Tuesday, September 3, 2024
It was a tough day for market indexes. With the employment report due later this week, market participants looked at the stock price level and decided it was too high. The Dow Jones Industrial Average fell -626 points, or -1.51%, and the Nasdaq fell -577 points, or -3.26%. The S&P 500 and small-cap Russell 2000 fell -2.12% and -3.09%, respectively.
It was the worst single trading day for tech stocks in two years, and the chip sector’s worst day since 2020. NVIDIA NVDA, the leader of the Magnificent 7 stocks, fell -9.5% today, cutting more than half of this month’s gains. Dow blue chip Boeing BA fell -7.3% today after being downgraded to Underperform by Wells Fargo WFC.
ISM manufacturing is lighter than expected
After the opening bell this morning, ISM Manufacturing reported a lackluster August. The headline +47.2% was 70 basis points (bps) lower than expected, but 40 bps higher than last month’s 46.8%. Less than 50% of this indicator indicates depletion.
The final S&P Manufacturing PMI for August released this morning came in at +47.9, slightly below expectations. Elsewhere, construction spending in July was in line with last month’s headline -0.3%, but was 20 basis points below expectations.
As a result, the economic decline in the manufacturing industry continues, and construction spending, which had been strong throughout the year, has slumped. In two weeks from tomorrow, interest rates will be significantly lowered, but will they be so significant that we will notice them?
Zscaler can win, but it will go down. Stock prices take a hit in late trading
Cloud security company Zscaler ZS reported its fourth quarter results after the close of trading today. The company beat both sales and bottom line earnings, with earnings of 88 cents per share on sales of $593 million, even though they beat expectations of 69 cents per share and $567.6 million. However, the lowered outlook for next fiscal year was disappointing. ZS stock fell -3.4% on a tough trading day, but was down a further -7.7% in late trading.
What’s next this week: Jobs, AVGO revenue
Obviously, the key report that all investors will be watching is Friday’s jobs report. We already know that the labor market is cooling. How bad these numbers are could determine whether we see a 50bps rate cut on September 18th or just a 25bps rate cut.
On Wednesday, JOLTS job/retirement information will be announced, and on Thursday, JOLTS job information will be announced, preceded by the release of private sector salary statistics from ADP ADP and weekly unemployment insurance claims, and the overall employment situation. It will add even more color to it. Additionally, semiconductor developer Broadcom AVGO will report its quarterly results after the market closes on Thursday. The stock price fell -6% today alone.
Have questions or comments about this article or the author? Click here>>
story continues
Want the latest recommendations from Zacks Investment Research? Today you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Boeing Company (BA): Free Stock Analysis Report
Wells Fargo & Company (WFC): Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Broadcom Inc. (AVGO): Free Stock Analysis Report
Zscaler, Inc. (ZS): Free Stock Analysis Report
Click here to read this article on Zacks.com.
Zacks Investment Research
