July jobs report crushes expectations
The US economy added far more jobs than expected last month. On Friday, the U.S. government reported that 528,000 jobs were added in July, easily beating the Dow Jones estimate of 258,000.
Of course, average hourly earnings rose 5.2% year-over-year — well above expectations. This may be seen by the market as a sign that inflationary pressures remain strong.
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— Fred Imbert
Elon Musk thinks we’re past peak inflation
Elon Musk has said he thinks we’re past peak inflation and predicts a mild, 18-month recession.
Musk’s comments came at Tesla’s 2022 shareholder meeting on Aug. 4.
“We really get quite a sense of where the prices of things go over time, because when you’re making millions of cars, you have to buy goods many months ahead of when they’re needed,” he said.
— Carmen Reinicke
Amazon to acquire iRobot in $1.7 billion deal
Amazon will acquire iRobot for $61.00 per share, the consumer robot company announced on Friday. The all-cash transaction is valued at approximately $1.7 billion, including iRobot’s net debt.
Shares of iRobot were suspended following the news. The sale price of $61 per share is a 22% premium to Thursday’s close of $49.99. Amazon shares rose about .2% in premarket trading.
– By Michelle Fox
DoorDash surges after record orders
A Doordash delivery person rides his bike in the rain during the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York, New York, United States, November 13, 2020.
Carlo Allegri | Reuters
Shares of DoorDash rose more than 10% in premarket trading Friday after the company reported quarterly results that beat expectations after the market closed Thursday. The food delivery service reported that orders rose 23% from the last quarter of the year and revenue jumped 30%.
The company expects softer consumer spending in the second half of the year, she said.
— Carmen Reinicke
Oil kit for sudden weekly loss
Oil prices were modestly lower in Friday morning trading on Wall Street and are on track for sharp weekly losses. Concerns about slowing demand have pushed prices lower in recent sessions.
West Texas Intermediate crude futures, the US oil benchmark, fell 10.5% for the week, while international benchmark Brent crude lost 14.5%.
— Pippa Stevens
Bitcoin, Ether on track for worst week since July 1st
Cryptocurrencies tumbled this week after a rough start to the month. Both Bitcoin and Ether are down about 3% week to date and on track to mark their first negative week in five.
The performance would also be the worst weekly decline since July 1, when bitcoin lost 8.71% and ether lost 13%.
— Carmen Reinicke
Warner Bros. falls
Leslie Grace attends the premiere of Warner Bros. of “The Suicide Squad” at The Landmark Westwood on August 2, 2021 in Los Angeles, California.
Axel/Bauer-Griffon | Movie Magic | Getty Images
Stifel raises S&P 500 second-half target
Stifel’s Barry Bannister raised his second-half target for the S&P 500 to 4,400 from 4,200, noting that he continues to favor cyclical growth stocks in sectors such as software and media.
Here are two reasons Bannister gave for his goal:
- “S&P 500 1H22 selloff still reversing.”
- “The S&P 500 also narrows the S&P 500’s annualized negative EPS in 2022, but we see 2022 EPS holding up.”
Bannister’s new target suggests a 6% upside from Thursday’s close.
— Fred Imbert
European shares were flat ahead of the key US jobs report
European markets were flat on Friday morning as investors watched corporate earnings and awaited the key US jobs report.
The pan-European Stoxx 600 was little changed in early trade. Autos gained 0.8 percent, while insurance stocks fell 0.8 percent.
Earnings continue to boost individual share price movements in Europe. Allianz, Deutsche Post, London Stock Exchange Group and WPP were among the companies that reported before the bell on Friday.
– Elliott Smith
Asian markets shook off fears surrounding military tensions over Taiwan
Asia-Pacific markets rose on Friday as investors shrugged off concerns over China’s military exercises near Taiwan that followed US House Speaker Nancy Pelosi’s visit to the self-ruled island this week.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.74 percent. The Shanghai Composite in mainland China gained 0.28 percent and the Shenzhen Component rose 0.64 percent.
Taiwan’s Taiex jumped more than 2 percent, with chip maker TSMC climbing 2.8 percent.
Fewer top jobs don’t mean a weaker economy, says investor
If Friday’s jobs report showed the U.S. economy added fewer workers in July than the previous month, that’s not necessarily a sign of economic weakness, according to Brad McMillan, CIO at Commonwealth Financial Network.
“If we do see a decline in hiring, even at the expected number, it seems much more likely that it will be due to a shortage of workers than a sudden shock in labor demand,” McMillan said in a note. “With high demand, what matters here is the availability of labor.”
— Yun Li
Some on Wall Street don’t think the rally can last
The Fed’s commitment to reduce inflation, as well as the easing of recession fears, brought relief to the market. The S&P 500 is now 14.2% above its June 17 intraday 52-week low of 3,636.87. The benchmark index is also coming off its best month since November 2020, gaining more than 9% in July.
However, some on Wall Street are skeptical that the rally can last much longer. Max Ketner, chief multi-asset strategist at HSBC bank, said the comeback was “wishful thinking” and he would need to see a further reassessment of rate hike expectations and another sharp fall in real yields to believe it.
The widely followed Mike Wilson of Morgan Stanley also called this rally short-lived as corporate earnings begin to deteriorate.
Enlarge the icon Arrows pointing out
Consumer discretionary led the gains, with energy the biggest laggard this week so far
Six of the S&P 500’s 11 sectors have been in the green week to date, led by consumer discretionary, which has gained 2.9%.
The worst performing sector this week is energy, which has fallen more than 8% and is on track for its worst week since June 17. The decline in energy names came amid a drop in oil prices. WTI is down more than 10% this week, in its worst week since April.
— Yun Li
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