US equities closed mostly lower on Thursday, with the Dow down 0.54%, S&P 500 off 0.30%, and Russell 2000 falling 0.61%, while the Nasdaq managed a 0.25% gain. Big tech, particularly Tesla (+4.9%) and Amazon, helped the Nasdaq stay positive. Lagging sectors included machinery, healthcare distributors, biotech, chemicals, insurers, and telecom, while airlines, REITs, discount stores, and food/beverage outperformed. Treasuries firmed, with the yield curve flattening and the 2Y/10Y spread slightly negative after briefly turning positive. The dollar index fell 0.3%, gold rose 0.7%, and Bitcoin dropped 3.7%. WTI crude slipped 0.1% despite reports that OPEC+ will delay the return of supplies by two months.
At the sector level, Consumer Discretionary and Communications Services sectors led while Healthcare, Industrials and Financials all declined >1.00%. Sector leadership remains somewhat muddled after Tuesday’s big decline. At the index level, there is an attempt at a near term bottom. Tech has been in correction since mid-July and lower vol. sectors along with Financials have outperformed over the period.
The market fluctuated amid mixed economic data. ADP private payrolls came in weak at 99K, well below the 140K consensus, with July figures revised lower. On the positive side, initial jobless claims fell to 227K, below the 230K forecast, and ISM Services beat expectations, showing an acceleration in new orders, though the employment component fell but remained in expansion. Investors remain focused on Friday’s nonfarm payrolls report, which is expected to show an increase of 165K jobs, a drop in the unemployment rate to 4.2%, and average hourly earnings rising 0.3% m/m and 3.7% y/y. The report is key for the Fed’s upcoming rate decision, with debate over whether the central bank will opt for a 25 or 50 bp cut at its September 18 meeting.
Notable stock movements:
- Tesla (TSLA): Gained 4.9%, announcing plans to launch Full Self-Driving (FSD) in Europe and China in Q1 2025, pending regulatory approval.
- JetBlue (JBLU): Rose 7.2% after hiking Q3 revenue guidance and providing upbeat commentary on improved operational performance, lower fuel prices, and better bookings.
- G-III Apparel Group (GIII): Surged 22% after beating Q2 earnings expectations, driven by strength in DKNY and Karl Lagerfeld sales. The company also announced a licensing agreement with Converse and raised FY EPS guidance.
- Shoe Carnival (SCVL): Up 8.2%, with Q2 earnings slightly ahead of expectations, and the company raised the low end of FY revenue and EPS guidance.
- Roku (ROKU): Gained 5% after an upgrade from Wells Fargo citing stronger engagement and monetization of the Roku Channel, leading to expected revenue growth in Q4.
- Smartsheet (SMAR): Up 4.3% on reports of acquisition talks involving Vista Equity Partners and Blackstone.
- Fortive (FTV): Rose 1.5% after announcing a spinoff of its Precision Tech segment, which is expected to drive multiple expansion.
Notable decliners:
- Credo Technology (CRDO): Dropped 14.9% despite in-line Q1 earnings and revenue, as high expectations created valuation concerns.
- Verint Systems (VRNT): Fell 11.2% after missing Q2 earnings and revenue estimates, though the company reaffirmed guidance and highlighted strong AI momentum.
- Toro Co. (TTC): Down 10.1% after missing Q3 earnings and revenue forecasts and cutting FY guidance due to cautious consumer trends.
- McKesson (MCK): Declined 9.9% after announcing the sale of its Rexall and Well.ca businesses to Birch Hill Equity Partners.
- XPO Inc. (XPO): Fell 9.6% after reporting a 4.6% y/y decline in August tonnage, citing softness in the industrial and LTL markets.
- Frontier Communications (FYBR): Dropped 9.5% after Verizon confirmed it would acquire the company for $20B in cash, offering a 0.5% premium above Wednesday’s close after FYBR had already risen 38% on acquisition reports.
- Zimmer Biomet (ZBH): Down 8.7% after disclosing ERP system transition issues that are expected to impact FY sales by 1%.
- C3.ai (AI): Declined 8.2% despite beating FQ1 EPS and margin expectations, as weaker subscription revenue raised concerns.
In overnight trading, Asian markets are set for a mixed start, with Nikkei futures up 0.96%, Hang Seng futures down 0.07%, and ASX futures up 0.11%. US futures extended losses after-hours as treasuries remained firm ahead of Friday’s nonfarm payrolls. Crude oil hit December 2023 lows after the OPEC+ supply delay news, and gold continued its rebound.
Eco Data Releases | Friday September 6th, 2024
S&P 500 Constituent Earnings Announcements by GICS Sector | Friday September 6th, 2024
No Constituents Reporting
Data sourced from FactSet Data Systems
