🍨 Daily Scoop: No more jobs, please

By Hoda Mehr Mon, Jul 8, 2019

On Friday, while most people were still recovering from the 4th of July celebrations, the stock market had a different agenda.

First up was a better than expected jobs creation report. Then, it came the stock market decline in response to the good news. The S&P 500 and the Dow lost value, and the news and financial media did not like what was happening in the market.

Additionally, in a quick chat with the reporters, president Trump reinforced his message to the Feds to cut the interest rate.

What does it mean for investors?

It’s a counterintuitive situation. Investors appreciate a strong economy. But, the better than expected jobs creation report deflated their hope for an interest rate cut in the coming weeks. Since the stock market has been on its most prolonged recovery ever in history, people are either secretly hoping for a crash to get a chance to invest at lower prices, or looking for another policy boost to enjoy higher than average returns.

• U.S. markets: Both the S&P 500 and the Dow indices closed Friday lower than where they started. However, the Nasdaq experienced a slightly better day and inched up higher. Scroll to the Overall Market section to read more about what happened. 
• Cryptocurrency: After a volatile few days, Bitcoin’s price is hovering below $12,000. But, as we have all come to expect, volatility will always come to the cryptocurrency market after a few hours of calm.

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You get a job, you get a job, everybody gets a job. 

The Bureau of Labour Statistics released its latest report, and there was nothing rather than good news in this report. America created more than 220,000 new jobs, especially in the services and professional sectors.

Why is this happening?

Looks like the economy is doing just fine. To simplify, lower taxes from the last year’s tax cuts have provided more cash to the businesses and is allowing them to spend more money on hiring.

Samsung Electronics warned everybody. 

What happened on Friday?

The Industrial, Healthcare, and Basic Materials sectors dragged the overall stock market lower on Friday. As we discussed at the start of today’s Scoop, the Analysts blamed the positive job creation report that came out on Friday morning as the main reason for the decline.

However, there was more to the story. The chip manufacturing stocks also took a hit on Friday. The decline came after Samsung Electronics Co, one of the largest chip manufacturers in the world, warned investors of the possibility of lower profitability in the second- half of 2019.

Now What?

When two of the largest technology-based economies in the world (i.e., the U.S. and China) fight over trades and tariffs, it inevitably impacts the flow of goods, the volume of the demand, and the stock prices. There is no way for investors to predict such macro trends, and the only thing left to do is to stay prudent and patient and let the politicians figure things out.

What the what, Broadcom. 

Some large companies cannot help themselves but adding more headaches to their already struggling operations. And, that’s exactly what Broadcom (Ticker: AVGO) did on Friday. Rumors are out that Broadcom is in the final stages of acquiring the security software company, Symantec Inc (Ticker: SYMC), and the news pushed Symantec’s stock price up more than 14%.

However, Symantec is a troubling acquisition. The CEO of the company left recently, after just a few years at the helm. And, last year, there was news about a few whistleblowers and the SEC started an investigation into the company’s affairs. At the same time, Broadcom has struggled to overperform the market in recent quarters. Can Symantec bring anything new to the table that helps Broadcom becoming a better company? For now, the news is rightfully welcomed by Symantec investors. What we are left wondering is whether this is the best use of resources by Broadcom!

On Wednesday, when the news broke, shares of the company was down. However, by the end of the short trading day, the stock recovered and finished the day more than 2% higher than where it started. Looks like the stock market investors are in agreement with the move.

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Not a good week for Electronic Arts. 

Shares of Electronic Arts (Ticker: EA) had a bad day on Wednesday, and the fortunes did not turn around on Friday, either. The stock price fell another 4.7% on the last day of the week.

Earlier in the year, investors were all excited about the future of the company when they saw the massive traction of its then-new released game Apex Legends. However, the recent figures are telling a different story, and investors are losing hope that the giant video game maker has actually been able to recover to its glory days.

Fool’d ya! 

So, what happened? 

More than 10 million Samsung users have downloaded a fake software update app called Updates for Samsung. Instead of software updates, they got redirected to ad-filled websites and also got charged for their updates.

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About the Author

The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card