Daily U.S. Stock News – September 5, 2024
Apple iPhone 16 may not support WeChat? Job openings in the U.S. decrease monthly
Today, the U.S. Bureau of Labor Statistics released the JOLTS job openings data, showing that the number of job openings in late July was 7.67 million, down from June’s figures and lower than the expected 8.7 million. Job openings in the U.S. have been steadily decreasing every month, nearing pre-pandemic normal levels. Layoffs have increased to 1.76 million, the highest since March last year, with the leisure and hospitality sectors seeing the most layoffs.
U.S. factory orders in July rose by 5% month-on-month, the largest increase since July 2020, exceeding the expected 4.7% and rebounding sharply from the previous negative 3.3%, indicating that businesses are still investing.
The reduction in job openings suggests that the labor market is less tight, which logically helps with interest rate cuts, a positive sign for the stock market. However, if unemployment rises too quickly, it could trigger economic panic and negatively affect the market.
Other countries have already started their interest rate cut cycles. Today, Canada initiated its third rate cut and is expected to continue, as Canada's unemployment rate is higher than that of the U.S. and inflation is lower than in the U.S. This indicates that the Canadian central bank is more concerned about unemployment. Like the U.S., Canada aims to maintain a 2% inflation rate, demonstrating that Canada is more worried about economic growth than inflation—a direction the U.S. is also beginning to shift towards.
Investors are now awaiting tomorrow's ADP (small business) employment data before the market opens, as well as Broadcom's earnings report after the close, to observe their effects on the market. If tomorrow's ADP data improves, it could rule out the possibility of a recession.
However, the benefits of a rate cut have already been anticipated, and it's unclear whether the actual event will have the opposite effect. In the short term, the good news may be priced in, but in the medium to long term, it will still be positive for the stock market, especially for small and medium-sized enterprises as they access lower-cost financing and banks face reduced risks from high interest rates, releasing financial pressure.
U.S. energy and industrial stocks performed poorly, with energy stocks falling for six consecutive weeks and industrial stocks experiencing outflows in seven of the past eight weeks. The communication services sector was the standout performer.
Key Highlights:
$AAPL (Apple) iPhone 16 may not support WeChat – Apple mentioned they are in active talks with Tencent, but given the massive user base of WeChat, Apple is unlikely to drop the app.
$GOOG (Alphabet) faces antitrust trial next week – Google controls 91% of the ad server market and 85% of the ad network market, potentially violating antitrust laws.
$ZS (Zscaler Inc) stock plummets by over 18% – The cybersecurity software company’s guidance failed to meet expectations, despite FY2024 Q4 revenue of $593 million (+30%), which exceeded the forecast of $568 million.
Intel’s most advanced 18A chip manufacturing process failed Broadcom’s test, dealing a blow to Intel’s turnaround plan. Broadcom received silicon wafers from Intel, but after analysis by Broadcom engineers and executives, they found that Intel’s process is not yet ready for large-scale production.
$DLTR (Dollar Tree Inc) Dollar Tree, the discount retail giant, sees a more challenging macroeconomic environment – Competition is intensifying, leading to a downgrade in its full-year performance forecast, causing the stock to plummet by more than 22%. Meanwhile, Walmart is performing very well, and TEMU is also putting pressure on dollar stores.
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