Day: 2 August 2024

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U.S. non-farm payroll job growth comes in at 114,000 in July 2024, much less than expected, as unemployment rate rises to 4.3%

Workers

In July 2024, U.S. job growth decelerated more than anticipated, and the unemployment rate increased slightly, according to a report from the Labor Department on Friday.

Non-farm payrolls expanded by only 114,000 for the month, a decrease from June’s downwardly revised figure of 179,000 and falling short of the Dow Jones prediction of 185,000. The unemployment rate rose to 4.3%, marking the highest level since October 2021.

Average hourly earnings, an indicator of inflation, rose by 0.2% for the month and were up 3.6% from 2023, both measures not meeting the increases of 0.3% and 3.7% expected.

Following the release of the report, stock market futures extended their losses, and Treasury yields saw a significant drop.

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Asia markets fall as Japan’s Nikkei drops 5% to an 8-month low

Nikkei falls

Japan’s benchmark indices plummeted on Friday 2nd August 2024, with most Asia-Pacific markets lower after a sell-off on Wall Street created recession worries.

The Nikkei 225 index plunged around 5.80% to close at 35909, its most significant fall since March 2020, dipping below the 36000 for the first time since January 2024.

The Nikkei recently record a high of 42000

Nikkei 225 one-year chart 2nd August 2024

Nikkei 225 one day chart 2nd August 2024

Nikkei 225 one day chart 2nd August 2024

The broader Topix index experienced an even steeper decline of 6.14%, marking its worst performance in eight years, ending the day at 2537.

Daiwa Securities emerged as the biggest loser on the Nikkei index with an 18.85% erosion of its market cap.

Other prominent stocks also suffered losses; Softbank Group’s shares dropped over 8%, while trading giant Mitsui recorded a decline of more than 10%.

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Amazon, Intel, Meta, Nintendo, Apple, Snap, Qualcomm and others report – here’s a brief round-up

Reports summary 31st July 2024 -1st August 2024

Amazon offers weak guidance citing Olympics and the Trump assassination attempt as cause (consumers are distracted). However, Amazon’s cloud unit reports 19% revenue growth, topping estimates and a 20% increase in business in Q2. Amazon stocks pull back after guidance update.

Intel endures a 22% share plunge dragging down other global microchip stocks from TSMC, ASML to Samsung. Company to cut 15% of workforce, reports quarterly guidance miss.

Meta shares climb 6% on positive earnings data and good revenue forecast. Zuckerberg enthused over AI and how it’s helping create profits suggesting ‘Meta’s advertising growth is proof that BIG AI spending is already paying off.’ However, Meta’s Reality Labs posts $4.5 billion loss in second quarter.

Nintendo profit falls 55% as sales of its ageing Switch console plunge. Nintendo revenue and profit plunged in Q1 as sales of its ageing Switch console decline. Nintendo sold 2.1 million units of its Switch consoles, down 46% on the year. Investors are seeking news surrounding a successor to the Nintendo Switch console.

Apple sales climbed 5%, topping estimates as iPad and services revenue lift despite ongoing issues with iPhone sales slipping in China. Apple is spending more on AI but remains way behind its peers.

Snap shares plunge more than 20% on weak guidance.

Qualcomm beats estimates as phone microchip sales up 12%.

Samsung Q2 revenue and profit comes in above estimates amid strong AI demand.

AMD jumps 5% as global microchip stocks rally. Data centre sales doubled.

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Microsoft says OpenAI is now a competitor search and AI

AI competition

Microsoft’s list of competitors, which is updated regularly, now features OpenAI, previously a long-term strategic ally.

This development follows OpenAI’s announcement of a search engine prototype.

As OpenAI’s exclusive cloud provider, Microsoft leverages OpenAI’s AI models for products aimed at commercial clients and consumers. Microsoft, OpenAI’s largest investor, has reportedly invested some $13 billion in the firm.

Microsoft’s filing lists OpenAI, the entity behind the ChatGPT chatbot, as a competitor in AI solutions, as well as in the realms of search and news advertising. OpenAI recently unveiled a search engine prototype named SearchGPT.

However, recent developments suggest a shift, with both companies encroaching on each other’s domains.

While some opt to directly pay OpenAI for model access, others utilise Microsoft’s Azure OpenAI Service. Additionally, Microsoft offers the Copilot chatbot as an alternative to ChatGPT, accessible via the Bing search engine and Windows operating systems.