What happened last week…
The S&P 500 and NASDAQ reached new intraday all-time highs on Friday and closed out the week with weekly gains of 0.33% and 1.14%, respectively.
Odds continue to project that the Federal Reserve will cut interest rates this month. According to the CME FedWatch Tool, as of September 5, there is an 88.4% probability for a 25-basis point reduction and an 11.6% probability for a 50-basis point reduction at the next Federal Open Market Committee meeting that takes place on September 16-17. Current rates are set at 4.25% to 4.50%.
After ruling last year that Alphabet (GOOG) was an illegal monopoly, U.S. District Judge Amit Mehta ruled that the company will not be required to divest from its Chrome browser nor its Android operating system stating, “Plaintiffs overreached in seeking forced divesture of these key assets, which Google did not use to effect any illegal restraints.” The decision also states that Google will be “barred from entering or maintaining any exclusive contract relating to the distribution of Google Search [and] Chrome.” Alphabet stock rose 9% the day following the news as it avoided a worst-case outcome. The gain added about $234 billion to the company’s market capitalization.
Elliott Investment Management has taken a stake in PepsiCo (PEP), valued at about $4 billion, and presented changes it would like the company to implement. Among those changes includes the refranchising of its bottling network and divesting non-core assets.
The ADP employment change was 54,000. The unemployment rate matched expectations of 4.3%. Nonfarm payrolls reached 22,000. Average hourly earnings month-over-month matched expectations as it remained at 0.3%.
The manufacturing PMI for August increased to 48.7 from 48.0. Meanwhile, the non-manufacturing PMI for August beat expectations (51.0) as it increased to 52.0 from 50.1, which is the highest reading since February.
Happening this week…
On Thursday, the inflation rate year-over-year for August is expected to be 2.9%. Meanwhile, the core inflation rate year-over-year for August is expected to remain at 3.1%.
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- The Rockline Team
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