My top 10 things to watch Wednesday, Sept. 4
1. The September sell-off continued Wednesday, one day after the Dow, the S&P 500 and the Nasdaq had their worst sessions since the Aug. 5 plunge. The Nasdaq led the way lower Tuesday, losing more than 3%. The tech sector was crushed, turning in its worst session since 2022.
2. Nvidia was dropping modestly heading into the open. Tuesday’s 9.5% decline shed nearly $300 billion in market cap, the fifth time this year that the Club stock fell more than $200 billion. Bloomberg reports the Justice Department sent Nvidia subpoenas, looking at monopolistic behavior. Despite being down 20% from its June record close, the Club stock has still more than doubled year to date.
3. Bloomberg questions whether Intel has the balance sheet to build out all that is promised. Bloomberg’s headline: “Intel’s Money Woes Throw Biden Team’s Chip Strategy Into Turmoil.” This is the point I have been trying to make on Intel, whose shares were down again Wednesday after dropping nearly 9% in Tuesday’s rout.
4. Club stock Apple was modestly lower after Tuesday’s 2.7% drop. Goldman Sachs reiterated its buy rating ahead of next week’s launch event of what’s expected to be a new AI-enabled iPhone. The analysts said they see “continued processor innovation, larger display sizes, [and] improved camera features” in addition to the AI features.
5. Wells Fargo added Microsoft to the signature picks list. The analysts see “cloud re-acceleration” at the Club name. Microsoft fell just under 2% on Tuesday and was down modestly heading into the open.
6. Zscaler sank roughly 17% on Wednesday on a weaker forecast. Investors disliked billings. How important is that really? Billings at the cloud security company will accelerate to 23% growth in the second half. I think the analysts beat a dead horse on call.
7. Barclays downgraded AI server company Super Micro Computer to its hold-equivalent rating from buy and cut its price target to $438 per share from $693. The analysts cite poor gross margins and the company’s annual filing delay after accusations in a report from short-seller Hindenburg Research.
8. Dick’s Sporting Goods issued cautious guidance after a quarterly beat on earnings and revenue. The stock dropped slightly. The results were in line with many retailers recently beating on their quarters but softening their outlooks on worries about consumer spending slowing in the back half of the year.
9. Dollar Tree dropped 10% after the discount retailer followed suit with a cut in forward guidance and a quarterly beat. The company, which also owns Family Dollar, blamed increasing pressures on middle-income and higher-income customers. Last week, Dollar General slashed its outlook and saw its shares tumble.
10. Multiples are expanding like crazy in the health care sector. Still, Cardinal Health, a favorite of mine, sells at just 15 times next year’s earnings. The Club owns GE Healthcare, which sells at 18 times next year’s earnings.
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