Yahoo Finance Markets Buoy into the Green Ahead of Jobs Report
Two of the main market indices ended their four-day losing streak today, on what appears to be a technical rally off a pretty sizable drop-off since last Friday’s hawkish speech from Fed Chair Jay Powell. The Dow gained +146 points, or +0.46%, while the S&P 500 closed up +0.30%. On the other side of the coin, the Nasdaq slipped another -0.26% while the small-cap Russell 2000 dropped -1.22% further. All indices finished well off session lows.
We saw another set of good economic numbers after today’s open this morning, from both PMI and ISM Manufacturing in the month of August. ISM matched the previous month’s 52.8%, a full point better than expected (and still notably above the 50-point line between expansion and contraction), while PMI ticked up to 51.5 from 51.3 expected and in the July print. Modest manufacturing growth, to be sure, but no hint of recessionary pressures here. Earlier, Q2 Productivity and Unit Labor Costs were still well outside the optimum range, but revised toward the positive.
A couple key earnings reports are out this afternoon, late into the fiscal Q2 cycle. Microchip major Broadcom AVGO outperformed expectations on both top and bottom lines, with earnings of $9.73 per share surpassing the Zacks consensus of $9.62 (and another orbit from the $6.96 per share reported in the year-ago quarter), on $8.46 billion in sales, which beat the $8.41 billion expected. Robust demand across its cloud-service platforms, and solid demand continuing into Q4 were cited in the report.
Shares of Broadcom are up +2% on the news in today’s late session, as its Data Center, Broadband and Wireless segments all performed well. The company has not missed on earnings in at least five years, making it one of the most reliable chip makers in what has been a prolonged turbulent period for the industry, to say the least. Broadcom still has a ways to go to make up for its -10% drop over the past week.
Athleisure giant lululemon LULU also outpaced expectations on both earnings and sales in Q2, reporting $2.20 per share which made easy work of the Zacks consensus $1.86 per share, on strong same-store sales. Revenues of $1.87 billion sped past the $1.77 billion analysts were looking for, up +29% year over year, and forward guidance has been raised. For these reasons, LULU is up big — currently +9% — in late trading.
Tomorrow morning, we’ll get the non-farm payroll report from the U.S. Bureau of Labor Statistics (BLS), which is expected to come down sizably from the +528K reported a month ago, to around +318K expected for August. Unemployment is expected to stay pat at 3.5% — matching the lowest levels in 50 years, which is remarkable considering the economy is technically in a “recession.”
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