Volatility continues in September following a perplexing August for investors.
The tech sector saw Bitcoin and Ether prices stagnate this week due to diminishing investor enthusiasm, while Broadcom’s latest quarterly report fueled caution among market participants.
Tesla also caught attention this week by hinting at the impending release of its full self-driving technology in specific markets, alongside Intel’s potential sale of its design business.
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1. Tech Sector Kicks Off September With a Bang
The US markets opened the week with their most substantial daily percentage declines since the August 5 market drop.
On Tuesday (September 3), the Nasdaq Composite closed 2.85 percent lower, the S&P 500 lost 1.83 percent, and the Russell 2000 dropped by 2.77 percent.
These declines were influenced by new US manufacturing data for August. The S&P Global US Manufacturing PMI fell to 47.9 in August, down from 49.6 in July for the second consecutive month. Additionally, the ISM Manufacturing PMI increased to 47.2 percent, a 0.4 percentage point rise from July’s 46.8 percent.
In Canada, the S&P Global Canada Manufacturing PMI data impacted the S&P/TSX Composite Index, signaling reduced output and demand, along with a slight reduction in employment numbers in the country.
Wednesday (September 4) witnessed the Bank of Canada lowering interest rates for the third time during the summer. Meanwhile, in the US, the Department of Labor’s JOLTS report highlighted job openings hitting a three-and-a-half-year low in July, decreasing by 1.1 million compared to the previous year. Although major indexes maintained stability, the Nasdaq Composite faced a decline at the opening bell due to a significant sell-off wiping out nearly 9.5 percent of NVIDIA’s value within 24 hours.
The sell-off occurred subsequent to reports by Bloomberg indicating that the US Department of Justice had subpoenaed the company following an ongoing antitrust inquiry — a claim later refuted by NVIDIA.
Market Insights and Analysis: September 2024
Thursday’s economic data readings painted a mixed picture for the US and Canada. While the US services sector showed signs of resilience, the labor market cooled with lower-than-expected job additions. In Canada, the Services PMI improved slightly; however, contraction persisted, hinting at economic challenges on both fronts.
Continuing Cryptocurrency Turbulence
The crypto market turmoil that began in early August persisted into September, influenced by diverse factors like regulatory uncertainty and shifting investor sentiment. Both Bitcoin and Ether experienced declines, with prices stagnating due to various market dynamics, including reduced demand and mining difficulties.
Bitcoin and Ether faced sharp corrections and lackluster performance, especially with Ether enduring a notable decline tied to diminishing Ethereum mainnet activity. The market exhibited sporadic surges but failed to sustain upward momentum, signaling caution among investors and a prevailing downward trend.
Broadcom’s Quarterly Results Disappoint
Analysis of Broadcom’s third fiscal quarter for the year revealed a 47 percent increase in revenue compared to the previous year, slightly exceeding expectations at US$13.07 billion. However, the tech giant’s results fell short of anticipated outcomes, hinting at potential challenges within the sector that could impact future performance.
Riding the Financial Rollercoaster: Tech Giants Broadcom, Tesla, and Intel in Focus
1. Broadcom’s Earnings Shake-up
Broadcom shook the financial ground this week with earnings that both delighted and dismayed. Surpassing analyst expectations, the tech juggernaut showcased its strength by delivering adjusted earnings per share that outpaced estimates. However, the company’s future revenue guidance left experts wanting more. Despite a substantial revenue jump, Broadcom faced declines in critical sectors that cast shadows on their stock value. The subsequent 6.52% drop in share price sent ripples through the market, demonstrating the unforgiving nature of the tech sector.
2. Tesla’s Full Self-Driving Ambitions
Tesla, led by the enigmatic Elon Musk, grabbed headlines with its ambitious move to expand full self-driving technology to Europe and China. Despite setbacks in the US, Tesla’s stock saw a significant boost, breathing new life into a company that had seen its market value dwindle. Promising developments such as eye-tracking and unique AI features fueled investor excitement, leading to a roller-coaster ride in share prices that culminated in a modest gain by week’s end.
3. Qualcomm Eyeing Intel
Qualcomm’s reported interest in acquiring part of Intel’s design business raised eyebrows in the tech world. Intel, a recipient of government funding, had been making bold strides in AI innovation. However, recent setbacks, including failed chip testing, have left the company vulnerable. With its position in the Dow Jones Industrial Average under threat and dwindling market value, Intel faces a pivotal moment. The upcoming presentation to investors by CEO Pat Gelsinger signifies a crucial juncture for the company’s future.