Stock Market Weekend Report - 4|7|24

 By Shesa Nayak

How did the U.S. Stock Index do?

The Dow Jones Industrial Average was down 2.3%, the S&P 500 index fell 0.95% and the Nasdaq composite declined 0.8% despite some bounce back on Friday. 


Job growth: During March U.S. continued it robust jobs growth. The payroll jumped by 303,000 vs. 200K expected. The unemployment rate dropped to 3.8% from 3.9%. The illegal immigrants seem to be fueling the job growth in the U.S!! On Wednesday, ADP reported that Private sector employment in the US rose by 184,000 in March vs. 155,000 expected. Labor market still looks robust.

Federal Reserve Updates: On Wednesday, Federal Reserve Chairman Jerome Powell said that it will take a while for policymakers to evaluate the current state of inflation, keeping the timing of potential interest rate cuts uncertain. Possibly, the interest rate cut may not happen before June/July or may get delayed further in my view. 

Question on Interest Rate Cuts? All the pointers viz. Oil price, ADP report, Fed speakers are indicating that rate cut may be delayed and there may not be three cuts this year as indicated by J Powell. We will watch how it goes..I do not envisage any rate cuts before June/July.

Tesla (TSLA) announced last Tuesday that it delivered 386,810 vehicles in Q1 while it produced 433,371 vehicles. The company delivered a combined 369,783 Model 3 and Model Y. It was much less than WS expected. I don’t see any positive sign in the near term. But long term I still believe in this stock. On Friday, Tesla stock got hit on a Reuter report that it has scrapped its plan to manufacture $25K car. However, Musk denied the report saying it’s false news..On Friday, in the after hour, Elon Musk tweeted saying “Tesla RoboTaxi unveil on 8/8”. The stock was up 5.5%. We will how it goes tomorrow..

Intel (INTC): Yesterday during an investors presentation the CEO said operating losses for the foundry business will break even on an operating basis by about 2027. The manufacturing business posted a $7 billion operating loss for 2023. It was down 8.2% own that day and it keep going down. The stock seems to be dead in the short term, so it makes sense to trim. I have already trimmed my position, unless recover I may sell it. It's a dead stock in the hot semiconductor sector. 

Amazon (AMZN) is laying off hundreds of employees in its cloud computing division. Mostly layoffs are expected in its physical stores technology and sales and marketing units.

Critical Economic Reports this week
Wednesday, 4/10:  Consumer Price Index (CPI) for MARCH. This may be market moving. 
Wednesday, 4/10:  FED minutes from March FOMC meeting. This may be market moving. 
THU, 4/11:   Producers Price Index (PPI). This may be market moving. 
FRI, 4/12:    Consumer Sentiment 

In addition, there are a number of Fed Speaking this week. One can predict what they will say “Economy is strong , we need to see more evidence that inflation is coming down before cutting rates”.

Earnings this week: The Q1 earnings season kicks-off this week. Many Financial will start report earnings this week. Here is a list:

JPM, Citi, GS, BAC, WFC, BlackRock. Next week tech earnings will kick-off with Netflix.

Stocks to watch this week: TSLA, NVDA, MSFT, META, NFLX, AVGO, SMCI.

Have a good rest of the weekend!

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