What Happened?
Shares of alternative investment manager Blackstone (NYSE: BX) jumped 3.1% in the afternoon session after the company announced several positive business developments, including the acquisition of San Francisco's Four Seasons Hotel and the launch of a new unit targeting retirement savings. The purchase of the 277-room hotel for around $130 million was seen as a sign of “renewed confidence in San Francisco's tourism landscape.” The deal came as projections showed revenue per available room was expected to grow, helped by high-profile future events.
After the initial pop the shares cooled down to $151.19, up 3% from previous close.
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What Is The Market Telling Us
Blackstone’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 12 days ago when the stock gained 3.1% on the news that investors grew more optimistic about a potential Federal Reserve interest rate cut in December. The positive sentiment was fueled by comments from New York Fed President John Williams, a voting member of the rate-setting Federal Open Market Committee, who stated the central bank could cut rates "in the near term" without jeopardizing its inflation targets. Following his remarks, market expectations for a rate cut in December shifted significantly. According to the CME FedWatch Tool, the probability of a December rate reduction surged from a 37% chance earlier in the day to 70%. While lower rates can compress bank profit margins, investors often view them as a catalyst for broader economic activity, potentially boosting loan demand and reducing the risk of defaults.
Blackstone is down 13% since the beginning of the year, and at $151.19 per share, it is trading 21.4% below its 52-week high of $192.41 from December 2024. Investors who bought $1,000 worth of Blackstone’s shares 5 years ago would now be looking at an investment worth $2,462.
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