Unemployment's High Like Powerball
Presented by
CLOSING BELL
Unemployment’s High Like Powerball
The market climbed to a record high close Thursday, as the Mag 7 grew, and the market awaits a make-or-break jobs report coming Friday. ADP numbers and initial claims were not painting a great picture today, but Friday’s nonfarm additions should be more accurate (if you believe the numbers). /s
Meanwhile, Washington was in a Congressional hearing uproar over some Trump appointees. The pick for an interim Fed seat for the remainder of the year, Stephan Miran, said he would not leave his post on the White House Council of Economic Advisors, calling into question the possibility of acting as an Independent Fed rep while on ‘leave’.
Earnings results continued to beat expectations, following the low expectations set during the spring tariff scare era. This earnings season, not all beats are equal. 👀
Today’s issue: Broadcom climbs even more, job numbers might suck tomorrow, and more. 📰
10 of 11 sectors closed green, with discretionary $XLY ( ▲ 1.83% ) leading, and utilities $XLU ( ▼ 0.12% ) lagging.
$SPY ( ▲ 0.84% ) $QQQ ( ▲ 0.91% ) $IWM ( ▲ 1.25% ) $DIA ( ▲ 0.84% )
AFTER THE BELL REPORTS
The Last Of The Semiconductor Giants Beat Estimates 💾
Broadcom, heir to the Mag 7, reported a 63% jump in AI revenue after the bell Thursday. $AVGO ( ▲ 1.23% ) climbed 4% after the report, recording $15.95B in revenue vs. estimates for $15.84B. The major semiconductor maker also raised guidance for the current quarter, above what the street wanted to see. Shares climbed even after a year-to-date run of +32%, landing the Google chip provider near the top of the tech pack at a $1.4T valuation.
Chief Hock Tan said great chip and networking software sales helped rake in revenue in the past three months. It wasn’t the only big name to report.
Lululemon $LULU ( ▲ 3.81% ) fell 15% despite an EPS and gross margin beat, after the leggings importer cut its full year earnings guidance to $12.77-$12.97 vs. a previously set $14.58-$14.78 range.
The stock was buzzing on Stocktwits, doubling ahead of earnings, but revenue failed to beat high expectations. Same-store sales fell 4% in the Americas segment, and CEO Calvin McDonald said LULU was disappointed with its domestic business.
Docusign $DOCU ( ▲ 0.45% ) climbed after its report, up 7%. Earnings beat estimates, $800M in revenue looked great, and CEO Allan Thygesen said AI tools for the electronic signature company were helping the bottom line.
“Q2 was an outstanding quarter, with AI innovation launches and recent go-to-market changes leading to strong performance,” Thugesen said. “Q2 business results outperformed, leading to one of Docusign’s highest growth and profitability quarters in recent years.”
SPONSORED
How You Can Invest in the “Forbidden” Crypto
Some market openings are so rare, they can redefine early movers’ portfolios. This is one of them.
For years, a high-value global network has grown to hundreds of billions in scale, used daily by millions, and designed with a scarcity model that steadily reduces supply. Most Americans couldn’t participate — until now.
A small, debt-free NASDAQ-listed company has created a compliant, fully transparent vehicle to bridge the gap. You can now gain exposure through the same brokerage account you already use — with none of the technical barriers or offshore risks that kept most investors out.
Backed by major institutional players and targeting one of the largest U.S. holdings in this scarce asset, the company is built to move quickly as demand rises.
*3rd Party Ad. Not an offer or recommendation by Stocktwits. See disclosure here.
MACRO NEWS
All Eyes Turn Toward Slowing Labor Market 🖇️
Job addition numbers for the U.S. economy are coming on Friday, and the Street awaits what it is betting to be a bad one. The data might continue with August’s downward revisions that showed a weakening of the market.
CNBC reported that economists expect 75,000 payroll additions in August, around the same as last month’s, and a climbing unemployment rate. Thursday’s data from U.S. Jobless Claims showed a slowing market. Claims rose by 8,000 to 237,000 for the week ended August 30, marking the highest level since June.
Though a slowing labor market is the main reason bets are predicting a nearly sure chance of a rate cut this month, it is not that simple. Friday’s numbers will be the first report and revision since the firing of the previous head of the BLS, Erika McEntarfer.
August’s report cut past job additions by more than 250k in the previous two months. Trump said the numbers were outright fabricated and that past numbers from the Biden appointee helped his political opponents, who ended up losing the election.
The question now is, if the numbers on Friday are crap, who will the President blame? The other question is, if he wants rates lowered so badly, doesn’t a troubled labor market make a cut easier? What other reason, with rising tariff inflation, is there to cut rates?
Markets Are Not Rattled, Not Yet
All this D.C. drama comes as Trump is clearing house from the monetary policy setters and economic fact checkers, an eye-opening change of pace. Trump asked the SCOTUS to let him fire the FTC commissioner on Thursday, asking for what will become court precedent to fire anyone for cause, without needing to explain why to Congress. It would help in the struggle to remove Fed chair Lisa Cook to help round out a Trump-picked majority of the Fed decision makers.
Cook is facing potential removal and is currently under investigation for mortgage fraud. Politico reported Thursday that members of Trump’s cabinet allegedly did the same thing with their primary residence filing. 🤫
Still, in the face of this, equities are not worried quite yet. If job numbers are truly negative, as some economists like Luke Tilley at Wilmington Trust warn is a reality likely to come soon, stocks will face recession fear dips.
