Today's Market: Is Yahoo Fumbling The Ball?

Includes: DIS, FB, GOOG, YHOO
by: Matthew Smith

Today is one of those days when good news is bad news and it will be interesting to see how the market reacts moving forward. The 10-year interest rates ticked higher on the payroll figures, but the question is how much of this is seasonal and can it continue?

At the end of the day one has to ask themselves if they would rather have an economy supported by the Fed at every turn or if they would like to have an economy where it is self sustaining and able to grow strongly on its own. Our preference would be for self sustaining markets, and if these numbers hold up in the weeks and months ahead then the rest of the market participants will be coming aboard. The fear here is that the Fed is forced to leave too early and that Washington drops the ball again once this happens.

Chart of the Day:

The 10-year Treasury is trading sharply higher this morning as it appears that the Federal Reserve will be forced to tighten their easy money policy with the payroll numbers we got this morning. Long-term it is great news, short-term the market will be wary of this.

(Click to enlarge)

Source: Yahoo Finance

We have economic news today and it is as follows:

  • Nonfarm Payrolls (8:30 a.m. EST): Est: 100k Actual: 204k
  • Nonfarm Private Payrolls (8:30 a.m. EST): Est: 110k Actual: 212k
  • Unemployment Rate (8:30 a.m. EST): Est: 7.3% Actual: 7.3%
  • Hourly Earnings (8:30 a.m. EST): Est: 0.2% Actual: 0.1%
  • Avg Workweek (8:30 a.m. EST): Est: 34.4 Actual: 34.4
  • Personal Income (8:30 a.m. EST): Est: 0.2% Actual: 0.5%
  • Personal Spending (8:30 a.m. EST): Est: 0.2% Actual: 0.2%
  • PCE Prices - Core (8:30 a.m. EST): Est: 0.1% Actual: 0.1%
  • Michigan Sentiment (9:55 a.m. EST): Est: 75.3 Actual: 72.0

Asian markets finished lower today:

  • All Ordinaries -- down 0.39%
  • Shanghai Composite -- down 1.09%
  • Nikkei 225 -- down 1.00%
  • NZSE 50 -- up 0.58%
  • Seoul Composite -- down 0.96%

In Europe, markets are trading lower this morning:

  • CAC 40 -- down 1.38%
  • DAX -- down 0.74%
  • FTSE 100 -- down 0.52%
  • OSE -- down 0.47%

Is Yahoo Messing Up A Good Thing?

Today Yahoo (NASDAQ:YHOO) unveiled their new finance page which has been updated and resembles more of the tech 2.0 website that are out there. Those who follow Yahoo know that the company lags in search advertising but has some of the best content sites out there and dominates when it comes to those who use its home page, sports and finance sites. These three sites have also enabled Yahoo to continue to launch new offerings which piggyback off of their success. With so much hinging on these sites though we have been disappointed with the updated sites that the company has released. We used to be loyal users of Yahoo Sports and would constantly check the site for new stories throughout the day, however with the new site pages load slow, ads display wrong and one can tell that code is not always working because of pictures overlapping text - all issues that have essentially chased us away. Worse still, the interaction that defined Yahoo for so long has been relegated and they essentially try to hide the comments sections these days. We have transitioned to ESPN's app which delivers us stories and tons of stats, basically everything Yahoo used to do, but via our phone. Disney (NYSE:DIS) has really understood what consumers want and has developed apps which are quickly appealing to us and many others that we talk to. Their move to enable consumers to watch their content online is making them a much more formidable foe to Yahoo down the road, and if they take the crown away from Yahoo in important online segments such as Sports then Mrs. Mayer has some serious issues on her hands down the road.

We have long been bulls of Yahoo, however the story is now more about their Alibaba stake and less about their content monetization. When investors shift their focus back to the underlying business, there could be some shock as we think Yahoo is chasing eyeballs away with their site overhauls.

(Click to enlarge)

Source: Yahoo Finance

As it pertains to Yahoo Finance, the message boards are awful and do not let posters upload links to company presentations or articles for others to read. But our big beef this morning is that Yahoo has jumbled everything together and made navigating the page quite difficult. The earlier refresh of the product organized the page in a way that made sense and was easy for the long-time user to adapt to. This new layout might very well put Yahoo's standing as the leading, and go-to site for many market participants, in jeopardy.

Google's (NASDAQ:GOOG) Google Finance might be a beneficiary of this as they have an easily navigable site and decent charts and so too could Seeking Alpha. Other companies like Facebook (NASDAQ:FB) have had success totally redesigning their site over the years and not losing eyeballs because they had a captured audience and an audience that was arguably the most tech savvy demographic, which enabled them to quickly adapt to these big overhaul updates.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.