Dow Jones: Tech selloff pulls stocks lower as investors assess August jobs report

Supermicrocomputers continue to fall

38 minutes ago

Supermicro Computer (SMCI) shares fell on Friday after a JPMorgan analyst downgraded the server maker’s stock due to concerns about a delay in the company’s annual report.

The analysts downgraded Supermicro’s stock to “neutral” from “overweight” and lowered their price target to $500 per share from $950, putting the company in line with other hardware makers that are “setting a lower growth trajectory given uncertainties.”

Supermicro shares recently fell about 6% to about $388. The average Wall Street price target is just over $450, according to Visible Alpha. The company’s shares are still expected to rise about 35% in 2024, but they are down from a high of about $1,200 in March.

The company’s stock price has been on a downward trend recently amid poor performance, and a report released in late August by short seller Hindenburg Research accused the company of “accounting manipulation, inter-sibling self-dealing, and sanctions evasion.”

Supermicro recently delayed the release of its annual report, saying it needed more time to “complete its evaluation of the design and operating effectiveness of its internal control over financial reporting.”

JPMorgan analysts said the delay could affect customer behavior as they seek better pricing from server makers. They also noted that the delay could cause “unrest,” and recommended that new investors “remain on the sidelines” until the uncertainty is resolved.

“Until the company’s regulatory issues are resolved, there is no clear basis for new investors to purchase Supermicro shares,” they wrote.

–Aaron McDaid

Intel reportedly considering selling Mobileye stake

2 hours 53 minutes ago

Shares of Mobileye Global (MBLY) fell sharply on Friday after reports that Intel (INTC) was considering selling part of its stake as part of an effort to improve its financial situation.

Bloomberg, Intel may sell part of its stake in Mobileye through an initial public offering or in a transaction with a third party, said a person familiar with the matter. Intel owns about 88% of Mobileye, according to a recent regulatory filing.

Mobileye, which makes hardware and software for self-driving cars, has struggled as automakers cut production to clear excess inventory after the pandemic. Its shares have plummeted this year, and today’s losses pushed them to a record low.

Intel shares have also been falling, with recent reports that CEO Pat Gelsinger and other executives are considering options that could include selling assets. The stock is trading near its lowest level in more than a decade.

MobilEye shares were down about 7% in recent trading, while Intel shares were down 3%.

–Bill McCall

Berkshire further cuts Bank of America stake

3 hours 8 minutes ago

Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) further reduced its holdings in Bank of America (BAC), selling just over 18.7 million shares this week, according to Securities and Exchange Commission (SEC) filings.

Berkshire has been reducing its stake in Bank of America in recent months after the bank’s better-than-expected profits sent the bank’s shares to a two-year high. Though the bank’s shares are down from a July 16 closing price of $44.13, they’re still up nearly 18% this year.

Berkshire has sold Bank of America shares over the past nine trading sessions since Aug. 26, reducing its holding from just under 950 million at the start of the month to about 864 million shares as of Thursday’s close. The sales give Berkshire a stake of just over 11% of Bank of America’s 7.77 billion shares outstanding, now worth about $34.7 billion.

Bank of America shares were down 2% in recent trading.

–Aaron McDaid

Semiconductor stocks again lead S&P 500 decline

3 hours 48 minutes ago

The sell-off in early trading on Friday was broad-based, but technology stocks were the biggest losers.

The information technology sector recently fell 1.5% due to a selloff in chipmakers.

Nvidia (NVDA), a darling of AI investors, has been particularly volatile since reporting quarterly results last week that fell short of Wall Street’s highest expectations, falling about 4% in recent trading.

Broadcom (AVGO) was the biggest faller on the S&P 500 index on Friday, dropping nearly 10%. Other semiconductor stocks, including Advanced Micro Devices (AMD) and Micron (MU), also fell sharply.

The VanEck Semiconductor ETF (SMH) fell nearly 4%.

Bitcoin trading hits lowest level since early August

6 hours 8 minutes ago

Bitcoin (BTC) fell at the open on Friday, dropping below $56,000 after dropping more than 3% yesterday, as investors prepared for the highly anticipated August jobs report, a key piece in gauging the timing and size of a widely expected interest rate cut by the Federal Reserve.

The rate cut could be a boon for the legacy cryptocurrency, which has fallen about 24 percent since hitting an all-time high on March 14 amid a lack of new catalysts to bolster bullish sentiment.

Bitcoin has been fluctuating within a channel-like pattern since hitting its all-time high in March of this year, with prices recently moving towards the pattern’s lower trendline.

Investors should keep a close eye on the key support levels on Bitcoin’s charts at $53,000 and $47,000, as well as the key resistance levels at $65,000 and $68,500.

Read the full technical analysis here.

-Timothy Smith

Broadcom’s price level in focus as stock prices plummet

6 hours 16 minutes ago

Shares of semiconductor maker Broadcom (AVGO) fell more than 7% in premarket trading after the company reported better-than-expected third-quarter results late Thursday but gave a weak revenue outlook for the current quarter.

Broadcom shares have been trading inside a symmetrical triangle on declining volume since mid-June, and the stock is sending out an ominous signal by testing the pattern’s lower trendline ahead of the chipmaker’s quarterly report. The stock could see a big breakdown out of the triangle on Friday.

Investors should watch the key low price levels on Broadcom’s chart: $141, $120, $104 and $91.

Read the full technical analysis here.

–Timothy Smith

How will the employment report affect interest rate cut expectations?

6 hours 39 minutes ago

Ahead of the release of August’s employment report this morning, one of the big questions is how the data will affect the Federal Reserve’s thinking on cutting interest rates.

Fed Chairman Jerome Powell has signaled a rate cut could come as early as the policy committee’s mid-September meeting, but has said upcoming data will determine the pace and extent of any easing.

Ahead of Friday’s data release, market participants were pricing in a 39% chance that the Fed would cut the influential federal funds rate by half a percentage point at its Sept. 18 meeting, according to CME Group’s FedWatch tool, which uses data from federal funds futures contracts to forecast interest rate movements. That’s up from the 30% probability priced in a week ago but down from about 70% a month ago, when markets plunged after the weaker-than-expected July jobs report.

Expectations for a half-point cut could grow if August job gains fall well short of the 161,000 economists were expecting or if the unemployment rate rises above the consensus forecast of 4.2 percent.

Looking further ahead, market participants see an 85% chance that the federal funds rate will be cut by one percentage point to a range of 4.25% to 4.50% by the end of 2024. This means the Fed will have to cut rates by at least a half-point at one of its three remaining scheduled meetings.

Major stock index futures fall ahead of employment report

7 hours 23 minutes ago

Futures tracking the Dow Jones Industrial Average fell 0.4%.

S&P 500 futures fell 0.7%.

Nasdaq 100 futures fell 1.2%.