. A number of analysts slashing their price targets on the stock while maintaining their ratings including BMO Capital, NEM, and TD Cowen. That's your Yahoo Finance market minute. For more what's trending on Yahoo Finance, you can scan the QR code below to track the best and worst performing stocks of the session.
Welcome to Wealth everyone. I'm Brad Smith and this is Yahoo Finance's guide to building your financial footprint. Our community of experts will give you the resources, tools, tips, and tricks that you need to grow your money. On today's show, the labor market looks resilient. Wage growth rising by more than expected in May. We'll hear from an expert about what this really means for job seekers. And we have the CEO of Om Health off of their $150 million IPO live from the NASDAQ. Our very own Angelie Kamlani brings us that interview in just a few moments. Plus, we get a read on the consumer with the CEOs of Rent the Runway, Tanger Outlets. You don't want to miss that. Huge conversations coming up over the course of today's show. Let's dive right in. First, let's begin as we always do. Let's take a look at some of the market action. We are 90 minutes into the trading day. Major averages higher across the board. Stocks rising to end the week after a stronger than expected May jobs report. Joining me now, we've got Thomas Martin, Global Investments, senior portfolio manager. Your strategy right now is to maintain diversification. So, walk us through how you're doing that.
Yeah, so we have exposure to really all aspects of the equity markets both in the United States and abroad, but we're fairly neutral in terms of that exposure with regard to growth and value and large and small. Our biggest overweight really is in the midcap stocks and in midcap growth, and we are underweight in international companies but we still have some decent exposure there. We have a duration neutral in fixed income and we have some one place where we're a little bit more diversified or more conservative is to have a little bit of dry powder and cash that we can use going forward. And in the alternative space we have a fairly large exposure to gold and the gold miners which has been a good substitute for the equities as it's been about as strong as those markets have been.
And so all that in mind coming into the start of this week we were already 98% of the way through the S&P 500 earnings reports. And so as we essentially kind of close off this earnings season, what are the anticipations for how investors should position themselves knowing that there are going to be some areas where there was no guidance or diminished guidance that they're going to have to measure up against? Does that set us up for any type of relief in the next earning season?
Well, I think what's interesting about the earnings is that for the first quarter, coming into the quarter, we were looking for about 7% growth. And exiting the quarter with the actual experience, it was about 13% growth. Now, in the meantime, the estimates have been lowered for the second, third, and fourth quarter and therefore for the full year. So growth expectations have come down a bit notwithstanding the strong quarter and there are a lot of crosscurrents in the market. Companies are not getting any credit for saying they don't know what's going to happen. And companies that are saying we have some degree of confidence are getting credit for that. So our approach has always been an earnings-based approach, looking at what happens with their estimates. And so we want to focus on those companies that are able to work their way through it and deemphasize the companies that are having more struggles.
And so, according to data from FactSet, Magnificent 7 companies reported earnings growth above 25% for the first quarter. So for the other 493, what do those opportunities look like especially as it relates to maintaining their earnings growth or trying to solidify confidence among investors and where are those opportunities from your perspective?
Yeah, so you still have opportunities in the healthcare area although the stocks certainly haven't reacted very well, but the earnings growth there is expected to be above 10%. And we see opportunities in the communication services sector. So there are a number of companies there that are in the more entertainment type economy, the experiences economy. And we want to be focused on those names. Those companies are reporting pretty well. Consumer names that are also in the experiences area are faring well and so we want to have some exposure there. Also in the industrials area, the AI trade, the electrification trade, those are companies that are continuing to see good prospects not just now but for quite a while into the future.
Just lastly, while we have you here, you in your notes to us said that the Fed is in extended skip mode despite the president tweeting out or I should say truthing out he posted on social that he wants of course as he's continued to say in the past for the Fed to cut rates. The likelihood of that and walk us through your Fed in extended skip mode.
