Why Shopify Stock Is Rising Today
Investors may be responding to the fact that the E.U. said it won't increase tariffs on the U.S. just yet.
But slowing job growth and uncertainty around tariffs could eventually weigh on the economy.
Shopify investors should keep a close watch on the company's upcoming quarterly results.
10 stocks we like better than Shopify ›
Shares of the e-commerce platform company Shopify (NASDAQ: SHOP) were rebounding today after stumbling on Friday after a weaker-than-expected jobs report. Investors regained some of their optimism for the company today, as the European Union says it's delaying some retaliatory tariffs on the U.S. for six months.
Shopify investors are closely watching for any positive economic news as they prepare for the company's Q2 earnings report due out on Wednesday. Shopify stock was up by more than 5% this morning and had gained 4.8% as of 11:29 a.m. ET.
Some positive news ahead of Shopify's upcoming earnings report
Profit growth has been slowing for Shopify, and investors will get more details on which direction it's currently headed when the company reports second-quarter results on Wednesday. In the meantime, investors were responding positively to the E.U.'s announcement that it will hold off on any retaliatory tariffs against the U.S., as it tries to strike a trade deal.
Investors were spooked on Friday by a weak jobs report for June and significantly revised jobs numbers for May, which caused a sell-off among many stocks on Friday. So any news that the U.S. isn't entering a new stage of a trade war with the E.U. caused investors to respond positively.
Shopify's growth is dependent on how well companies are growing in the U.S. and how many new businesses are started. So any slowdown in the economy will weigh down the company's sales and earnings. The latest job data wasn't a good sign, but with today's gains, it appears investors aren't yet sold on the idea that the U.S. economy is slowing down.
Shopify investors will know more very soon
Wednesday's Q2 report will prove whether investors' optimism is misplaced or not. It's certainly not time to panic about the economy, but there are significant uncertainties right now as hiring slows down and the dust settles on new tariffs. It could take months for both to work their way through the economy, which means the next few quarters will be especially important to watch for Shopify investors.
Should you invest $1,000 in Shopify right now?
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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.
Why Shopify Stock Is Rising Today was originally published by The Motley Fool
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