Weekly Market Watch - September 6, 2024

The U.S. economy is teetering on the edge , and today's jobs report could be the tipping point. As businesses cut back on hiring , the question remains: Is the labor market simply cooling or spiraling into deeper trouble?

• Expectation vs. Reality: Economists anticipated 160,000 jobs added in August, but we actually landed at 142,000.

• Hiring Falls Off: U.S. employers are hiring at the lowest rates since 2014, and tech companies are leading the layoffs. Over 75,000 job cuts were announced in August alone.
• Jobless Claims Down, Layoffs Up: While unemployment claims fell slightly, layoffs in the tech sector skyrocketed.
• Critical Timing: Despite fears of a deeper economic slowdown, the Fed is poised for a rate cut later this month with this weaker than anticipated employment data likely to influence its magnitude.

NVIDIA may be the golden child of AI, but even the most hyped stock can’t escape gravity. After a monster run-up, tech stocks are starting to feel the pinch , dragging the market down as investors look for safer places to stash their cash.

• NVIDIA’s Growth Story Hits a Speed Bump: Sure, NVIDIA crushed earnings—again—but 122% sales growth feels almost meh compared to last quarter’s wild 262%. No one stays on top forever.
• Tech Stocks: From Hero to Zero: After an insane 109.5% run from late 2022, tech is now down 8.5%, taking the overall market down 2.9 percentage points. Ouch.
• NVIDIA: The Gift That Keeps Taking: NVIDIA led the rally, contributing a whopping 7.9 points, only to turn around and snatch 0.9 points back as it slides 15.9%. Thanks for nothing.
• Magnificent 7 Hits a Wall: The big players—Microsoft, Alphabet, Apple, Amazon—they’ve all been partying like it’s 1999, but now they’re the ones dragging everyone down. Meta’s the only one still in the green.

Lagging behind other industries in their recovery to pre-pandemic employment levels, the retail and hospitality sectors are still feeling the post-COVID hangover.

• Sluggish Recovery: Retail and hospitality hit pre-2020 employment levels two years after other industries. This slow recovery hints that the sector’s employee value proposition just isn’t cutting it.
• Regional Breakdown: The South led in job growth, adding 55,000 positions, with the West following at 20,000. The Northeast and Midwest saw more modest gains.
• Wages by Industry: Construction saw a decent pay rise of 5.2%, while natural resources and mining lagged at 3.9%. Service-providing industries like education/health services saw a 5.1% increase.

A recent survey by Statista reveals that nearly half of Americans are ready to switch car brands , even though the majority are happy with their current make.

• Car Brand Shuffle: Consumers seem to crave variety in their car brands, not because they’re unhappy, but to experience what’s new – 86% of respondents say they are satisfied with their car make, but 50% are still open to trying something different.
• Stronger Loyalty Elsewhere: Consumers are more loyal to their banks, smartphones, and mobile carriers, with only 30% saying they would switch brands.

Car insurance premiums are all over the place , depending on where you live and a few other key factors. Here’s a quick breakdown of the most expensive and cheapest states to insure your ride.

• Top Dollar: If you’re in Louisiana or New York, prepare to dig deep—full coverage hits over $4K a year. For minimum liability, New York tops out at $2,221/year.
• Budget-Friendly: Maine's a safe bet with the cheapest full-coverage rates at $1,460/year, and Wyoming wins for lowest minimum liability at just $303/year.
• What Drives Costs: Things like your driving record, where you live, and even your credit score all play a part in how much you’ll pay.

Consumer spending and sentiment in the auto market show mixed signals in the latest Cox Automotive report . While retail vehicle sales have seen positive growth, consumer sentiment remains volatile.

• Consumer Spending Slows: Spending growth has turned negative since June, with inconsistent patterns suggesting a slowdown in consumer activity.
• Sentiment Dips: August saw a brief rebound in consumer sentiment (+0.3%), but this quickly reversed by the end of the month, mirroring erratic spending behaviors.
• Retail Sales Rise: New car sales jumped 8%, and used car sales climbed 4%, hitting yearly highs despite economic headwinds.
• Financing & Loan Rates: Low APR rates under 3% rose to 12.1%, while average auto loan rates remained steady at 13.92% for used cars and 9.58% for new vehicles.

Both new and used vehicle supply is getting tighter. Here’s what you need to know:

• New-Vehicle inventory: Is down compared to last month. It’s still up year-over-year, but that’s cold comfort with demand heating up.
• Used-Car Supply: Is shrinking too, with fewer vehicles available than this time last year.?
• Looking Ahead With supply tightening and demand holding steady, brace yourself for further price increases in the near future.
• Prices Creeping Up: In August, used-car prices bumped up for the first time in 2024. Wholesale prices increased 0.3%, and retail wasn’t far behind with a 0.1% rise.

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