Shares of Canopy Growth Corp.
CGC,
shot up 21.7% toward a near four-month high in very active afternoon trading, putting them on track for the fifth double-digit percentage gain in seven sessions. The stock has rocketed 130% over the past seven session. Trading volume was 107.7 million shares as of Friday afternoon, to mark the fourth 100+-million-share volume day in the past six sessions, while the average volume over the past 30 days was about 36.3 million shares. The stock’s surge comes as Senate Banking Committee chair Sherrod Brown said Wednesday that there is “an agreement imminent” on the SAFE Banking Act, according to a Politico report, which could make it easier for the financial industry to work with cannabis companies. Among other cannabis stocks, shares of Tilray Brands Inc.
TLRY,
gained 2.4%, of Cronos Group Inc. climbed 6.0% and of Aurora Cannabis Inc.
ACB,
jumped 12.5%. The AdvisorShares Pure US Cannabis ETF
MSOS,
rose 7.5% on volume of 13.9 million shares, compared with the full-day average of about 5.6 million shares, while the S&P 500
SPX,
slipped 0.1%. The cannabis ETF has soared 77% over the past seven sessions.
Tag: AdvisorShares Pure US Cannabis ETF
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Canopy Growth stock soars on heavy volume again, amid cannabis investor optimism over possible favorable legislation
+22.61% +2.03% +14.75% +3.88% +0.14% -
Poseidon Dynamic Cannabis ETF to close as investors lose interest in marijuana industry
A proposed constitutional amendment for recreational marijuana is under review by the Florida Supreme Court.
Brad Horrigan | Tribune News Service | Getty Images
A leading exchange-traded fund in the cannabis space will close up shop as investor interest in the legally restricted industry wanes.
AdvisorShares, the largest cannabis fund manager, said its Poseidon Dynamic Cannabis ETF will see its final day of trading Aug. 25. The fund will liquidate assets and pay shareholders Sept. 1, according to a notice on the fund’s website.
The fund, led by sibling founders Emily & Morgan Paxhia, launched on the New York Stock Exchange in November 2021 during a pandemic-era cannabis sales boom.
The closure comes as investors lose interest in the quasi-legal cannabis industry that has struggled to scale. Wholesale prices have declined, and Congress has not reformed federal laws that have hampered the sector’s growth.
In an emailed statement to CNBC, co-founder Morgan Paxhia said the fund was not “immune to the broader macro-economic environment and, more specifically, the dramatic shift in investor sentiment that has impacted the cannabis industry.”
While nearly half of U.S. states have legalized the recreational use of cannabis by adults, it remains illegal at the federal level. Its classification as a Schedule I substance along with heroin and LSD has barred the sector from accessing most banking services and from being traded across state lines, causing a glut of cannabis in many states and a drop in prices.
Sliding equity values have made investors turn away from the industry and capital has dried up.
Poseidon Investment Management, which started in 2013 as one of the first cannabis-focused hedge funds in the U.S., has seen its ETF lose roughly 74% in value since it was founded, versus a 1.7% decline in the S&P 500.
Its value has fallen 65% in the last year and traded under $1 Tuesday. Meanwhile, Pure US Cannabis ETF, another fund in the industry by AdvisorShares, plummeted about 60% during the same period.
Poseidon is the latest casualty in an industry strained by market forces and economic policy.
Last month, a $2 billion merger between cannabis multistate operators Cresco Labs and Columbia Care went up in smoke more than a year after the companies announced the acquisition. Mastercard, in a move that further alienates the cannabis industry from big banking, announced last month it will stop allowing cannabis transactions on its debit cards to be in compliance with federal law.
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Dow books 630-point drop after strong jobs data rattles investors, but stocks cement weekly gains
U.S. stocks finished sharply lower Friday, but still booked their best weekly gains in a month, after September jobs data showed an unexpected fall in the unemployment rate that’s anticipated to reinforce the Federal Reserve’s resolve to keep tightening monetary policy.
Investors also weighed a profit warning at a leading microchip maker ahead of next week’s increase in quarterly earnings results.
