Thursday, August 31, 2023

👀The Slowdown Is Here – Watch for More Opportunities Like August’s Drop

Good morning. New job growth slowed in August to nearly half its July level. And the second...
It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.

Good morning. New job growth slowed in August to nearly half its July level. And the second quarter GDP data indicated a slowdown from its first estimate. The economic slowdown is here. So far, the economy has managed to deal with the jump in interest rates from zero percent less than two years ago to over 5 percent today.

Meanwhile, company executives sound fairly bullish on their earnings calls. Discussions of a recession have significantly dropped. It's possible that the economy is moving towards that "soft landing" that the Federal Reserve has been hoping for.

A slowdown will likely reflect itself in slowing asset returns. That could mean choppy markets in the next few months, with a slight year-end rally. Investors and traders alike have opportunities for any selloff, which, like August's drop, may seem scary at first, but prove short-lived.

Now here's the rest of the news:

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MARKETS
DOW 34,890.24 +0.11%
S&P 4,514.87 +0.38%
NASDAQ 14,019.31 +0.54%
*As of market close
Markets moved higher on Wednesday, extending gains for a fourth consecutive day.
Oil rose 0.6 percent, closing at $81.63 per barrel.
Gold rose 0.3 percent, last going for $1,972 per ounce.
Cryptocurrencies trended lower, with bitcoin at $27,192 at the stock market close.

Today's TOP TIPS
Buy When a Stock Drops From Missed Market Expectations
Earnings season can see some wild, and often counterintuitive, swings. A company can beat on earnings, but can still sell off. Or a company can miss, but provide forward guidance that causes shares to soar.

Amid this earnings season shuffle, investors can often get an opportunity to buy a high-flying stock once it's had some of the wind knocked out of it. By buying at a lower price, investors can get better returns moving forward.

» FULL STORY

Insider Activity Report: Dick's Sporting Goods (DKS)
Sandeep Mathrani, a director at Dick's Sporting Goods (DKS), recently added 1,300 shares. The buy increased his stake by 16 percent, and came to a total cost of $147,602.

This marks the first insider buy at the company since May 2022. Insiders, including the company CEO and the CFO, have been regular sellers of shares, at prices both above and below the current price.

» FULL STORY

Unusual Options Activity: Caterpillar (CAT)
Construction equipment manufacturer Caterpillar (CAT) has been on a tear, with shares hitting a new all-time high in recent sessions. One trader sees the rally continuing in the coming months.

That's based on the November $310 calls. With 77 days until expiration, 25,633 contracts traded compared to a prior open interest of 415, for a 62-fold rise in volume on the trade. The buyer of the calls paid $4.25 to make the bullish bet.

» FULL STORY

IN OTHER NEWS
Job Growth Slows in August

The private sector in the U.S. increased by just 177,000 in August, according to the latest data from ADP. That's well under the 371,000 jobs added in July. Economists were expecting 200,00 jobs to be created. The latest data is now about on par with the pace of job creation in the U.S. before the pandemic.
GDP Growth Slows in Second Quarter

Gross domestic product slowed to an annualized rate of 2.1 percent in the second quarter of 2023, according to the latest estimate from the Commerce Department. The agency had originally estimated growth at 2.4 percent. The slowdown indicates that moves to raise interest rates to slow the economy and reduce inflation are paying off.
Johnson & Johnson Finishes Kenvue Spinoff

Medical supply company Johnson & Johnson (JNJ) has completed its spinoff of Kenvue (KVUE). The company is a dividend payer, and is the holding company for healthcare products such as Tylenol, Zyrtec, Neutrogena, Band-Aid, and others.
Credit Card Providers Prepare to Raise Fees

Credit card giants Visa (V) and MasterCard (MA) are preparing to raise fees as soon as October and possibly again in April of next year. Higher fees could translate into an extra $502 million in revenues for the companies. Many merchants have added higher fees for those paying with credit cards in recent years to fight high fees.
Apple to Unveil iPhone 15 In Mid-September

Consumer tech giant Apple (AAPL) is set to introduce the iPhone 15 on September 12 at its Apple Park headquarters in Cupertino. The company's latest offering, the iPhone 14, has become a global top seller as buyers have looked to obtain the best smartphone technology possible, rather than shop around on price.

S&P 500 MOVERS
TOP
PODD 6.407%
ALL 3.397%
MTCH 3.148%
EL 3.127%
HPE 3.088%
BOTTOM
HPQ 6.631%
BF.B 3.984%
EVRG 2.873%
CNC 2.669%
CHTR 2.569%

Quote of the Day
[The market's recent] move goes back to a 'bad news is good news' type environment, which tends to be the case when investors are worried about rates and Fed policy. Any softness in economic data results in less upward pressure on yields, and that helps equities.
- Sonu Varghese, global macro strategist at Carson Group, on the market's recent rally given the slowdown in economic data, including slow job growth.

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