Yeah, of course, President Trump has always wanted rates to be lower. So that's not really a surprise and it's kind of counter to what we saw in the data today which was a stronger economy and a quite resilient labor market. So the expectations for the Fed actually to cut were increased because the data right before this was more stagflationary potential. And so you got a rising in the expectation for a cut in September and then a second one in December. That's backed off a tiny bit, but not very much. The Fed just continues to say they want to be patient, they want to be measured, they want to be careful. And I think looking for a cut in September just to have a cut doesn't really stack up with that kind of a philosophy. So our view is that there's a pretty high bar for a cut. Certainly they don't want us to go into a recession, and if we get some data that is definitely pointing in that direction, we think the Fed will take action, but we just don't see that happening. And yes, there's a lot of uncertainty with regard to what will happen with the tariffs, but that's exactly it. It's uncertain. We don't know what these negotiations are going to produce. Could have no tariffs, could have 10% tariffs, could have higher than that. And so when we get that information, the companies will react and consumers will react and we'll see what the Fed does when they get some actual real data. Thomas, good to see you. Thanks so much as always for the insights.
Great. Thanks so much. Chronic care company Om Health is set to begin trading Friday under the ticker OMDA after raising $150 million in its IPO. Angelie Kamlani joins me now from the NASDAQ with the Om Health co-founder and CEO Shawn Duffy. Angelie, take it away.
Thank you so much, Brad. You're right. Right here. I have with me Shawn Duffy who is the CEO of Om Health and a co-founder. Sean, thank you so much for joining us today. And I mean, really exciting day. You're going with an initial public offering of 7.9 million shares at $19 per share. Talk to me about why now. Why is this moment so important because you're the second digital health company to go public this year and all eyes are on you.
Oh, well, firstly, yeah, thank you for having me. Such an exciting day. So, congrats to everybody at Om Health. So the why now really it's a mix of what we see in the business. What we love is we've expanded from one care area to four. We love that last 12 months revenue grew 44% while on the back of only 11% increase in opex. And meanwhile we like what we see in this world of GLP-1s and feeling the customer demand. So that's the business and then the capital markets have in many ways asked us to come in and these are not shy investors. You know if you pause for that five minutes at the end and be like what do you think like it dislike it? Would you be interested? They'll tell you. So we felt pull.
That's really good and I'm glad you brought up the GLP-1s because I feel like that has been the focus on the company though you do have other chronic diseases that you cater to. Why is it the moment right now even though you don't sell GLP-1s and you don't prescribe them? Why is it so important to meet the moment now and say go public now versus during that pandemic time where a lot of digital health companies were coming to the market?
Well, yeah. I mean starting backwards, in the pandemic era we had just expanded to new care areas and I had sensed that these benefits leaders would really prefer working with one partner across multiple care areas but we had just started that. And when you're becoming a public company you want to make sure to have the proof points out there. We'll hang out, we'll stay private, there's no rush. In retrospect it's a great decision, you know that worked out. And then for your comments, I mean the GLP moment hit it almost feels like the entire journey leading up to today left us in a place to be able to serve our members on these meds because an injection is not getting to know you. An injection's not saying what might a week look like in your eating behaviors, your exercise behaviors, your strength training, your activity, and that's where we can come in to operate alongside the med.
So, when we're talking about these patients that you care for, you're guiding them through their journey, through their health journey. And part of it is digital technology and technology that didn't exist when you founded in 2011, right? So, you've had to spend a lot keeping up to pace with what the technology is, including AI, I'm assuming, as well. But there's also the digital tech and wearable side of it. So, CGMs or continuous glucose monitoring devices are part of that story. We see that as used largely by diabetics, but it's become part of sort of the general public sphere. I see on social media folks just wearing CGMs tracking their food. So, is that included as part of the journey? If someone has got access to a CGM on their own, can they come to you and be part of the journey there as well?
Yes. So, I mean CGM's critical especially for our members who have diabetes and so we have a device arsenal if you will, scales, blood pressure cuffs, glucometers and CGMs. And I have a really neat relationship with Abbott and a proprietary relationship with Abbott to ensure that all our members with diabetes start their journey with the CGM because our care teams love it. The fidelity of the data you get from CGM versus A1C gives them a better path toward helping our members and our members love it. And so it's a combination of the devices, our compassionate care teams and the software that ties the room together and gets outcomes. And a CGM has been a critical part of that journey for our people with diabetes.
You mentioned that you were pulled into the market kicking and screaming against your will, I'm sure. And so, I'm curious about what you want the market to do for you because you're going to start getting all sorts of questions about profitability, about how the company is growing and the markets and lines and areas and that's going to be a lot, you're going to be under a microscope like you've never been before. So, talk to me about that and what you think the market is looking for from the company.
