Stocks Surge as Big Tech Earnings and Employment Data Influence Investors.
Introduction
In the world of finance, every move counts, and Friday proved to be no exception as stocks surged, driven by the impact of Big Tech earnings and crucial employment data. Investors closely analyzed the latest financial reports of major technology companies and paid keen attention to the July jobs data, which turned out to be weaker than expected.
Jobs Data and Market Reaction
Amidst the anticipation surrounding the July jobs data, the report revealed the addition of 187,000 jobs during the month. Although positive, this figure fell short of the 200,000 jobs projected by economists polled by Dow Jones. Nevertheless, it did lead to a slight reduction in the unemployment rate, dropping from 3.6% to 3.5%.
Digging deeper into the data, one bright spot emerged. Average hourly wages experienced a 0.4% increase for the month and a notable 4.4% surge on an annualized basis. These figures surpassed initial forecasts, which had predicted a 0.3% monthly rise and a 4.2% annual growth.
Commenting on the situation, Mike Loewen Gart, head of model portfolio development at Morgan Stanley Global Investment Office, stated, “Higher for longer is still the base case for interest rates, but if employment numbers continue to cool, it will make it easier for the Fed to shift to a less-hawkish stance. However, there are two sides to this coin: If the labor market slows too much, recession fears may gain new traction.”
Big Tech Earnings Overview
Wall Street witnessed a flurry of earnings reports released after the closing bell on Thursday and before the opening on Friday. Among the major technology companies, Amazon took the lead, experiencing a remarkable 9% rise in stock value. This surge was a result of the company exceeding profit estimates and providing strong forecasts, instilling confidence among investors.
However, Apple, another tech giant, faced a 2.6% decline due to decreased revenue from the previous quarter. Despite its strong position in the market, it experienced a temporary setback.
Airbnb and DraftKings in Focus
Apart from mega-cap tech firms, Airbnb was in the spotlight as the company reported slower growth in nights and experiences booked than what Wall Street had anticipated. This news triggered a dip in the company’s stock value, causing investors to closely monitor its performance in the coming days.
On the other hand, DraftKings experienced a remarkable 12% surge in its stock value following a report that exceeded analyst forecasts. The company’s strong performance ignited enthusiasm among investors, who are now closely watching its trajectory.
Nasdaq 100 Technical Analysis
To gain deeper insights into the market, experts analyzed the Nasdaq 100’s technical indicators. Currently trading in a down channel, the Nasdaq 100 found itself below both the 5 and 20 SMA (Simple Moving Average). The Relative Strength Index (RSI) indicated bullishness, while the Stochastic oscillator pointed toward an upward trend.
Trade Suggestions
For investors looking to capitalize on the Nasdaq 100’s movements, two trade suggestions were offered:
- Trade Suggestion 1
- Entry: 15674.23
- Target: 15773.48
- Stop Loss: 15606.50
- Analysis: After a sharp rise, the Nasdaq 100 entered a consolidation phase. Currently, it hovers around a key resistance level. If this level is broken, further upside potential could be unlocked.
- Trade Suggestion 2
- Entry: 15588.59
- Target: 15810.17
- Stop Loss: 15438.87
- Analysis: The Nasdaq 100 has been displaying signs of wanting to rise higher. With the proper momentum, it could reach the suggested target, provided it maintains its current trajectory.
Conclusion
The stock market exhibited its typical volatility as investors considered the latest Big Tech earnings and crucial employment data. While the job growth figures were slightly below expectations, positive indicators like rising hourly wages provided some relief. Amazon emerged as a winner with impressive earnings, while Apple faced a temporary setback. Airbnb’s slower-than-expected growth caught attention, and DraftKings generated enthusiasm with its strong performance. Traders and investors alike kept a close eye on the Nasdaq 100’s technical indicators to guide their next moves. As the market continues to evolve, adaptability and careful analysis remain key in navigating the twists and turns of the financial landscape.