Market Sinks on Weak Payrolls and Tech Earnings
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The U.S. stock market experienced a turbulent session, driven by weaker-than-expected payroll data and disappointing earnings from major tech companies like $Apple (AAPL.US)$ and $Amazon (AMZN.US)$. Here’s a detailed breakdown of the recent developments and their implications.
Payroll Data and Market Impact
Payroll Data and Market Impact
The July jobs report showed the creation of only 114,000 jobs, significantly lower than the expected 177,000, and the lowest figure since January 2021. This weak performance raised concerns about a potential economic recession. The unemployment rate rose to 4.3% from 4.1% in June, while month-on-month average hourly wage growth slowed to 0.2% from 0.3%. These figures have fueled speculation about the Federal Reserve potentially cutting interest rates by 50 basis points in September, with some analysts even suggesting an intra-meeting move.
Tech Sector’s Mixed Earnings
1. $Apple (AAPL.US)$:
• Despite reporting stronger-than-expected revenue and profit for the June quarter, Apple’s stock did not spark significant market enthusiasm. The company’s iPhone sales performed slightly better than anticipated, but overall device sales fell amid growing competition, particularly in China. Apple’s stock managed a modest rise of 2%.
2. $Amazon (AMZN.US)$:
• Amazon’s stock fell by 9% following a softer-than-expected revenue outlook and warnings of slowing online sales. Although Amazon Web Services (AWS) results were better than feared, the company’s North American margins and raised capital expenditure outlook disappointed investors.
3. $Intel (INTC.US)$:
• Intel experienced a significant slump, with its stock dropping nearly 27%. The company missed earnings estimates for the June quarter, suspended its dividend, and announced plans to cut 15% of its workforce as part of a turnaround strategy. UBS cut its price target on Intel to $32 from $37 per share, highlighting continued challenges in the company’s transformation efforts.
Broader Market Performance
Tech Sector’s Mixed Earnings
1. $Apple (AAPL.US)$:
• Despite reporting stronger-than-expected revenue and profit for the June quarter, Apple’s stock did not spark significant market enthusiasm. The company’s iPhone sales performed slightly better than anticipated, but overall device sales fell amid growing competition, particularly in China. Apple’s stock managed a modest rise of 2%.
2. $Amazon (AMZN.US)$:
• Amazon’s stock fell by 9% following a softer-than-expected revenue outlook and warnings of slowing online sales. Although Amazon Web Services (AWS) results were better than feared, the company’s North American margins and raised capital expenditure outlook disappointed investors.
3. $Intel (INTC.US)$:
• Intel experienced a significant slump, with its stock dropping nearly 27%. The company missed earnings estimates for the June quarter, suspended its dividend, and announced plans to cut 15% of its workforce as part of a turnaround strategy. UBS cut its price target on Intel to $32 from $37 per share, highlighting continued challenges in the company’s transformation efforts.
Broader Market Performance
The $Dow Jones Industrial Average (.DJI.US)$ dropped 1.51%, while the $S&P 500 Index (.SPX.US)$ and $Nasdaq Composite Index (.IXIC.US)$ fell 1.84% and 2.45%, respectively. The market’s volatility index, $CBOE Volatility S&P 500 Index (.VIX.US)$, surged to a 15-month high, indicating heightened investor anxiety. $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ also fell, reflecting increased concerns about the economic outlook.
Key Gainers and Losers
• Gainers:
• $UnitedHealth (UNH.US)$ (+2.98%)
• $McDonald's (MCD.US)$ (+2.95%)
• $Procter & Gamble (PG.US)$ (+2.65%)
• $Clorox (CLX.US)$ (+7.42%)
• $MarketAxess (MKTX.US)$ (+6.06%)
• $Cboe Global Markets (CBOE.US)$ (+4.33%)
• Losers:
• $Intel (INTC.US)$ (-26.06%)
• $Amazon (AMZN.US)$ (-8.84%)
• $AMEX (AMEX.US)$ (-6.71%)
• $Microchip Technology (MCHP.US)$ (-10.60%)
• $Prudential Financial (PRU.US)$ (-9.98%)
Commodities
• Gainers:
• $UnitedHealth (UNH.US)$ (+2.98%)
• $McDonald's (MCD.US)$ (+2.95%)
• $Procter & Gamble (PG.US)$ (+2.65%)
• $Clorox (CLX.US)$ (+7.42%)
• $MarketAxess (MKTX.US)$ (+6.06%)
• $Cboe Global Markets (CBOE.US)$ (+4.33%)
• Losers:
• $Intel (INTC.US)$ (-26.06%)
• $Amazon (AMZN.US)$ (-8.84%)
• $AMEX (AMEX.US)$ (-6.71%)
• $Microchip Technology (MCHP.US)$ (-10.60%)
• $Prudential Financial (PRU.US)$ (-9.98%)
Commodities
• $Gold Futures(DEC4) (GCmain.US)$: Slight increase of 0.04% to $2,481.85 per ounce.
• $Crude Oil Futures(JAN5) (CLmain.US)$: Decline of 2.87% to $74.12 per barrel, with Brent oil falling 2.67% to $77.40 per barrel.
Navigating Market Turbulence
The latest payroll data and mixed earnings from major tech companies have intensified market volatility, prompting concerns about the economic outlook and potential Fed rate cuts. Investors should remain vigilant and prepared for further fluctuations as the market digests these developments.
• $Crude Oil Futures(JAN5) (CLmain.US)$: Decline of 2.87% to $74.12 per barrel, with Brent oil falling 2.67% to $77.40 per barrel.
Navigating Market Turbulence
The latest payroll data and mixed earnings from major tech companies have intensified market volatility, prompting concerns about the economic outlook and potential Fed rate cuts. Investors should remain vigilant and prepared for further fluctuations as the market digests these developments.
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