JOB GROWTH STUMBLED
During July, the U.S. job market experienced a slowdown as nonfarm payrolls only increased by 114,000, falling below expectations and marking a decline from the previous month. This resulted in the unemployment rate rising to 4.3%, its highest level since October 2021. Additionally, average hourly earnings saw a modest increase of 0.2%, which was lower than predicted. Various sectors such as health care, construction, government, and transportation saw job gains, while the information services sector reported losses. It is important highlighting that despite initial optimism following hints of a potential rate cut by the Federal Reserve, recent economic data, including the latest initial jobless claims and the ISM manufacturing reports, have raised concerns about the economy’s trajectory. The rise in the unemployment rate has triggered discussions about a potential recession, and uncertainty looms over how the Fed will respond.
BOUNCE BACK
Despite the current global market volatility, Bitcoin (BTC) has managed to recover from the significant losses it saw yesterday as it rebounded from a low of $62,500 to nearly $64,500, as of 8:00 AM CST. Nevertheless, it is worth noting that key support levels at $63,000 and $61,000 are being closely watched as August is known historically as a challenging month for Bitcoin. Furthermore, along Bitcoin, Ether also managed to bounced back this morning, with it value trading at around $3,155. Moreover, in regards of other major cryptocurrencies like XRP, and Solana’s SOL they also experienced declines yesterday, and continue the downward trend, reflecting a 2.44% drop in the broader CoinDesk 20 Index.
REVENUE MISS
Amazon reported weaker-than-expected revenue for the second quarter and issued a disappointing forecast, causing shares to drop by 6%. The company earned $1.26 per share, missing estimates of $1.03, and revenue of $147.98 billion fell short of the expected $148.56 billion. Despite Amazon Web Services exceeding revenue expectations and advertising revenue growing, the online retail giant struggled with sluggish growth in its core retail business. With intense competition from discount sites like Temu and Shein, sales in the online stores segment only grew by 5% year over year. Amazon’s finance chief mentioned that the revenue miss was due to consumers opting for cheaper products, resulting in lower average selling prices. Looking ahead, Amazon plans to launch a discount store featuring items priced below $20, aiming to attract buyers looking for affordable options. In the cloud sector, AWS saw a 19% growth, albeit slower compared to competitors like Microsoft and Google. Overall, Amazon’s net income doubled, but the company attributed some weakness in guidance to consumer distractions from major events like the Olympics.
FINANCIAL STRUGGLES
Intel’s recent second-quarter earnings report has left investors disappointed, with the chip giant falling short of revenue and earnings projections. As a result, Intel’s shares dropped by more than 20%. Intel responded with a drastic $10 billion cost-cutting initiative, which includes cutting 15% of its workforce and halting dividend payments. The company’s third-quarter revenue forecast also failed to meet analysts’ expectations, resulting in a significant drop in share prices. This setback is a part of Intel’s ongoing efforts to recapture lost market share in the face of stiff competition from rivals like AMD and Nvidia. Nevertheless, despite a challenging performance in the Data Center and AI segment, it is worth remarking that Intel remains committed to expanding its AI and foundry businesses. Moreover, although competition in the PC segment is heating up, with Qualcomm emerging as a threat with its latest products, Intel is gearing up to launch new processors to stay competitive and expand its foundry services.
INTERNATIONAL NEWS
Global stock markets are experiencing turmoil as a result of various economic events. The Bank of Japan’s recent rate hike and the Bank of England’s rate cut have intensified sell-offs, leading to sharp declines in European and Asian markets. Tech giant Intel’s disappointing earnings report, which fell short of projections, has rattled investors and prompted the company to implement a $10 billion cost-cutting initiative. This initiative includes significant workforce reductions and the suspension of dividend payments. The competition in the semiconductor industry is fierce, with Intel facing challenges from competitors like AMD and Nvidia. In response to these challenges, Intel is focusing on expanding its AI and foundry businesses and launching new processors to stay ahead. Following the BOJ’s tightening measures, the Japanese stock markets saw steep declines, with the Nikkei 225 and Topix both experiencing their worst days in years. The strengthening of the Japanese yen as a result of higher interest rates has raised concerns about Japan’s exports and triggered profit-taking in equities.
