September 3rd Market Overview

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Happy Tuesday, everyone.

September's off to a rough start. We're seeing a tech-led selloff, with the Nasdaq down 3.1% - its worst day since early August.

The ISM manufacturing index hit 47.2%, missing expectations and fueling recession concerns. Nvidia's 8% drop is spearheading the semiconductor slump.

Despite August's gains, classic September headwinds are at play.

Lets dig in…

Executive Summary

• Major U.S. stock indices tumble, with the Dow dropping over 600 points and the tech-heavy Nasdaq losing more than 3%.

• Economic data, particularly the ISM manufacturing index, fell short of expectations, intensifying concerns about U.S. economic growth.

• Tech sector hit hard, with Nvidia and other semiconductor stocks leading the decline.

• Historical trends suggest continued volatility, as September is often challenging for markets.

Market Overview

As of mid-afternoon trading, we’re seeing a sharp downturn across all major indices. The Dow Jones Industrial Average has dropped by 611 points (-1.5%), the S&P 500 is down about 2%, and the Nasdaq Composite has plummeted by 3.1%, on track for its worst day since early August.

Key Market Drivers

1. Economic Concerns: The ISM manufacturing index reported at 47.2%, below expectations and indicating contraction, reigniting recession fears.

2. Tech Sector Weakness: Semiconductor stocks are leading the decline, with the VanEck Semiconductor ETF (SMH) down over 6%.

3. Seasonal Pressure: Investors are reacting to historical September weakness, typically a challenging month for stocks.

4. Oil Price Decline: U.S. crude has erased all gains for 2023, while Brent hit its lowest level since December 2022.

Stock Spotlight

1. Nvidia (NVDA): Down over 8%, leading the semiconductor selloff and broader tech decline.

2. Boeing (BA): Shares dropped nearly 8% following a Wells Fargo downgrade, heading for its worst day in almost two years.

3. Cleanspark (CLSK): Plunged over 13% after releasing its August mining update showing a decrease in bitcoin production.

4. Vaxcyte (PCVX): Surged approximately 36% after reporting positive results from a Phase 1/2 study for its pneumococcal vaccine candidate.

5. Unity Software (U): Jumped about 6% following a Morgan Stanley upgrade to overweight, highlighting its position as a leading game engine.

Other Magnificent 7 Updates

While specific updates for other Magnificent 7 stocks weren’t provided, we’re seeing broad weakness in the tech sector, which likely impacts these stocks as well. Tracking their movements remains crucial in this turbulent market.

Other Notable Company News

• Warren Buffett’s Berkshire Hathaway: Actively selling off shares in Bank of America, liquidating approximately $6 billion worth in recent weeks.

• Piper Sandler: Expresses optimism for September despite typical seasonal weakness, highlighting potential for small and mid-cap stock participation.

Sector Watch

Bond Market

Increased demand for U.S. Treasuries as investors seek safer havens amidst market volatility.

Policy Watch

All eyes are on the upcoming August jobs report scheduled for release this Friday. The market will likely react to these economic indicators as they develop, potentially influencing the Feds decisions. Additionally, everyone should be mindful of potential market unrest leading into the upcoming presidential election year.

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- JB

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Note: This newsletter is intended for informational purposes only.