Now, cloud monitoring and analytics platform Datadog is set to become the latest member of this exclusive club by joining the S&P 500. The addition takes place before markets open on Wednesday, July 9. The news of the announcement has already sent stock in the company skyrocketing. It soared to an astounding 9.4% following the surprise report from S&P Global. The addition of Datadog to the powerful index is just one sign of its increasing importance in the technology world.
Wedbush analyst Dan Ives recently raised his price target for Datadog to $170, up from a prior $140. This move is in concert with the recent stock market increase. Ives reiterated that Datadog is in a good position to continue stealing share in the observability market. That’s because the enterprise demand for its services is growing rapidly.
“We believe that DDOG is well-positioned to continue gaining share within the observability space with elevated usage for its AI cohort across its enterprise customer base as the company’s new go-to-market motion leads to elevated deal flow for advanced capabilities to monitor cloud migration and digital transformation projects,” – Dan Ives.
The most recent monthly job report only deepens this mystery against the contrary backdrop of a still-strong overall economic context. The U.S. economy created 147,000 jobs in June, well beyond analyst estimates. The unemployment rate ticked down to 4.1%, better than the expected 4.3%. Yet, private payrolls fell by 33,000 on net over that same period according to ADP’s data.
Simultaneously, other market movements are noteworthy. Tripadvisor’s stock jumped 1.5%. This jump came on the heels of The Wall Street Journal’s reporting that activist investor Starboard Value had purchased a 9%-plus stake in the company. This news boosts a smart money bet on Tripadvisor and its longterm recovery potential despite the pandemic, inflation, recession, war, and other market headwinds.
To add to that, futures for the major indices showed a bullish sentiment early this week. Futures contracts tied to the S&P 500 rose by 0.3%, and Nasdaq-100 futures were up by 0.4%. At the same time, futures tied to the Dow Jones Industrial Average gained 104 points, or 0.2%.
Even with these developments some analysts are expressing worrisome omens at the increasing short interests in the market. S&P 500 short interest as a % of total float has spiked over 5.8%. This is up from around 5.4% at the beginning of the year. At the same time, Nasdaq-100 short interest has ballooned to near 6.1% of shares outstanding, from under 5.2% at the start of this year.
“Despite a 25% selloff earlier in the year followed by recovery, short interest in both the S&P 500 and Nasdaq has continued to rise steadily this year,” – S3 Partners researchers.
The approaching holiday will complicate trading behavior. U.S. markets will be closed this Friday for Independence Day. The trading session will be abbreviated on Thursday. The New York Stock Exchange and Nasdaq are set to follow suit, closing both at 1 p.m. ET.
Shares of Cadence Design Systems and Synopsys skyrocketed in the technology sector. That increase followed the U.S. government’s decision to ease restrictions on exporting chip-design software to China. This positive policy shift has important implications for U.S.-listed chip designers, as it would significantly improve their competitive standing in key global markets.
The big picture economy right now could be summed up in two words, conflicting indicators. Although key indices such as the Nairobi Securities Exchange have outperformed their global and regional counterparts, many indices have lagged behind global averages.
“In contrast, most global markets have posted gains of 15% to 20%. Among major indices, only a few have underperformed the S&P, placing it well below the global average,” – S3 Partners researchers.
Market participants have high expectations for Datadog in the wake of its addition to the S&P 500. Register to continue reading this article and more, register for free and unlock the world’s most trusted, unique, policy-focused research and data.