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Friday, September 6

Some of the largest macro moves in the market today include: US 2Y Treasury Bond +0.1%. Some of the largest moves among US mega-cap stocks include: Broadcom Inc (AVGO) -6.1%. 

The US labor market data released today showed mixed results. Average hourly earnings for all employees on private nonfarm payrolls increased by 0.4% in August, significantly above forecasts of a 0.3% rise, while the unemployment rate edged down to 4.2%. However, job growth was below expectations with only 142K jobs added compared to the forecasted increase of 160K.

In Europe, German industrial production fell sharply by 2.4% month-over-month in July against an expected decline of just 0.3%, marking its third contraction this year and raising concerns about recession risks within Europe's largest economy.

Canadian employment figures also presented a complex picture; although there were gains with employment rising by approximately twenty-two thousand positions in August following declines previously seen last month, Canada's unemployment rate rose unexpectedly from June's figure up to now standing at six point six percent which is highest since October two-thousand-twenty-one indicating potential softness ahead as predicted earlier governing council’s latest policy adjustments.

US Dollar Index (USDX/USD) [-0.2%]
The US Dollar Index (USDX) is currently down, reflecting a decline of 0.08%. This movement follows the release of the nonfarm payrolls report, which revealed an increase of only 142,000 jobs in August, falling short of the anticipated 160,000. The unemployment rate decreased to 4.2%, while average hourly earnings rose by 0.4%, surpassing expectations of 0.3%. Year-over-year average hourly earnings also showed a slight uptick at 3.8%, above the forecasted 3.7%. These labor market indicators suggest a stabilization but continued slowdown in job growth. Concurrently, the USD/JPY pair has declined, reinforcing the broader market sentiment affecting currency valuations.

US 2Y Treasury Bond (USB02Y/USD) [+0.1%]
The U.S. nonfarm payrolls report for August revealed an increase of 142,000 jobs, falling short of the anticipated 160,000, which indicates a cooling labor market. The unemployment rate eased slightly to 4.2%, aligning with market forecasts. Average hourly earnings rose by 0.4%, exceeding expectations, suggesting persistent wage pressures. These labor market indicators reflect a slowdown in job growth while highlighting ongoing challenges within the economy. Concurrently, the GBP/USD pair moved by 0.36%, which may reflect broader market sentiment and is historically correlated with the US 2Y Treasury Bond. As a result, the price of USB02Y/USD has increased by 0.1% since Thursday.

AVGO |-7.3%|-4.8B
Broadcom Inc | Semiconductors
Broadcom Inc shares are trading lower following the release of its Q3 earnings report, which disclosed a net loss of $1.9 billion, largely due to a non-cash provision of $4.5 billion. Revenue for the quarter reached $13.072 billion, surpassing analyst estimates of $12.96 billion, while adjusted earnings per share came in at $1.24, exceeding the consensus estimate of $1.20. Despite these positive metrics, the company provided a Q4 revenue guidance of approximately $14 billion, which fell short of the consensus estimate of $14.13 billion. This guidance has been perceived as soft, contributing to a nearly 6% decline in after-hours trading, where shares dropped to about $144.50.

IOT |+5.8%|+1.3B
Samsara Inc | Application Software
Samsara Inc reported Q2 revenue of $300.2 million, surpassing the analyst estimate of $289.5 million, with an adjusted EPS of $0.05, significantly exceeding the expected $0.01. The company’s annual recurring revenue reached $1.264 billion, reflecting a 36% year-over-year increase. For Q3, Samsara forecasts revenue between $309 million and $311 million and an adjusted EPS range of $0.03 to $0.04. The fiscal year 2025 guidance has been raised to a projected revenue range of $1.224 billion to $1.228 billion and adjusted EPS between $0.16 and $0.18. Following these results, Samsara's share price increased notably during after-hours trading. Concurrently, UiPath Inc experienced an increase in its stock price after releasing strong second-quarter earnings, which may correlate with the positive movement in Samsara's shares.

DOCU |+1.6% | +185.1M
DocuSign Inc | Application Software
DocuSign Inc reported strong second-quarter earnings, with an adjusted earnings per share (EPS) of 0.97, exceeding the estimated 0.80 by a notable margin. Revenue reached 736 million, surpassing expectations of 727.36 million and reflecting a year-over-year increase of 7.03%. The company also disclosed billings of 724.5 million, up 2% year-over-year, and generated free cash flow of 197.9 million, an increase from 183.6 million in the prior year. Looking ahead, DocuSign anticipates third-quarter revenue between 743 million and 747 million, above the consensus of 739.43 million, and has revised its fiscal year 2025 revenue forecast to a range of 2.94 billion to 2.952 billion. Following the earnings announcement, Baird raised its price target for DocuSign to 59 from 55 while maintaining a Neutral rating.

GWRE |+8.1% | +1.0B
Guidewire Software Inc | Application Software
Guidewire Software Inc reported fourth-quarter earnings per share of 0.62, exceeding the consensus estimate of 0.54 by nearly 15%. Revenue for the quarter reached 291.51 million, surpassing expectations of 283.89 million and reflecting an increase of almost 8% year-over-year. The company provided strong forward guidance, projecting first-quarter revenue between 251 million and 257 million, above the consensus of 236.1 million. In addition, several analysts have raised their price targets for Guidewire, with Oppenheimer increasing it to 185 from 170, JMP Securities raising it to 179 from 141, and Stifel adjusting it to 175 from 140. Following the earnings announcement, Guidewire's stock experienced a notable increase of approximately 10% shortly thereafter.

GSK | +1.3% | +2.4B
GSK plc | Pharmaceuticals
GSK plc reported positive results from the MATINEE Phase 3 clinical trial of Nucala (mepolizumab), which successfully met its primary endpoint by significantly reducing the annualized rate of moderate to severe exacerbations in patients with chronic obstructive pulmonary disease (COPD) when combined with optimized inhaled maintenance therapy. The trial demonstrated a statistically significant reduction in exacerbations over a treatment period of up to 104 weeks, with preliminary safety results consistent with Nucala's established safety profile. Although Nucala is not globally indicated for COPD, it has been a substantial contributor to GSK's sales, generating £1.65 billion in revenue, reflecting an 18% year-over-year increase. Following this announcement, GSK's stock price increased by 1.1% in pre-market trading.

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