Well, well, you know what's fun is many of the shareholders that are joining today, I mean, we've known each other for years. And you know, I walk into these rooms, it's not like we know each other's kids' names yet necessarily, but they're like, Sean, like incredible progress, you know, phenomenal Q1. You just like keep doing what you said you're going to do. And I think that that's fundamentally what the markets want and it's germane to our values, our motto, which is cultivate trust. And it's just a neat moment in time where the new shareholders that are coming in can help me and help us imagine a path to not just the millions of members but the many tens of millions which ultimately helps us achieve our end mission which is explicitly to bend the curve of disease.
And really quickly to final question for you. Looking at the trajectory for the company, looking at the focus on the GLP-1 you've set yourself up with other chronic diseases. Do you anticipate that the GLP-1 market is one that will just sort of fold into natural conversation or is it a standout for you?
You know, it's one where a couple years ago we started to feel just enormous asks from our customers to help them solve their worries about the positives of the med and some of the potential complexities. So our view is it's an exciting new chapter. Now that being said, we're really just getting going. I mean last year in March we were privileged to work with Express Scripts through EncircleRX for that GLP solution and now we work with two of the three major PBMs to support people alongside the GLP-1s with just excellent services and lifestyle change. So we'll be watching that.
Thank you so much for joining us. Sean Duffy, CEO of Om Health. Brad, back to you.
Angelie, thanks so much. Appreciate you for bringing us that interview. Now, time for some of today's trending tickers. We are watching apparel and space stocks. Let's make it make sense. Joining me now, we've got Market Domination co-host Julie Hyman. You going to wear your jeans to space?
Well, I'm trying. I'm just starting with, you know, summer Fridays. Jeans Fridays. Why not?
First up here, let's set the stage for Guess and G3 moving in opposite directions this morning after both reporting results for the latest quarter. Guess moving higher after revenue grew 9% with its acquisition of Rag & Bone contributing to its overall growth. Meanwhile, shares of G3 sliding after sales fell over 4% in the latest quarter and issuing weaker than expected guidance for the current period. And taking a look at shares of G3 apparel, they are down right now by about 14.8%.
Yeah, let's talk about Guess a little bit first because there's been an interesting story for this. It's actually down 50% or so over the past year. And yes, it did buy Rag & Bone, but there's also been talk of Guess being an acquisition target on the part of Authentic Brands. That's according to reporting from Bloomberg earlier this year. Also, Guess had got an offer to buy it from WHP Global. So, there's been a little bit of bidding for the company that has seen it bounce a little bit since April, but it's still down quite a bit. So the company looking of course at the tariff effects potentially and saying that they have taken some measures to manage tariff exposure and protect margins. They said this year's net impact will be less than $10 million based on current conditions and they've incorporated that into the outlook. The outlook for the year adjusted earnings per share of $1.32 to $1.64. So that is a lowering of the top end but still the estimates $1.46, so still leaves them some room for upside.
Yeah. Increases across some of their key markets here especially within Europe and the Americas for their revenue increases. 8% in Europe, 9% in the Americas in the retail segment there. And then wholesale revenues also increased 63% in US dollars there. So we'll continue to watch Guess as well going forward here.
Yeah. And then G3, I just wanted to mention what's going on there while we're talking denim. This company seeming to have a different reaction to tariffs. This has been so interesting, hasn't it? This earnings season when you get one company saying, for example, we're raising prices because of tariffs, another company saying, no, we're not raising prices. In other words, the messaging around how companies are dealing with tariffs has been pretty different. Even companies that are in the same business. So likewise here you've got G3 withdrawing its profit forecast for the full year because of uncertainty around tariffs here. The company says it's trying to offset costs here, but it sees additional expenses of $135 million on the unmitigated cost of tariffs. So again, it all depends on where people source from, what their customer base is like, and whether they can raise prices, etc.
