Stocks today: Stocks mixed ahead of August jobs report

VaselineSeptember 5, 2024

0 3 minutes read

Stocks today: Stocks mixed ahead of August jobs report

Shares opened higher on Thursday only to find themselves struggling for direction by lunchtime. Today’s choppy price action came after the latest economic data showed the labor market continuing to cool, which came just ahead of Friday’s highly anticipated August jobs report.

Before the opening bell, data from ADP showed that private payrolls rose 99,000 in August, the slowest increase since 2021.

“The downward decline in the labor market has brought us to slower-than-normal hiring after two years of huge growth,” said Nela Richardsonchief economist at ADP. “The next indicator to watch is wage growth, which is stabilizing after a dramatic post-pandemic slowdown.”

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Indeed, the data showed that the median annual wage change for both stayers (+4.8%) and job changers (+7.3) was unchanged compared to July.

“Following ADP’s release of weaker-than-expected private jobs growth, financial markets are pricing in about 50-50 odds that the Fed will cut. interest rates by half a percent to the September 18 decision versus a quarter percent,” it says Bill Adamschief economist at Comerica Bank.

The services sector expands for the second consecutive month

Elsewhere, Institute for Supply Management Index of Service Purchasing Managers (PMI) showed that the services sector expanded for a second straight month in August, rising to 51.5 from 51.4 in July.

“Overall, the latest available data points to continued economic growth, but at a slower pace than in early 2024 or 2023,” says Adams. The data also pointed to political uncertainty as a drag on economic growth, he notes, while adding that “sometimes it’s worth stating the obvious: this friction is temporary.”

Verizon confirms acquisition of Frontier Communications

In single-stock news, Verizon Communications ( VZ ) shares fell 0.4% after the telecom giant confirmed it would buy Frontier Communications Parent (FYBR, -9.5%) in an all-cash deal valued at $20 billion.

UBS Global Research analyst John Hodulik (Neutral, Hold equivalent) believes the deal will “strengthen carrier interest in fiber assets following the expanded fiber strategy of AT&T (T, +0.4%) and T-Mobile (TMUS, -0.8%) of fiber offerings as the convergence of wireless and wired connectivity gains steam.”

The analyst adds that Verizon’s investment in fiber will be “a driver of long-term growth amid a maturing wireless market.”

Separately, VZ announced its 18th consecutive dividend increase, raising its quarterly payout by 1.9%.

C3.ai decreases as subscription revenues are insufficient

C3. have (AI) stocks fell 8.2% after the artificial intelligence (AI) applications software firm. subscription revenues were short of analysts’ expectations for its fiscal first quarter. The company also said it expects to generate negative free cash flow in the next two quarters, but anticipates that FCF will be positive for its entire business. fiscal year.

Wedbush analyst Daniel Ives (Outperformance, Buy’s equivalent) sees this as a “slight bump in the road” but remains positive through 2025. The company has “a strong pipeline across industries coupled with solid top-line growth,” Ives says, and anticipates “solid expansion as the AI revolution gains more momentum over the next few years.”

Tesla shares rise on FSD announcement

adze Shares ( TSLA ) rose 4.9% — making it one of the best-performing S&P 500 stocks today — after the electric vehicle (EV) maker announced it would releases its full self-driving assistance (FSD) software. in Europe and China in the first quarter of 2025, pending regulatory approval.

Shares of TSLA are up more than 22% in the past six months, making some on Wall Street hesitant to give the all clear. Truist Securities Analyst William Stein is one of the few people with a Hold rating on Tesla. “Tesla’s development has been a remarkable success story,” says Stein, but “the company’s best days, in terms of volume production, product innovation, and especially artificial intelligence (AI) innovations, are still ahead. road”.

Tesla’s win helped Nasdaq Composite ends the day up 0.3% at 17,127. The S&P 500 ended with a modest loss of 0.3% to 5,503, while Dow Jones Industrial Average fell 0.5% to 40,755.

VaselineSeptember 5, 2024

0 3 minutes read

Vaseline

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