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Friday, August 2

Some of the largest macro moves in the market today include: USD/CNH -0.8%. US 2Y Treasury Bond +0.4%. Nasdaq 100 Index (US) -2.2%. Some of the largest moves among US mega-cap stocks include: Amazon.com Inc (AMZN) -9.3%. NVIDIA Corp (NVDA) -6.3%. Broadcom Inc (AVGO) -4.3%. 

The U.S. labor market data released today showed weak results, with average hourly earnings increasing by 0.2% in July, below the forecasted 0.3%, and a rise in unemployment to 4.3%. Additionally, nonfarm payrolls added only 114K jobs compared to expectations of around 175K, indicating slower job growth.

Global equity markets are experiencing significant declines amid concerns over economic slowdown and disappointing corporate earnings reports from major tech companies like Amazon and Intel. The Nasdaq fell sharply by more than two percent while European indices such as Germany's DAX also saw substantial losses exceeding one percent.

In commodities trading, precious metals like silver and gold have seen gains due to increased demand for safe-haven assets amidst heightened market volatility; meanwhile oil prices continue their downward trend influenced by weak global manufacturing activity data pointing towards reduced future energy consumption.

iShares Russell 2000 ETF (IWM) [-3.2%]
The iShares Russell 2000 ETF declined by 3.6% in premarket trading, reflecting a broader trend of underperformance among small-cap stocks. This follows a daily return of 3.5% drop in the Russell 2000 Index, coinciding with disappointing economic data from the U.S. Non Farm Payrolls report for July, which showed only 114K jobs added, significantly below expectations. The unemployment rate also rose to 4.3%, further highlighting a weakening labor market. Among the ETF's holdings, notable declines included Chart Industries, which reported Q2 results that missed expectations and lowered its fiscal year guidance, and Carvana Co., which faced concerns due to significant insider selling. The overall sentiment was echoed in the S&P 500 Index's decline of 1.40%, suggesting a correlation with the struggles faced by small-cap stocks represented in the Russell 2000 Index.

iShares 20+ Year Treasury Bond ETF (TLT) [+1.8%]
The iShares 20+ Year Treasury Bond ETF increased following the release of weak July jobs data, which revealed a nonfarm payroll change of 114,000 compared to an expected 175,000, alongside an unemployment rate rise to 4.3%. This disappointing report contributed to a decline in Treasury yields. The US 30Y Treasury Bond also increased since Thursday, reflecting the weaker job growth and rising unemployment. Additionally, average hourly earnings year-over-year fell short of expectations at 3.6%, suggesting a negative trend in wage growth. The US 10Y Treasury Bond rose as well, indicating broader market movements that likely influenced TLT's recent performance. These developments have led to expectations of potential interest rate cuts by the Federal Reserve, further supporting bond prices.

AMZN |-8.2%|-143.9B
Amazon.com Inc. reported second-quarter net sales of $148 billion, reflecting a year-over-year increase but falling short of the consensus estimate. The earnings per share reached $1.26, surpassing expectations. However, the company's third-quarter revenue forecast of $154 billion to $158.5 billion missed analyst estimates, contributing to a significant drop in share price. The CFO attributed the weak guidance to external distractions, including the Paris Olympics and a recent assassination attempt on Donald Trump, which he claimed diverted consumer attention from online shopping. Following the earnings announcement, Amazon shares experienced a notable decline in after-hours trading, aligning with broader market trends and underperformance relative to sector peers.

INTC | -23.5% | -22.3B
Intel Corp reported a quarterly earnings per share of $0.02, significantly missing the consensus estimate of $0.10 and reflecting an 84.62% decrease year-over-year. Quarterly sales totaled $12.83 billion, slightly below the $12.94 billion estimate and down marginally from the previous year. In response to this disappointing performance, CEO Pat Gelsinger announced a $10 billion cost reduction plan, which includes a workforce reduction exceeding 15% and the suspension of dividends starting in Q4 2024. Guidance for Q3 indicates a projected loss of $0.03 per share, with revenues expected between $12.5 billion and $13.5 billion, notably below prior estimates. The stock has dropped significantly, moving lower with the broader market and underperforming its sector peers.

DASH |+11.2%|+5.5B
DoorDash Inc. reported second-quarter revenue of $2.63 billion, exceeding expectations of $2.54 billion and reflecting a year-over-year increase of 23%. The company experienced a loss of $0.38 per share, significantly missing the anticipated loss of $0.09. Total orders rose by 19%, reaching 635 million. Analysts responded positively, with price target increases from Goldman Sachs to $142, Needham to $145, Barclays to $120, and JMP Securities to $145. The company anticipates third-quarter adjusted EBITDA between $470 million and $540 million, surpassing consensus estimates. Management highlighted strong consumer demand and a commitment to expanding services and investing in product development, despite challenges in the broader economic landscape.

NVDA |-4.0% | -103.9B
NVIDIA Corp is experiencing a notable decline, aligning with the broader market and sector movements. The U.S. Department of Justice has launched an investigation into NVIDIA following allegations of potential market dominance abuse in AI chip sales. This inquiry compounds existing antitrust concerns regarding NVIDIA's acquisition of Israeli AI startup Run:ai, which is also under investigation. The deal, announced in late April, was reportedly valued at approximately $700 million. Additionally, recent U.S. Non Farm Payrolls data showed job gains below expectations, while Average Hourly Earnings year-over-year were lower than anticipated, further contributing to market volatility and uncertainty in the Information Technology sector.

SNAP |-18.4%|-3.1B
Snap Inc reported a second-quarter adjusted profit of $0.02 per share on revenue of $1.24 billion, falling short of analyst expectations of $1.25 billion. The company projected third-quarter revenue between $1.335 billion and $1.375 billion, slightly below the consensus estimate of $1.36 billion. Daily active users increased by 9% year-over-year to 432 million, while monthly active users reached 850 million. Following the earnings report, Snap's shares dropped significantly in after-hours trading, prompting multiple analysts to lower their price targets, with Goldman Sachs setting it at 12, JP Morgan at 11, and Susquehanna also at 12. Concurrently, the US Non-Farm Payrolls report revealed job growth below expectations and an increase in the unemployment rate to 4.3%, contributing to heightened volatility in Snap and Communication Services stocks.

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