What happened
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The Dow Jones Industrial Average
DJIA,
-2.11%
fell 630.15 points, or 2.1%, ending at 29,296.79, but off the session low of 29,142.66. -
The S&P 500
SPX,
-2.80%
dropped 104.86 points, or 2.8%, closing at 3,639.66. -
The Nasdaq Composite
COMP,
-3.80%
shed 420.91 points, or 3.8%, to finish at 10,652.40.
Stocks posted back-to-back losses, trimming weekly gains, but recorded their best weekly gains since Sept. 9, according to Dow Jones Market Data.
Read: Will the stock market be open on Columbus Day?
What drove markets
Stocks recorded sharp losses Friday after the Labor Department said the U.S. economy added 263,000 jobs in September, while the unemployment rate declined to 3.5% from an August reading of 3.7%. Average hourly earnings rose 0.3%.
Still, a powerful rally earlier in the week boosted all three major stock indexes to weekly gains, a departure from three straight weekly losses, according to Dow Jones Market Data.
“It’s manic. We are all on edge,” said Kent Engelke, chief economic strategist at Capitol Securities Management, of the sharp market swings.
“Any piece of good news is a cause for an explosive rally,” Engelke said by phone. On the flip side, he pegged technology-based trading “in an illiquid and emotional market” as exacerbating Friday’s selloff.
“It’s a reflection that people have re-entered the mind-set that the Fed is going to be raising rates at a rapid clip, probably for longer than what they might have suspected at the start of the week,” said Robert Pavlik, a senior portfolio manager at Dakota Wealth Management, by phone.
Pavlik expects the Fed to keep tightening financial conditions to try to head off inflation. “But once we turn the corner, and the economy slows down, the Fed probably will be more aggressive in cutting rates on the way down.”
In addition, the Fed has been “draining liquidity from the system at a remarkable pace,” wrote Rick Rieder, BlackRock’s chief investment officer of global fixed income, in a Friday client note, while pointing to an astounding $1.3 trillion decline in the central bank’s balance sheet since the December 2021 peak.
Pavlik at Dakota Wealth said he anticipates the Fed will start slowing interest rate hikes by mid-next year, which likely means continued pressure for the stock market, particularly with a backdrop of big oil-price
CL00,
+5.37%
gains this week after global crude producers voted to cut monthly production and with the U.S. dollar’s
DXY,
+0.44%
surge this year against a basket of rival currencies.U.S. crude oil prices climbed for a fifth day in a row on Friday to settle at $92.64 a barrel, while booking at 16.5% weekly gain.
New York Fed President John Williams said Friday that benchmark interest rates likely need to hit 4.5% over time. The Fed’s policy rate now sits in a 3%-3.25% range, up from a zero-0.25% range a year ago.
The benchmark 10-year Treasury rate
TMUBMUSD10Y,
3.889%
climbed to 3.883% Friday, as the key metric used to gauge the affordability of credit for businesses, household and the economy posted 10 straight weeks of gains, according to Dow Jones Market Data.Read: Bond markets facing historic losses grow anxious of Fed that ‘isn’t blinking yet’
Investors continued to hope for relief on the inflation front and will be monitoring next week’s release of the September consumer-price index, as well as corporate earnings season as it picks up.
Companies in focus
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Twitter Inc.
TWTR,
-0.43%
shares fell 0.4% Friday after a judge delayed a looming trial between the company and Elon Musk to allow the Tesla Inc.
TSLA,
-6.32%
CEO more time to close his $44 billion acquisition of the social media platform. - Besides the jobs report, investors weighed a profit warning from microchip maker Advanced Micro Devices Inc. AMD, which said the PC market weakened significantly during the quarter. AMD shares fell 13.9%, and rivals including Nvidia Corp. NVDA and Intel Corp. INTC also closed lower.
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U.S. cannabis stocks were choppy Friday, with the AdvisorShares Pure US Cannabis ETF
MSOS,
-2.80%
ending lower, following steep gains earlier in the week after President Joe Biden said the U.S. would consider de-scheduling cannabis from its current position as a Schedule 1 narcotic under federal law.
—Steven Goldstein contributed reporting to this article
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The Dow Jones Industrial Average
