Rate Hike Odds Soar on Strong Labor Market
The upcoming August jobs report is expected to be crucial for the Federal Reserve's next move. Following a hawkish speech from new Fed Chairman Kevin Warsh, odds of a quarter-point September rate hike have jumped to 57% from 40%, with an 18% chance of another hike in October.
Economists predict a modest rise in August nonfarm payrolls of 55K, with the unemployment rate holding at 4.1%. Wells Fargo economists say alternative indicators suggest job growth has stabilized rather than continuing to deteriorate.
Broadcom's earnings will provide further insight into AI spending when it reports on Wednesday. Analysts expect EPS of $3.24 on revenue of $29.4B, but SA analyst Dustin Quasney warns that the stock faces elevated near-term downside risk ahead of earnings due to high expectations set by Nvidia's recent results.
John Ternus will step into the role of Apple CEO on Tuesday, taking over from Tim Cook. SA analyst Envision Research is confident that the new leadership will preserve the company's 'well-established earning power and shareholder return mechanisms.'