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Markets Close Higher on Earnings, Job Revisions and Fed Minutes
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Wednesday, August 21st, 2024
Market indexes had a decent trading day today. Only the blue-chip Dow spent any meaningful time in the red; the other indexes — especially the small-cap Russell 2000 — upturned as of lunchtime and began what may be the latest winning streak in the markets. The Dow closed +0.13%, the S&P 500 was +0.42%, the Nasdaq grew by +0.57% and the Russell 2000 went up +1.22% for the session.
Jobs Revisions Sank by -818K, Deeper than Expected
The Bureau of Labor Statistics (BLS) anticipated a rollback on total job fills between April 2023 and March 2024 (about -500K), but not as deep as -818K overall. This accounts for nearly -30% of job gains during that period, down from 2.9 million originally reported.
Business Services took the majority of the brunt, down -358K, followed by Leisure/Hospitality at -150K and Manufacturing -115K. One third of Trade, Transportation and Utilities —Transportation/Warehousing — grew by +56.4K, while Trade sank down to -129K in the quarter. Education/Healthcare also grew by +87K. These find us back on “bad news is good news” footing, whereby a lower-than-expected labor market over that time frame is expected to hasten a rate cut from the Fed on September 18th.
Fed Minutes from July 30-31 Meeting
Speaking of the Fed, the latest minutes from the Federal Open Market Committee (FOMC) meeting on July 31st were released today. Though, as we saw in real time, no voting members of the FOMC chose to go against Fed Chair Jerome Powell’s decision, today’s minutes illustrate that several members saw the case for cutting rates at the July meeting.
The minutes depicted a Fed that saw economic conditions as neither a “headwind or a tailwind to growth,” but did acknowledge it saw Personal Consumption Expenditures (PCE) month over month smaller than earlier this year. Nonfarm payrolls were lower than they were Q1 and 2023 — and that’s before today’s latest revision of down -818K.
Quarterly Earnings Roundup
Urban Outfitters (URBN - Free Report) posted fine quarterly results, with earnings of $1.24 ahead of the 98 cents in the Zacks consensus on $1.35 billion — a record sales quarter. Boosted by +62.6% growth in its fledgling Nuuly apparel subscription rental business ($90.7 million, as opposed to Anthropologie’s $569.1 million), Urban Outfitters shares have been bouncing around in late trading. The stock had been trading +16% year to date, nearly at par with the S&P.
Software security firm Synopsys (SNPS - Free Report) outpaced expectations on its quarterly bottom line this afternoon, posting earnings of $3.43 per share, above the $3.28 expected and $2.88 per share in its year-ago quarter. Revenues were in-line at $1.53 billion, and future guidance has been revised upward. The stock is up off its recent lows in early August, and +1.5% in today’s after-trading.
Zoom Video (ZM - Free Report) missed on its earnings results this afternoon on revenues in the quarter that topped estimates by +2.1%. That said, these results do not reflect the impact of its July 31st share repurchase program. Guidance, however, is up for both next quarter and full year earnings and revenues, which is helping shares move higher by +2.8% in after-hours trading.
Image: Bigstock
Markets Close Higher on Earnings, Job Revisions and Fed Minutes
Wednesday, August 21st, 2024
Market indexes had a decent trading day today. Only the blue-chip Dow spent any meaningful time in the red; the other indexes — especially the small-cap Russell 2000 — upturned as of lunchtime and began what may be the latest winning streak in the markets. The Dow closed +0.13%, the S&P 500 was +0.42%, the Nasdaq grew by +0.57% and the Russell 2000 went up +1.22% for the session.
Jobs Revisions Sank by -818K, Deeper than Expected
The Bureau of Labor Statistics (BLS) anticipated a rollback on total job fills between April 2023 and March 2024 (about -500K), but not as deep as -818K overall. This accounts for nearly -30% of job gains during that period, down from 2.9 million originally reported.
Business Services took the majority of the brunt, down -358K, followed by Leisure/Hospitality at -150K and Manufacturing -115K. One third of Trade, Transportation and Utilities —Transportation/Warehousing — grew by +56.4K, while Trade sank down to -129K in the quarter. Education/Healthcare also grew by +87K. These find us back on “bad news is good news” footing, whereby a lower-than-expected labor market over that time frame is expected to hasten a rate cut from the Fed on September 18th.
Fed Minutes from July 30-31 Meeting
Speaking of the Fed, the latest minutes from the Federal Open Market Committee (FOMC) meeting on July 31st were released today. Though, as we saw in real time, no voting members of the FOMC chose to go against Fed Chair Jerome Powell’s decision, today’s minutes illustrate that several members saw the case for cutting rates at the July meeting.
The minutes depicted a Fed that saw economic conditions as neither a “headwind or a tailwind to growth,” but did acknowledge it saw Personal Consumption Expenditures (PCE) month over month smaller than earlier this year. Nonfarm payrolls were lower than they were Q1 and 2023 — and that’s before today’s latest revision of down -818K.
Quarterly Earnings Roundup
Urban Outfitters (URBN - Free Report) posted fine quarterly results, with earnings of $1.24 ahead of the 98 cents in the Zacks consensus on $1.35 billion — a record sales quarter. Boosted by +62.6% growth in its fledgling Nuuly apparel subscription rental business ($90.7 million, as opposed to Anthropologie’s $569.1 million), Urban Outfitters shares have been bouncing around in late trading. The stock had been trading +16% year to date, nearly at par with the S&P.
Software security firm Synopsys (SNPS - Free Report) outpaced expectations on its quarterly bottom line this afternoon, posting earnings of $3.43 per share, above the $3.28 expected and $2.88 per share in its year-ago quarter. Revenues were in-line at $1.53 billion, and future guidance has been revised upward. The stock is up off its recent lows in early August, and +1.5% in today’s after-trading.
Zoom Video (ZM - Free Report) missed on its earnings results this afternoon on revenues in the quarter that topped estimates by +2.1%. That said, these results do not reflect the impact of its July 31st share repurchase program. Guidance, however, is up for both next quarter and full year earnings and revenues, which is helping shares move higher by +2.8% in after-hours trading.
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