Don’s Notebook August 3, 2018

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Key Notes:

Strong payroll growth combined with unexpected pressure in wages (average hourly earnings) could raise expectations for higher interest rates to come.

  • This morning’s announcement of an 157,000 rise in nonfarm payrolls for July is at the low end of what analysts expected but is still healthy growth that is strong enough to absorb new entrants into the labor market.

There were two positive revisions as well showing two very strong months for job growth:

  • The June report revised NFPs to 248,000
  • May was revised higher to 268,000

AAPL Notes:

Investors are looking at whether Apple can hold on to its $1 trillion stock market value, after being the first publicly traded U.S. company to eclipse that milestone. Since reporting strong earnings late Tuesday, Apple shares gained nearly 9 percent.

Overnight Trading Notes:

  • The MSCI Asia Pacific Index slipped 0.3 percent
  • Japan’s Topix index closed 0.5 percent lower as tariff threats continue to dominate the region’s markets.
  • In Europe, the Stoxx 600 Index was 0.5 percent higher in a broad-based rally amid positive earnings reports.

Various Notes:

  • Take-Two Interactive Shares were soaring about 12 percent in the premarket.
  • Activision Blizzard beat estimates on earnings and revenue. Results were driven by strong sales of its popular Call of Duty video game, but the company warned on forward guidance.
  • Toyota Motor reported a 19 percent jump in profit for its first quarter, to the best level in 2.5 years.
  • Campbell Soup and Kraft Heinz have opened exploratory merger talks, according to the New York Post. Kraft Heinz has not made an offer for Campbell, according to the report.
  • Sonos (SONO) is higher in pre-market trading, after the wireless speaker maker made its Wall Street debut Thursday with a 33 percent jump over its IPO price.
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