Yeah. All right. I'm taking a look at some of the products on their site, at least as of right now, to see where I might need to update my closet. We'll see. I mean, these jeans are nice. I don't know. These are fine. They wash well as well. Space stocks, including Rocket Lab and Virgin Galactic, they're getting a boost after President Trump and Elon Musk traded threats, we can call them, I suppose, on social media to terminate contracts between the US government and SpaceX. Indeed, threats there. President Trump threatening to end billions in contracts for SpaceX while Musk contemplated decommissioning its Dragon spacecraft before walking back those comments. So maybe a macro trade as well. Musk always chickens out. I don't know. Too much there.
Yeah, it's not trading threats to like meet behind the gym after school. Although it felt a little bit like that, but no. Twitter fingers. Yes. Yeah. Twitter fingers. So, everybody's trying to figure out will this actually have an effect? Is it just a matter of threats? What is the ripple effect going to be on the space industry? I mean, these other companies right now don't necessarily seem to be acting as viable competitors to the likes of SpaceX, but will this give them some kind of leg up? Unclear. One thing I did want to mention that I noted as we see these stocks soaring today is there is very high short interest on both Virgin Galactic and Rocket Lab. Virgin's short interest according to Bloomberg data as a percentage of float is almost 30%, which is pretty darn high. Rocket Lab at 14% is also quite high. In other words, what you sometimes see is when a stock gains, you get a short squeeze where the shorts get squeezed out. They have to cover which can cause more of a gain in the stock.
Yeah. Government contracts is one of the key areas that Rocket Lab did talk about within its most recent Q1 earnings call where they were talking about some of the NRO, Office of Space Launch, other stakeholders across government and how key that is and some of those contracts to their business going forward from here. Julie, thanks for helping us break these down.
Yeah, thanks for having me.
Oh, of course. Anytime. You can scan the QR code below to track the best and worst performing stocks of the session with Yahoo Finance's trending tickers page. Coming up on the other side here, we've got much more on Wealth, including a deep dive into today's jobs report, plus tips for LGBTQ+ job seekers. Stay tuned. The US economy added 139,000 jobs in May, more than expected. Unemployment also remaining steady in the month at 4.2%. Joining me now in studio to break down the report, we've got Andrew McCaskill, good friend of the show, LinkedIn career expert. Andrew, good to have you back here. What do you make of this month's numbers?
Listen, I think what we're seeing is that businesses are hiring. They're still hiring. Unemployment is sitting pretty steadily at about 4.2%. Interestingly though, healthcare is showing big gains. And ironically, hospitality re-enters the chat. We haven't seen hospitality on the list of industries that are hiring most recently and I think that that's good news. That we'll see once hospitality is starting to come back, there's a bunch of other things that could be up for that as well.
Well, it's so interesting especially reading through the reports over the course of this week where wages stand within all of this. So what is the assessment on where wages are continuing to outpace inflation and what that means for the confidence in employees from what we're sensing at this juncture?
I think what it means for employees is that at every juncture, yes, hiring is happening, but you're going to have to negotiate for your life, right? That you're going to have to go into whatever interview process with as much information as possible, with as much leverage as possible, really being able to tell your story, making it so easy for people to hire you in a way that we've never seen before. So, it's one thing for us to talk about, hey, the job market is competitive. You've heard me say that many times. But what it means for job seekers right now is that they're going to have to be so strategic — strategic with geography, strategic with industry, strategic maybe even looking at parts of their skill set that they lean into less but are more valuable and more marketable to help them snag that job.
I also want to talk about a report that LinkedIn recently released, its belonging report and belonging blueprint, finding that only 35% of LGBTQ+ professionals feel comfortable being their full selves at work. What were some of the findings here that really stuck out to you?
A lot of the findings that stuck out were that LGBTQ+ professionals have a higher rate of turnover once they get into organizations largely because the organization was not what they thought it was. So you may see a job description that looks very inclusive. The company looks really inclusive on paper. What we did with this belonging blueprint was saying it's really important for you to know before you go. So here are the questions that you should ask. Here are the culture cues that will help you identify safer spaces. Many people have felt like they've had to code-switch. Going into a safer space using some of these tools and tactics on the front end, like using the values-based matching filter on LinkedIn or looking at company pages to see if they have employee resource groups. Also, phone a friend. Your network will tell you whether or not this is a safer place for someone from your community. Friends won't let their friends go and work at companies that are anti-LGBTQ+. The other piece of it is that the interview process and the offer letter process are also key opportunities for you to jump in and see what that process looks like.
