Macro Events & News
Equities traded with little conviction for most of the holiday-shortened week. Big tech saw a strong rally after Google and parent company Alphabet (NASDAQ:GOOG) secured a favorable antitrust ruling, though the strength did not extend across the sector. Enterprise software names continued to lag as sentiment remains weighed down by fears that AI could upend the industry. Even a solid earnings report from Salesforce Inc (NYSE:CRM) on Wednesday was not enough to shift the narrative.
On the macro front, PMI data offered mixed signals. Tuesday’s manufacturing report showed another month of contraction, while services later in the week pointed to expansion, leaving little clear direction for investors. Friday brought more definitive news as labor market data surprised to the downside. Prior-month revisions showed fewer jobs added, unemployment ticked higher to 4.3%, and the weaker print raised hopes for a September rate cut.
Markets initially rallied on the prospect of easing, but enthusiasm faded into the close as investors weighed whether rate cuts would be enough to offset the signs of a slowing economy.
The 10-year Treasury yield was marginally lower and closed at 4.07% as was the VIX, down to 15.18.
All the major indexes were were relatively flat for week: the Dow down <1%, the S&P 500 up <1%, and the Nasdaq led moving higher 1%.
Watchlist News
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Adobe Inc (NASDAQ:ADBE) has been range-bound in recent weeks, slipping lower for most of the week before rebounding on Friday. With earnings due next week, a breakout from this range seems likely, though the direction remains uncertain.
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IBM Corporation (NYSE:IBM) regained some ground late in the week following a two-day slide. Shares appear to have established support near $240, though a sustained recovery will likely depend on a more favorable macro backdrop.
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UnitedHealth Group (NYSE:UNH) continues to linger around the $300 price level. The DOJ allegations are serious and remain open but a decision could take a while which could translate into a move higher.
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Workday Inc (NASDAQ:WDAY) finished the week modestly higher and remains in an upward trend. While negative sentiment toward enterprise SaaS persists as a headwind, its relative resilience should offer investors some confidence.
