Market Wrap

Market Wrap: Big tech stocks soar, while US jobs plummet amid Delta variant

Annie Charalambous, Friday, 3 September 2021

Estimated reading time: 6 minutes

ETX Capital Market Wrap

Three of the FAANG giants break all-time highs, and the Delta variant greatly impacts new jobs in August's nonfarm report

Taking a bite out of Apple's winning streak

It's been an eventful week for big tech, as three of the five trillion-dollar behemoths broke new all-time highs throughout the week. Apple, Google (under parent company Alphabet), and Facebook shares all soared this week, hitting record intraday and closing highs between Wednesday and Thursday.

In a note published at Apple 3.0 last week, Toni Sacconaghi, analyst at Bernstein, estimates that Google's paying Apple in the realm of $15 billion to remain the default search engine on both the Safari browser and in Spotlight searches across its devices. If accurate, that would be a significant boost from the ~$10 billion the company paid in 2020, and a 400% increase since 2017.

Sacconaghi added that Google was likely keeping the amount high to prevent Microsoft from being able to swoop in and outbid them. That's not to say Microsoft couldn't if they wanted to – the company is sitting comfortably between Apple and Google in the market cap ranking, currently at ~$2.2 trillion after closing at a new all-time high* itself just last week.

Apple's subsequent increase is attributed to the deal, which saw AAPL shares climb, settling at a high of $153.65 by Thursday's close, after hitting a record $154.98 during the day's session. GOOG broke $2,936 on Wednesday, closing at an all-time high of $2,916, while FB surpassed $384 in the same session, closing at its record high of $382.

Year-to-date, Apple is up almost 19% while Facebook has gained 39.5% and Google is up 66%.

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*MSFT reached an all-time high of $305.84 (intraday) on August 20th, and its closing high of $304.65 on August 23rd according to Historical Data taken from Yahoo Finance

Zero jobs added in leisure and hospitality sector over August

It wouldn't be the first week of the month without the US nonfarm payroll jobs report, showing us a disappointing 235k new jobs added over August (compared to the 750k forecast, and the 2021 monthly average of 586k), despite an increase of 1.1 million the previous month.

The decline is strongly attributed to the spread of the Delta variant – the most contagious strain of COVID19, according to Yale Medicine. While professional and business services made up a sizeable chunk of the figure, at 74,000 new jobs, Retail was the hardest hit with a loss of 29,000 jobs.

Retail trade employment is down by almost 300,000 jobs since the pandemic (February 2020).

Leisure and Hospitality remained unchanged, while other major sectors including Construction and Health Case showed very little change this month. The unemployment rate fell slightly, as expected, but Wall Street felt the lacklustre data, with US indices in the red at Friday's market open.

Movers and shakers

🔼 Delivery Hero (ETH:DHER) gained as much as 13% between Monday and its Thursday intraday high after raising $1.5 billion in Convertible Bonds. Read more on Bloomberg

🔽 Royal Caribbean Cruises (RCL) saw its share price dip as much as 3% since Monday's open after the company CEO shared updates on its post-pandemic service. See the full blog post here.

Stock of the week 💲

Google reigns supreme this week as our top stock pick after surpassing $2,936 on Wednesday, and gaining over 60% so far this year. Despite being one of the largest companies in the world and used by millions of people across the world each day, the company was dismissed by analysts when it was first listed on the NASDAQ for not being as ‘diverse' a business as its biggest rival, Yahoo!.

Read that original article on CNN

Mark your calendars – times below are in GMT

Monday, September 6th is Labor Day in the United States and Canada, however, Construction PMI data out of the UK is expected at 8:30.

On Tuesday, the day kicks off with the RBA Rate Decision and Statement at 4:30 in the morning, followed by Germany's ZEW at 9:00 and finally, Japan's Q2 GDP data (QoQ) at 23:50.

For Wednesday, we expect the US JOLTs Job Openings data for July at 14:00, with a forecast of 9.281 million from the previous month's 10.073 million. At the same time, we have Canadian data, coming in the Ivey PMI (August) and the BoC's latest Interest Rate Decision.

Thursday, the ECB Interest Rate Decision is due at 11:45, as well as the Deposit Facility Rate – those being the only high-impact events for the day.

Finally, we end the week with a couple of notable events, starting bright and early Friday morning with UK Manufacturing Production data at 6:00, followed later by US PPI data for August at 12:30.

 

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