Daily Newsletter | August 30, 2023

TLDR

MARKET RECAP → Stocks closed higher again on Wednesday in what can be summed up as another “bad news is good news” day. What happened? ADP reported slowing US job growth in August.

HP’s Q3 EARNINGS FALL SHORT → Hewlett Packard’s (HPQ) earnings were strong on margins but weak on printers and Wall Street’s love.

ADP REPORTS SLOWING US JOB GROWTH → ADP reported the U.S. added just 177K jobs in August, breathing further life into stocks on hopes of lower rates to come. The “official” numbers are out on Friday, stay tuned for a potential plot twist.

BOE’S BOND STRATEGY → Bigger losses, but economy’s robustness might just cover the blushes. ?‍♂️

Sean Horgan

Head of Investor Relations @ MoneyLion

$shorgan

Share the love, share the newsletter!

View online

Market%20Snapshot%20%28dynamic%20data%29 22

Today’s S&P 500 Heatmap

Screen%20Shot%202023 08 30%20at%204.20.57%20PM

Source: finviz.com

Today’s Top News

HP HICCUP

? Hewlett Packard’s (HPQ) shares took an 8% nosedive after Q3 earnings revealed a revenue shortfall, hitting $13.2 billion instead of the expected $13.37 billion.

?️ While PC revenues are predicted to bounce back, analysts are skeptical about the company’s printing sector’s future growth.

? Deutsche Bank cut HP’s price target but admired its ability to maintain good operating margins amidst a demanding environment.

Source: shutterstock

ADP REPORTS SLOWING US JOB GROWTH

? Job creation in the U.S. took a nosedive in August, with only 177,000 jobs added, falling short of the expected 200,000.

? ADP’s report hinted that the robust U.S. economy might be feeling the heat from rising interest rates. Despite the slowdown, the Federal Reserve cranked up rates to a 22-year high in July, hinting at more hikes on the horizon.

? The ADP report has traditionally been seen as a signal of the what the official Department of Labor’s monthly jobs report will show, but a change in methodology has made it a less reliable indicator. The “real” August jobs number is set to be released Friday, which might cause some surprises if it’s not consistent with today’s ADP number.

Source: shutterstock

BOE BLOWOUT

? The Bank of England’s bond-buyback strategy faced ballooning costs, with losses “materially higher” than earlier predictions.

? U.K. Treasury’s safety net for the Bank of £150 billion ($189 billion) wasn’t enough. The real setback? Approximately £23 billion more than expected over two fiscal years.

? Inflation’s on the rise and so are unexpected costs, yet a robust economy might mask this looming financial hiccup. At least, for now.