What Happened?
Shares of digital small business lender Live Oak Bancshares (NYSE: LOB) fell 3% in the afternoon session after a significant downward revision in U.S. jobs data fueled expectations of an imminent interest rate cut by the Federal Reserve.
The U.S. Bureau of Labor Statistics (BLS) issued its largest-ever correction, revealing the economy added 911,000 fewer jobs in the 12 months through March 2025 than previously reported. This stunning revision points to a much weaker labor market, intensifying pressure on the Federal Reserve to stimulate the economy.
JPMorgan Chase CEO Jamie Dimon warned that the U.S. economy is "weakening," though he stopped short of predicting a recession. "Whether it's on the way to recession or just weakening, I don't know," he said. Dimon's remarks are closely watched given his influence as head of one of the nation's largest banks.
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What Is The Market Telling Us
Live Oak Bancshares’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 3% on the news that the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
Live Oak Bancshares is down 4.4% since the beginning of the year, and at $36.86 per share, it is trading 26.6% below its 52-week high of $50.22 from October 2024. Investors who bought $1,000 worth of Live Oak Bancshares’s shares 5 years ago would now be looking at an investment worth $1,609.
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