To The Moon

We saw the stock market remained relatively unchanged from Tuesday's close.

The S&P 500 did an early test at the level 5,506 but eventually dropped below the level in the afternoon session. S&P 500 settled with a market breadth that showed a lack of conviction on either side, resulting in lackluster action and choppy movement in some mega cap names.

The uptick in imports, which will act as a drag on Q3 GDP forecasts but is a reassuring demand signal for the U.S. economy. We also saw business spending languished in July.

The market was digesting the JOLTS report, which showed that job openings fell to 7.673 million from 7.910 million in July, reaching their lowest level since early 2021.

Here are the economic data that we will be expecting on Thursday (05 Sep 2024).

Thursday’s calendar features data on the labor market, including weekly jobless claims and the ADP Employment Change for August.

NVIDIA (NVDA) shares were volatile today in response to a report, which the company then denied, that it received a DOJ subpoena.

Note Yield Up Did Not Trigger Equities Selling

Treasury yields declined, with the 10-year note yield up 12 basis point to settle at 3.771% while 2-year note yield also up 11 basis point to 3.785%.

This did not stir selling in equities, as weakness in the labor market is expected to drive the Fed to cut rates by 50 basis points this month.

The fed funds futures market now sees a 45.0% probability of a 50 basis points rate cut at the September 17-18 FOMC meeting, up from 38.0% on Tuesday (03 Sep), according to the CME FedWatch Tool.

S&P 500 Real Estate and Consumer Staples Continue In The Green

S&P 500 Utilities sector lead the pack with +0.85% with consumer staples and real estate coming in second and third with +0.52% and +0.25% respectively.

Energy was the biggest loser with -1.42% after oil prices dropped below $70.00/bbl. WTI crude oil futures settled 1.8% lower at $69.13/bbl, reflecting lingering concerns about growth prospects impacting demand.

Stocks To Watch

$C3.ai, Inc.(AI)$ shares plunged nearly 15% after the enterprise software maker provided disappointing guidance for the upcoming quarter. The company reported a loss of $0.05 per share, with revenue rising 20.5% to $87.2M, but subscription revenue came in below estimates at $73.5M. C3.ai's fiscal second-quarter sales forecast of $88.6M to $93.6M also fell short of expectations, leading to the sharp decline in stock price.

$NVIDIA Corp(NVDA)$ clarified that it did not receive a subpoena from the Department of Justice regarding an antitrust probe, despite reports suggesting otherwise. The company emphasized its competitive practices and willingness to cooperate with regulators. Nvidia shares fell around 1% following the news. Nvidia continues to dominate the AI accelerator market, holding approximately 80% share.

After which, the stock has been on a downward trend, losing 9.5% on Tuesday, which wiped out $279B in value. Deutsche Bank analyst Jim Reid noted that Nvidia has experienced some of the largest market declines and increases in history. The recent downturn follows a fiscal second-quarter report that, despite doubling revenue year-over-year, failed to meet the highest market expectations.

U.S. Steel (X) saw its stock plummet 18% on reports that President Joe Biden is preparing to block Nippon Steel's acquisition of the company. The administration has deemed the $14 billion deal a national security risk, a decision expected to be finalized soon. This move follows evaluations by the Committee on Foreign Investment in the U.S., which raised concerns that could not be mitigated.

$GitLab, Inc.(GTLB)$ shares surged over 15% after the company reported strong fiscal Q2 results and raised its full-year outlook. GitLab expects adjusted EPS of $0.15 to $0.16 for Q3, surpassing analyst forecasts. The company also increased its full-year revenue guidance, further boosting investor confidence.

Look at my previous article where I share on GTLB earnings to look at : GitLab (GTLB) Dollar-Based Net Retention Rate (DBNRR) To Watch

From the technical, we can see that GTLB has made a reversal with MACD forming a bullish crossover, and KDJ is also making an upside move, with J value trending higher.

So this should give investors enough confidence to go into this stock for potential long term growth.

Summary

Market seem to show that it is in a state of waiting for investors conviction as they comprehend the economic data received on Wednesday, and there will be more economic data on Thursday that could give investors a glimpse on how the rate cut decision could be like on 17-18 September FOMC meeting.

The probabilities of 50 basis point cut have increased but will this continue to stay this week, I think we might want to continue to have some defensive strategy in our portfolio to safeguard against any uncertainty.

Appreciate if you could share your thoughts in the comment section whether you think market would stage a small recovery after remain stagnant on Wednesday, following a better economic data on Thursday?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.