September 5th Market Overview

September 5th Market Overview (no fluff)

Author

J.L. Bernstein
September 05, 2024

In partnership with

Happy Thursday everyone.

The market's giving us mixed signals today as we approach tomorrow's crucial jobs report. We're seeing growth fears simmer while tech shows some resilience. Tesla's making moves with its self-driving plans, and JetBlue's flying on improved guidance. Meanwhile, the labor market data is keeping everyone guessing.

I think it’s clear everyone's holding their breath for Friday's numbers.

Lets dig in…

Executive Summary

  • Stocks struggle as growth fear ahead of Friday’s crucial jobs report

  • Private payrolls show weakest growth since 2021, raising recession concerns

  • Tesla announces plans to launch full self-driving software in Europe and China

  • Market volatility remains heightened with significant movements expected following the upcoming jobs report

Market Overview

We’re seeing a mixed market today, with the Dow shedding 165 points (-0.4%) and the S&P 500 dipping 0.1%. The Nasdaq is showing some resilience, adding 0.4% after rising more than 1% earlier in the session. With increased scrutiny on upcoming labor market data, traders are bracing for potential volatility in the near term due to mixed economic indicators.

Key Market Drivers

  1. Labor Market Concerns: Fresh labor market data sent mixed signals about the health of the U.S. economy. Private payrolls data showed the weakest growth since 2021, while weekly unemployment claims declined.

  2. Pre-Jobs Report Jitters: Investors are anxiously awaiting Friday’s August nonfarm payrolls report, with economists forecasting an increase of 161,000 jobs.

  3. Growth Fears: We’re witnessing what Arun Sai, senior multi-asset strategist at Pictet Asset Management, calls “yet another mini growth scare.”

  4. Tech Sector Resilience: Technology stocks, especially Tesla, drew attention and momentum, aiding the Nasdaq’s ascent amid overall market slumps.

Stock Spotlight

  1. Tesla (TSLA): Shares popped 4% after announcing plans to launch its full self-driving software in Europe and China early next year.

  2. JetBlue Airways (JBLU): The stock surged more than 8% after raising its third-quarter revenue guidance, now projecting a lesser decline in revenue than previously expected.

  3. G-III Apparel Group (GIII): Shares soared 24% following better-than-expected second-quarter results, despite revenue slightly missing projections.

  4. Hewlett Packard Enterprise (HPE): The stock dropped 6% despite beating fiscal third-quarter expectations, as gross margins declined year-over-year.

  5. U.S. Steel (X): Shares rebounded nearly 3% after Wednesday’s 17% sell-off on news of potential government intervention in its sale to Nippon Steel.

Other Magnificent 7 Updates

  • Amazon (AMZN): Shares jumped 3%, leading gains in the Nasdaq-100.

  • Alphabet (GOOGL) and Apple (AAPL): Both stocks rose about 1% each.

Other Notable Company News

  • Verizon (VZ): Announced plans to acquire Frontier Communications in a $20 billion all-cash deal. Verizon shares advanced 1.2%, while Frontier tumbled 9.7%.

  • UnitedHealth (UNH) and Amgen (AMGN): Both stocks fell about 2%, weighing on the Dow.

Sector Watch

Sector

Symbol

% Change

Consumer Discretionary

XLY

+1.07%

Consumer Staples

XLP

-0.58%

Energy

XLE

-0.58%

Financials

XLF

-1.11%

Healthcare

XLV

-1.55%

Technology

XLK

-0.07%

Communication Services

XLC

+0.33%

Utilities

XLU

-0.32%

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Bond Market

Nothing going on in the bond market worth mentioning today.

Policy Watch

President Biden is preparing to block Nippon Steel Corp.'s $14.1 billion takeover of United States Steel Corp., according to sources familiar with the matter. This move aligns with Biden’s stance that U.S. Steel should remain American-owned. Additionally, investors are closely monitoring potential Federal Reserve moves as pressures regarding rate cuts remain in the spotlight, particularly with the upcoming labor report. Any deviations in job growth expectations could lead to significant market reactivity and influence future monetary policy decisions.

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

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Note: This newsletter is intended for informational purposes only.