Get the DealBook newsletter to make sense of major business and policy headlines — and the power-brokers who shape them.
__________
A mania appears to have gripped cannabis stocks. Tilray, a Canadian maker of cannabis products, surged as much as 94 percent Wednesday, gave it all back and then rallied again in the final 18 minutes to close up nearly 40 percent. Along the way, trading in the stock was halted four times. The company went public in July at $17 a share and has soared nearly 1,160 percent to close Wednesday at $214.06. Tilray is now valued at $20 billion, making it roughly the same size as American Airlines, CBS and Hershey.
The Amazon effect strikes specialty retailers. Amazon, according to CNBC, is testing out a new service, called Scout, that is designed to make it easier for consumers to browse by asking them to give a thumbs up or a thumbs down to products and then showing other products based on their choices. News of the service hit the stocks of specialty retailers. Shares of Stitch Fix were down 6 percent on Wednesday, while Wayfair and Etsy were off nearly 3 percent.
Companies have been stockpiling ahead of the latest round of tariffs on Chinese goods. Imports of more than 80 percent of the product lines covered by the tariffs increased from May through July, and imports of over a quarter of those product lines jumped by more than 25 percent, according to S7P Global’s Panjiva, a supply chain data firm.
Forget the “Fed Put.” The market now has a “Trump Tariff Put.” One of the most persistent questions over the past several months: Why haven’t stocks on Wall Street sold off more on the escalating trade war between the United States and China? Nicholas Colas, a co-founder of DataTrek Research, offered an explanation. “President Trump measures his administration’s success in part by how the S. & P. 500 and Dow perform,” Mr. Colas wrote. “If market fears of a real and lasting trade war were to sharply hit United States stocks, he would moderate his position quickly.” That sounds an awful lot like the so-called Fed Put, which is essentially the idea that the Federal Reserve will come to the rescue of investors by lowering rates whenever stocks tumble.
Housing starts in the United States rose in August. The United States housing market could use some upbeat news after months of weakness. The headline number from the Commerce Department’s report on housing starts on Wednesday looked like it. But a deeper look suggests that the 9.2 percent jump in housing starts last month is likely not sustainable. The increase was driven by a 29.3 percent rise in multifamily buildings, a segment that tends to be volatile. Building permits, a good gauge of future activity, fell to their lowest level in more than a year. Thursday will bring further clarity on the health of housing. The National Association of Realtors will release its report on sales of existing homes, which account for about 90 percent of home sales in the United States. Economists expect sales to tick up after four months of declines.