Former Fed Vice Chair Lael Brainard told Bloomberg that the fear isn’t there yet, and markets have been known to react slowly to major policy changes. The question is when will markets react, and how over dramatic will the reaction be.
She pointed to the 1970s, when she claimed the Fed was not acting independently. When the Fed is following political goals, market forces drive interest rates up, and treasury yields higher. She expects this to happen again if Fed independence is called into question. That is the opposite of what Trump aims to do. 🏚️
POPS & DROPS
Top Stocktwits News Stories 🗞️
Tesla saw UK vehicle registrations rise 7.6% YoY in August to 3,243 units, lifting its market share to 3.9% and pushing shares 1% higher in premarket trade.
Sanofi fell 9% after its eczema drug Amlitelimab met trial goals but disappointed analysts with weaker efficacy than Dupixent, despite a favorable safety profile and 12-week dosing.
Giorgio Armani passed away at 91, with the brand confirming he worked tirelessly until his final days and remained “indefatigable to the end.”
DraftKings CEO Jason Robins said the company is seeing record-breaking momentum ahead of the NFL season, with customer acquisition second only to the Super Bowl and no signs of slowdown.
Agios Pharma dropped 11% after the FDA extended its Pyrukynd review deadline to December, but BofA maintained a Buy rating, citing strong trial data and reaffirmed it as a top pick.
Gap rose 6% after announcing a phased beauty rollout at 150 Old Navy stores, aiming to tap into the $100B U.S. personal care market with curated products and shop-in-shop formats.
American Eagle surged 37% after Sydney Sweeney’s viral “Great Jeans” ad and Travis Kelce campaign drove a boost in sales.
Figma plunged 20% following its first post-IPO earnings on Wednesday, as CEO Dylan Field’s comments on aggressive AI investment unsettled investors despite record Q2 revenue and strong guidance.
Don’t miss a story! Follow @StocktwitsNews for a live feed in real time. ✍️
STOCKTWITS COMMUNITY EVENTS
Your Chance To Attend Stocktoberfest For Free! ✈️
Ten years ago, Stocktwits Co-Founder Howard Lindzon flew one lucky community member to Coronado for Stocktoberfest 2015. That person was your Editor-in-Chief, Tom Bruni. Attending Stocktoberfest changed the course of his career, and now it’s your chance to experience the same power of community!
We’re covering airfare, hotel, and ticket for one Stocktwits community member to join us in Coronado, Oct 20-22. Make the case why YOU should be there in the post comments, OR submit a short video here. 🗳️
Submissions are open until September 18, at 12 pm ET. We’ll select the top 4 pitches, and the community will vote on the winner! Full T&Cs here. 📝
Want to secure a spot? Grab your ticket now before they sell out! 🎫
WHAT’S ON DECK
Tomorrow’s Top Things 📋
Economic data: Unemployment Rate (8:30 AM)📊
After-Market Earnings: Children’s Place ($PLCE) 🌕️
P.S. You can listen to all of these earnings calls and more straight from the Stocktwits app or website. You’ll find them on the calendar page and individual symbol pages once they’re set to begin! We’ll see you there. 👍
Links That Don’t Suck 🌐
🏠️ Senator introduces new bill to eliminate taxes on Social Security benefits
🤖 RFK Jr. casts doubts on vaccines, clashes with Democrats over Covid shot access
📺️ Boeing hires replacement workers as defense unit strike enters second month
*3rd Party Ad. Not an offer or recommendation by Stocktwits. See disclosure here.
Get In Touch 📬
Follow our social channels for great, real-time content on Stocktwits and Twitter. And check out our YouTube channel for in-depth video content! 📲
Help us deliver the best content possible by completing this brief survey. 📝
Want to see some change? Email me, Kevin Travers, your feedback; follow me on Stocktwits. What did I miss? What do you want to see? I’d love to hear from you. 📧
Want to sponsor this newsletter and reach hundreds of thousands of passionate investors and traders? Reach us here.
Terms & Conditions 📝
Securities Disclaimer: STOCKTWITS IS NOT A TAX ADVISOR, BROKER, FINANCIAL ADVISOR OR INVESTMENT ADVISOR. THE SERVICE IS NOT INTENDED TO PROVIDE TAX, LEGAL, FINANCIAL OR INVESTMENT ADVICE, AND NOTHING ON THE SERVICE SHOULD BE CONSTRUED AS AN OFFER TO SELL, A SOLICITATION OF AN OFFER TO BUY, OR A RECOMMENDATION FOR ANY SECURITY. Trading in such securities can result in immediate and substantial losses of the capital invested. You should only invest risk capital, and not capital required for other purposes. You alone are solely responsible for determining whether any investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should also consult an attorney or tax professional regarding your specific legal or tax situation. The Content is to be used for informational and entertainment purposes only and the Service does not provide investment advice for any individual. Stocktwits, its affiliates and partners specifically disclaim any and all liability or loss arising out of any action taken in reliance on Content, including but not limited to market value or other loss on the sale or purchase of any company, property, product, service, security, instrument, or any other matter. You understand that an investment in any security is subject to a number of risks, and that discussions of any security published on the Service will not contain a list or description of relevant risk factors. In addition, please note that some of the stocks about which Content is published on the Service have a low market capitalization and/or insufficient public float. Such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information. Read the full terms & conditions here. 🔍
Author Disclosure: The author of this newsletter does not hold positions in any of the securities or assets mentioned. 📋
