Wall Street Today | Fed Officials Tout Job-Market Slowdown, Seek to Pivot From Hikes
MACRO
Fed Officials Tout Job-Market Slowdown, Seek to Pivot From Hikes
Two Federal Reserve officials said slower US employment gains suggest the labor market is coming into better balance, arguing the central bank may soon need to pivot to thinking about how long to hold interest rates at elevated levels.
"I expected the economy to slow down in a fairly orderly way, and this number — 187,000 — comes in continuing that pace," Atlanta Fed President Raphael Bostic said Friday on Bloomberg Television's Wall Street Week with David Westin, referring to the July hiring figure in a monthly jobs report published earlier in the day.
US Wage Growth, Lower Unemployment Underpin Solid Jobs Market
US employment increased at a solid pace in July while wages rose at a faster-than-expected clip, consistent with sustained labor demand that's at the root of renewed momentum in the economy.
Nonfarm payrolls increased 187,000 last month following a similar advance in June, a Bureau of Labor Statistics report showed Friday. The unemployment rate unexpectedly dropped to 3.5%, one of the lowest readings in decades.
JPMorgan Scraps US Recession Call Amid Spreading Optimism
JPMorgan Chase & Co. economists scrapped their call for a recession in the US, joining a growing number of forecasters who now expect the economy to avert the downturn that was once viewed as inevitable.
The bank, which had previously said it expected a recession to begin in 2023, now sees continued expansion this year and "modest, sub-par growth" in 2024 as the most likely scenario. Michael Feroli, JPMorgan's chief US economist, flagged the rising possibility of "healthy non-inflationary growth" thanks to potential productivity gains from artificial intelligence and a pickup in labor supply.
SECTORS
Amazon's Big Quarter Drives Gains in Snowflake and Other Cloud Software Stocks
For multiple quarters now, cloud computing growth has been decelerating, a fact made clear by the financial results from the three largest players: $Microsoft(MSFT.US$, $Amazon(AMZN.US$, and $Alphabet-C(GOOG.US$. All three vendors noted that customers were "optimizing" their cloud spending,—looking for ways to get more from the growing portion of IT budgets devoted to computing and analytics on Amazon Web Services, Microsoft Azure, and Google Cloud.
Oil Posts Sixth Weekly Gain After Saudis, Russia Extend Cuts
Oil posted its sixth straight weekly gain, the longest streak in more than a year, after OPEC+ heavyweights Saudi Arabia and Russia extended supply curbs into next month and US stockpiles sank by a record.
West Texas Intermediate settled above $82 a barrel, taking gains during the six-week span to about 20%. Saudi Arabia said Thursday it would extend its unilateral 1 million barrel-a-day output cut into September and that the move could be prolonged further or even deepened. Russia will extend cuts to its exports into next month, although it tapered the size of the reduction.
COMPANY
Apple Gets a Rare Downgrade. U.S. Slowdown 'Likely to Last,' Analyst Says
Finding reason for worry in $Apple(AAPL.US$'s June-quarter financial results, Rosenblatt Securities analyst Barton Crockett on Friday issued a rare downgrade as the tech giant continues to show no top-line growth.
Crockett cut his rating on Apple stock to Neutral from Buy, keeping his target price at $198, not far from the current price.
Fisker Earnings Beat Forecasts. But the Stock's Gain Turned to a Loss
$Fisker(FSR.US$ earnings, reported Friday morning, topped analyst expectations, but that was the extent of the good news. Sales were far worse than Wall Street projected. Production guidance was cut, too.
Fisker lost 25 cents from $825,000 in sales. Wall Street was looking for a 27-cent loss from $48.9 million in sales. The loss was smaller than expected, but losses at start-ups with little in the way of sales can be all over the place. The sales number is the bigger surprise.
Nikola Stock Falls 26%. There Is a Lot of News to Digest
Shares of electric heavy-duty truck maker $Nikola(NKLA.US$ fell sharply after the company reported better-than-expected second-quarter results. But the earnings numbers aren't the only things that matter right now.
Nikola reported a loss per share of 20 cents from sales of $15.4 million on Friday morning. Wall Street was looking for a 22-cent loss from sales of $15 million. The company produced 33 trucks and delivered 45 in the quarter.
Cinemark Stock Rises on Earnings Beat. Enthusiasm for Cinemas 'Strong as Ever'
$Cinemark(CNK.US$ posted earnings of 80 cents a share, pivoting from a loss in the year-ago quarter and higher than the 54 cents Wall Street had forecast. It also reported better-than expected revenue of $942.3 million.
Attendance for the period was 64.4 million patrons, rising 23.8% from a year ago.
Source: Bloomberg, Dow Jones, CNBC
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