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Markets are experiencing pressure after the release of unemployment data this morning. This follows a week of price action where intraday price action has been particularly unfavorable for bulls with several major intraday moves to the downside. The specific numbers on the unemployment report were mixed (more context on that below), the dollar relatively unchanged on the report. That has not stopped the selling pressure today with defensives outperforming and growth stocks noticeably underperforming in a rocky market.

The markets have been dancing with a recession/growth scare narrative for several weeks now and today’s report (and this week’s data) does not refute nor confirm that narrative. We will discuss this narrative in depth in the Tackle Trading Newsletter today and in the Trading Justice podcast over the weekend. Technical analysis is going to be our best guide in the coming weeks on the markets next move and we will continue to draw upon our expert team of technicians to provide insight in the Tackle Today daily video and in our pro programming daily.

Stocks in the News

• Broadcom (AVGO) reported fiscal third-quarter earnings of $1.24 per share on revenue of $13.07 billion, surpassing expectations of $1.20 per share on $12.90 billion in revenue. However, the company’s Q4 revenue guidance of $14 billion fell slightly below the consensus of $14.02 billion. Despite the earnings and revenue beats, Broadcom shares dropped 7% due to the lower-than-expected revenue outlook.
• UiPath (PATH) posted second-quarter earnings of $0.04 per share, beating the expected $0.03 per share, with revenue of $316.25 million, also above the anticipated $302.92 million. Revenue grew by 10.07% year-over-year. The company raised its fiscal year 2024 revenue guidance to a range of $1.42 billion to $1.425 billion, up from the previous range of $1.405 billion to $1.41 billion, reflecting optimism for future growth.
• Super Micro Computer (SMCI) saw its stock slip 2.5% after JPMorgan downgraded the AI server producer to neutral from overweight. The bank slashed its price target for the stock by $450 to $500, citing uncertainty surrounding the company’s ability to regain compliance as a key reason for holding off on buying shares.

Economic Reports

While the price action might be dramatic today, the unemployment report was a mixed report. The dollar is actually slightly up on a report that showed a slight miss on expectations. To be frank, there was some good and bad in the unemployment report today.

• Jobs Added – small miss of 142k versus expectations of 164k and up from July
• Unemployment Rate – Fell from 4.3% to 4.2% which was in line with expectations. This untriggered the “Sahm’s Rule” which received so much press last month.
• Downward revisions – June was revised down from 179,000 to 118,000 jobs added andJuly was revised down from 114,000 to 89,000.

This was not a terrible report and the odds of a 50bps cut decreased noticeably today to under 25% in the Fed meeting coming up in a couple of weeks. We will do more in depth analysis and discuss Fed speak today in the Tackle Trading Newsletter released later today.

Next 24 Hours

There is no economic data scheduled to be released before the market opens on Monday. We will be releasing the Tackle Trading Newsletter later today fully analyzing a big week in the market, all the major storylines, and what we are looking forward to in the coming weeks.

Have a fantastic weekend everyone!

S&P 500 (/ES)

Risk assets not having a good time of it as we head into the week. The S&P 500 is currently battling the 20-weekly. Key support levels such as the 20-weekly should be monitored closely in the coming weeks for clues on the market’s next move.