What happened last week…
All three indices finished lower for the week: DJIA (-2.93%), S&P 500 (-4.25%), NASDAQ (-5.77%). It was the worst performance for the S&P 500 since March 2023. However, the market has made solid gains in 2024 with year-to-date performances as follows: DJIA (7.05%), S&P 500 (13.39%), NASDAQ (11.19%).
Nvidia (NVDA) denied reports that it received a subpoena from the Department of Justice regarding an antitrust investigation. According to a Bloomberg report, “Antitrust officials are concerned that Nvidia is making it harder to switch to other suppliers and penalizes buyers that don’t exclusively use its artificial intelligence chips, according to the people, who asked not to be identified.”
Verizon (VZ) will purchase Frontier Communications (FYBR) in an all-cash deal valued at $20 billion to grow its fiber internet footprint. Verizon’s fiber network is largely in the Northeast and Mid-Atlantic while Frontier’s customer base reaches the Midwest, Texas, California, among other states. The deal is expected to close in about 18 months.
The ADP employment change missed expectations (140,000) as it decreased to 99,000 from the downwardly revised 111,000 (122,000), making it the lowest reading since January 2021. The unemployment rate matched expectations as it decreased to 4.2% from 4.3%, which had been the highest level since October 2021. Nonfarm payrolls landed below expectations (161,000) but increased to 142,000 from the downwardly revised 89,000 (from 114,000). Average hourly earnings month-over-month were higher than expectations (0.3%) as it rose to 0.4% from 0.2%.
The manufacturing PMI for August missed expectations (47.5) but increased to 47.2 from 46.8, which snapped a streak of four straight monthly declines. It is the 21st contractionary reading (below 50) in the past 22 months. Meanwhile, the non-manufacturing PMI for August beat expectations (51.1) as it increased to 51.5 from 51.4. The figure has expanded 48 of the previous 51 months.
This week…
The following companies report earnings this week: ORCL, ADBE.
On Wednesday, the inflation rate year-over-year for August is expected to decrease to 2.6% from 2.9%, which was the fourth straight monthly decline and the lowest reading since March 2021 (2.6%). The rate peaked at 9.1% in June 2022. Meanwhile, the core inflation rate year-over-year for August is expected to remain at 3.2%, which was the lowest reading since April 2021 (3.0%).
Thanks for Reading!
- The Rockline Team