The U.S. job market is bracing itself for a potential slowdown with the anticipated addition of only 170,000 jobs in August, marking the smallest monthly increase in employment since January 2021. As investors keenly await the release of this data by the Labor Department today, the job market’s resilience will be put to the test. Forecasts also suggest a steady rise of 4.4% in average hourly earnings from the previous year, with the unemployment rate holding steady at 3.5%.
In contrast, shares of Dell Technologies are experiencing a surge, with a remarkable 9% jump following the announcement of better-than-expected earnings and full-year company guidance. This surge is attributed to the strong demand for PCs and the reduction in component costs due to an ease in part shortages. As Dell’s second-quarter earnings surpass analyst estimates and the projected third-quarter earnings also look promising, it seems the tech giant is navigating the turbulent market waters with aplomb.
August’s Job Growth Slows, Dell Shares Surge, and More Business News
August Experiences Slowest Job Growth Since January 2021
The month of August is predicted to experience a slowdown in job growth, with employers expected to add 170,000 jobs compared to July’s addition of 187,000. This marks the smallest monthly increase in employment growth since January 2021. Despite this, forecasters estimate that average hourly earnings will increase by 4.4% in August from the previous year, mirroring July’s pace, while unemployment is expected to remain at 3.5%.
Dell Shares Soar Following Better-Than-Expected Earnings
Shares in Dell Technologies (DELL) have seen a notable boost, rising almost 9% after the company reported stronger-than-expected earnings and full-year company guidance. This positive outcome is attributed to a robust demand for PCs and improved profitability due to lower component costs, which arose as a result of an easing parts shortage. Dell’s second-quarter earnings came in at $1.74 a share, surpassing the analyst estimates of $1.14. Furthermore, the company projected third-quarter earnings of $1.45 a share, outperforming the analysts’ forecast of $1.37 a share.
Nutanix Sees Sales Surge Thanks to AI and Subscription Model
Cloud computing company Nutanix (NTNX) reported a 28% increase in fourth-quarter revenue, reaching $494.2 million. This exceeds the predicted $475 million, and the company credits the success to its strong subscription model and hybrid multi-cloud product. In addition, Nutanix attributes its forecasted first-quarter sales of between $495 to $505 million, outdoing the analyst forecasts of $487 million, to interest in its artificial intelligence (AI) products. Nutanix shares rose 19% in pre-market trading.
Tesla Unveils Revamped Model 3
Tesla (TSLA) has revealed a revised version of its Model 3, which boasts a longer range and sleeker design. However, this improved model comes with a 12% price increase. Sales of the new model have begun in China, with the electric vehicle manufacturer expecting to commence deliveries in the fourth quarter of the year. Tesla shares experienced a slight dip, dropping 0.3% in the pre-market.
UAW Files Labor Complaints Against GM, Stellantis
The United Auto Workers union has filed unfair labor practice charges with the National Labor Relations Board against General Motors (GM) and Chrysler-parent Stellantis (STLA). The union accuses the automakers of failing to negotiate in good faith ahead of the expiration of the four-year labor agreements on September 14. While Ford (F) has responded to the union’s proposal with a counteroffer, GM and Stellantis have yet to do so.
Takeaways
Today’s business news underscores the dynamic and interconnected nature of our global economy. The slowdown in job growth could potentially impact consumer spending, which in turn could affect businesses like Dell, Nutanix, and Tesla. However, the strong performance of Dell and Nutanix highlights the resilience and adaptability of tech companies in a fluctuating market. Tesla’s price increase may test the elasticity of demand for its products, while labor disputes in the auto industry remind us of the ongoing tension between labor and management in key sectors. As always, investors are advised to keep a close eye on these developments as they unfold.
