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September 4th Market Overview

September 4th Market Overview

September 4th Market Overview (no fluff)

J.L. Bernstein
September 04, 2024

Happy Wednesday everyone.

The market's giving us whiplash this week. The market is trying to find footing after yesterday's tech bloodbath. Nvidia can't catch a break, now with the DOJ breathing down its neck. Meanwhile, Dollar Tree's having a day it'd rather forget, down a brutal 20% off ER.

The economic tea leaves are giving us mixed signals - job openings are cooling, but the yield curve's straightening out.I think everyone's holding their breath for Friday's jobs report.

Lets dig in…

Executive Summary

Wall Street wobbles as it awaits Friday’s crucial employment data, with major indexes posting small losses
Nvidia faces new challenges with DOJ subpoenas, contributing to ongoing tech sector weakness
Dollar Tree heads for its worst day since 2001, plummeting 20% on weak guidance and disappointing results
U.S. Treasury yield curve normalization eases some recession fears, but economic growth concerns persist

Market Overview

Markets opened decently into green today and then fell into cautious trading territory quickly, with the S&P 500 and Nasdaq both down about 0.4%, while the Dow has slipped 0.2%. This hesitancy follows Tuesday’s sharp decline and reflects investor anxiety ahead of Friday’s employment report.

Key Market Drivers

Fed’s Beige Book indicates slowing economic growth and a cooling job market
Unexpected decline in job openings to lowest level since January 2021
Tech sector weakness, particularly in semiconductors
Treasury yield curve normalization, offering some reassurance against recession signals

Stock Spotlight

Nvidia (NVDA): Down 3% after receiving DOJ subpoenas related to an antitrust investigation, compounding Tuesday’s 9% drop
Dollar Tree (DLTR): Plummeted 20%, heading for its worst day since 2001 after slashing full-year outlook and disappointing Q2 results
Zscaler (ZS): Tumbled 19% due to weak fiscal Q1 earnings guidance, potentially its worst session since 2019
GitLab (GTLB): Surged 17% on strong Q3 earnings outlook
Lockheed Martin (LMT): Reached all-time high as demand for low-volatility defense stocks grows

Other Magnificent 7 Updates

Apple (AAPL) and Tesla (TSLA): Both dipped slightly in premarket trading
Meta Platforms (META): Edged higher in early trading

Other Notable Company News

U.S. Steel (X): Shares plummeted 18% on reports of potential White House block of Nippon Steel takeover
RTX Corp (RTX): Defense stock reached all-time high alongside Lockheed Martin

Sector Watch

Sector	Symbol	% Change
Consumer Discretionary	XLY	-0.53%
Consumer Staples	XLP	+0.11%
Energy	XLE	-1.26%
Financials	XLF	-0.25%
Healthcare	XLV	-0.43%
Technology	XLK	-0.68%
Communication Services	XLC	-0.26%
Utilities	XLU	+0.77%

A friend asked me to add a sector heat map, I thought it was a great idea! Let me know what you think?

sector heat map

Bond Market

We’re seeing a slight uptick in Treasury yields today. The yield curve has returned to a normal state, with the 10-year yield slightly higher than the 2-year yield. This development has eased some recession concerns, but the market is attentive to upcoming economic indicators.

Policy Watch

Fed funds futures pricing now indicates a 50-50 chance of a 50 basis point rate cut at the Fed’s September meeting.

This shift follows the unexpected decline in job openings and the latest Beige Book report outlining soft economic growth.

Atlanta Fed President Raphael Bostic suggested the Fed shouldn’t wait for inflation to hit 2% before easing. We anticipate increased market volatility as we approach the next Fed meeting.

P.S. Any “clicks” to our sponsor allows me to drink good coffee in the morning. Please consider clicking through and checking out sponsors even if you don’t think you want to buy or subscribe from them :-)

- JB

September 4th Market Overview