Richard Dixon Rings Opening Bell, Nasdaq Up 0.5%
Wall Street opens the session just above par. At 3:30 p.m. the Dow Jones rises by 0.2%, the S&P 500 by 0.3% and the Nasdaq by 0.4%. The American stock markets are confidently awaiting the speech by Jerome Powell from Jackson Hole, the summit of central bankers. The president of the Fed will speak tomorrow, August 23, but a prelude to his statements came yesterday, August 21, from minute of the American central bank.
The minutes revealed that most of the Fed members were in favor of a rate cut in September. Fed funds are now at 5.25-5.5%, the highest in over 20 years. Markets are wondering how big the cut will be, however: according to CME FedWatch, rates will drop by 1% by December.
PMI: services hold up, manufacturing does badly
Macro data will help understand which path the Fed will take. Today, August 22, the pmi by S&P Global highlight the resilience of the sector services in August, with the index rising to 55.2 points from 55 in July. The reading exceeded the consensus, which had indicated a decline to 54 points.
A completely different story in the sector manufacturing: the PMI fell to 48 points from 49.6 points in July, remaining below the 50 points that separate economic growth from contraction. In this case the forecast was 49.5 points. So the composite pmi fell to 54.1 points from 54.3 points in July. The figure is still higher than the 53.2 points estimated by analysts.
The job market is cooling down
The other important macro data of the day is the one on new Weekly claims for unemployment benefits. In the week ended August 17, claims rose more than expected to 232,000. That’s higher than the previous figure of 228,000 and the 230,000 analysts had estimated. The labor market appears to be cooling, which could prompt the Fed to speed up cuts. Here are five stocks to watch on Thursday, August 22.
1. Edgar Bronfman raises the stakes Paramount
At 3:30 p.m., Paramount Class A stock is up 0.6%. The battle for the entertainment giant is heating up. The entrepreneur Edgar Bronfman Jr.former CEO of Warner Music, has raised his offer to 6 billion to snatch National Amusementsthe family holding Redstone which controls Paramount, to Skydance Media. Bronfman’s initial offer was $4.3 billion.
2. Japan Tobacco Offers $2.4 Billion for Vector
At 3:30 p.m., Vector Group shares are down 0.2%. The fourth-largest company in tobacco of the United States will be acquired by Japan Tobacco for 2.4 billion ($15 per share). The operation will allow the Japanese company to strengthen its position on the American market, the second largest in the world after China. With this move Japan Tobacco will triple its share in the United States, going from 2.3% to about 8%.
3. Snowflake Pays for Missed Margin Growth
At 3:30 p.m., Snowflake stock is down 10.8%. In the second quarter, the software company Beat expectations on profits and revenues (829.3 million vs 808.4 million) and has raised revenue forecasts of 2024 (3.36 billion from 3.3 billion) thanks to the greater customers attracted to its cloud platformenhanced with AI. The title suffers though because, according to analysts, revenue growth is not accompanied by margin growth.
4. Trimestrale in chiaroscuro per Urban Outfitters
At 3:30 p.m., Urban Outfitters shares are down 12%. The clothing retailer is paying for mixed financial results. In the second quarter, the group recorded a jump in both the saleswhich grew to 1.35 billion (+6.3%), which of theearnings per shareincreased to $1.24. Both data have Beat expectations (earnings per share of $1 and revenue of $1.34 billion). But sales at Urban Outfitters brand stores fell 9.3%, more than expected. Analysts had expected a decline of 8.3%.
5. Peloton Revenue Grows After Nine Quarters
At 3:30 p.m. Peloton stock jumps 17%. In the fourth quarter, the company tech sports equipment managed to grow revenue for the first time in nine quarters. The sales Peloton’s earnings rose from $642.1 million to $643.6 million, above the consensus expectation of $631 million. Also loss improved and fell from 68 cents to 8 cents per share, less than the 17 cents expected by analysts. (reproduction reserved)