The major U.S. equity market indexes are flat to lower(Kara Greenberg & Mack Wilowski)

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2022-09-01 11:56:19, 回應(0), 人氣(345)

The major U.S. equity market indexes are flat to lower

By Kara Greenberg, Editor
& Mack Wilowski, Associate Editor

The major U.S. equity market indexes are flat to lower in the final trading day of August, after three consecutive days of declines driven by expectations of more aggressive rate hikes by the Federal Reserve. The Dow, S&P 500, and Nasdaq are all relatively flat, with the Dow and S&P 500 on track to fall 3% for the month, while the Nasdaq is set to lose 4%.

Shares of Snap Inc. (SNAP) are rising over 9% after the parent of the popular social media platform announced a restructuring plan. The company said it is cutting 20% of its workforce and scrapping several unprofitable projects, including its Snap Originals show lineup and Pixy photo-taking drone. Bed Bath & Beyond (BBBY) also announced it is laying off 20% of its workforce and closing a number of its stores, sending shares plunging over 22%.

Payroll services provider ADP released its National Employment Report tracking private sector job growth, showing private businesses added a net 132,000 jobs in August (more below).

Crude oil prices are falling, with the price of West Texas Intermediate (WTI) trading just below $92 per barrel. WTI crude is on track to fall over 6% in August, amid concerns about global recession risks, renewed COVID-19 lockdowns in China, and policy tightening by the world's central banks.

Prices of major cryptocurrencies are gaining slightly, with the price of Bitcoin up 0.7% and trading just above $20,100. The price of Ether is down marginally, trading at $1,550.

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2/ CHART OF THE DAY

Private Sector Payrolls Growth Slows in August

ADP

Payroll services provider ADP released its latest National Employment Report showing private employers added 132,000 jobs in August, down from 268,000 in July and less than half the number economists expected. The figure marks the smallest gain in private sector payrolls since a decline at the start of 2021.

By sector, the strongest gains were recorded in the leisure and hospitality sector, which added a net 96,000 jobs. Gains were also strong within the trade, transportation, and utilities sector with a gain of 53,000. Construction followed with 21,000 positions added. By contrast, the financial activities, professional and business services, and education and health services sectors posted losses.

Slowing Pace of Job Growth

Job gains have decelerated markedly in recent months, amid an already-tight labor market and a series of aggressive interest rate hikes by the Federal Reserve, raising pressure on employers. Economists have suggested the pace of hiring is likely to decelerate further in coming months.

ADP Chief Economist Nela Richardson suggested jobs could be "at an inflection point, from supercharged job gains to something more normal."

CFOs recently surveyed by Deloitte say they are cutting their growth expectations for wages and hiring, according to Deloitte’s Q3 2022 CFO Signals report released earlier this week. Expectations for hiring growth fell to 2.6%, from 5.3% in the second quarter of 2022—the first significant drop since the second quarter of 2020.

3/ STOCK OF THE DAY

Bed Bath & Beyond (BBBY)

YCharts

Shares of Bed Bath & Beyond (BBBY) are sinking over 22% after the retailer announced it is laying off up to one-fifth of its workforce and closing 150 stores. The company also announced it is eliminating its Chief Operating Officer (COO) and Chief Stores Officer roles.

The decisions come as part of a broader restructuring effort for Bed Bath & Beyond, aimed at reducing costs and increasing profitability. The retailer has struggled in recent years, impacted heavily by the COVID-19 pandemic, supply chain disruptions, and declining consumer spending driven by rising inflation. Recent turnaround efforts have faltered as an attempt to sell more private-label goods proved unsuccessful. In June, the company fired its CEO, Mark Tritton, after reporting a 25% decline in first-quarter sales.

A Key Investor Departs

Adding to the retailer’s woes, activist investor Ryan Cohen announced in mid-August he had sold all his shares in Bed Bath & Beyond, and the company’s stock price plummeted 40% on the news. Cohen had purchased over 7 million shares of the company earlier this year, spearheading a restructuring effort and leading to a surge in retail investor interest. However, Cohen and his venture capital (VC) firm, RC Ventures, eventually exited their stake.