US stocks fell sharply on Thursday due to weaker-than-expected jobs and manufacturing data, sparking concerns about an economic slowdown. The Dow dropped nearly 500 points or minus 1.21%, the S&P 500 fell 1.37%, and the Nasdaq decreased by 2.3%. Initial jobless claims hit their highest level since August last year, and factory activity contracted further in July. The 10-year Treasury yield fell below 4% for the first time since February, closing at 3.981%, while the 2-year yield eased to 4.156%. These are our stock picks of the week:
SNAP
Snap's third-quarter revenue forecast is between $1.335 billion and $1.375 billion, with a midpoint of $1.355 billion, slightly below analyst expectations of $1.36 billion. Snap's second-quarter revenue grew by 16% to $1.07 billion, even though impacted by a weaker brand advertising market. Monthly active users rose 850 million, and Snapchat+ subscribers exceeded 11 million. CEO Evan Spiegel noted significant growth in advertising and a $249 million annualised revenue run rate for Snapchat+.
SNAP (Daily). The price has fluctuated between $8 and $17 per share over the past year with $12.50 as the median level. From the technical perspective, we are looking to Long around $11.50 with a target of around $13.80.
AMAZON
Amazon forecasts third-quarter revenue between $154 billion and $158.5 billion, with a midpoint of $156.25 billion, slightly below the $158.24 billion consensus estimate. CFO Brian Olsavsky links the expected revenue decline to distractions like the Paris Olympics, the US presidential election and the recent attempted assassination of Donald Trump. CEO Andy Jassy notes that consumers focus on essentials and cheaper items due to economic challenges, causing slower growth in higher-ticket items. E-commerce peers like Wayfair and Etsy are also seeing a spending slowdown, driven by inflation and a stagnant housing market.
AMZN (Daily). The price attempted to break the bullish projection line at 182.00 due to profit-taking amidst the economic slowdown. We are looking at two potential levels around $182 and $166 to Buy.
APPLE
Analysts are watching Apple's new AI system, Apple Intelligence, which could boost iPhone upgrades and hardware sales. However, CEO Tim Cook and CFO Luca Maestri were vague about its rollout and sales impact. Apple reported $2.15 billion in capital expenditures for the June quarter, up 8% from the previous quarter and 3% year-over-year, reflecting increased AI investments. This spending is relatively modest compared to rivals: Microsoft spent $13.87 billion (up 55% YoY), Alphabet $13.19 billion (up 91%), and Meta $8.3 billion (up 31%). Despite the uptick in AI investment, Apple's capital expenditures are still lesser than its competitors.
AAPL (Daily). Up almost 45% in just 3 months, Apple needs a correction to boost its prices again, especially ahead of the election and the Fed rate cut in September. We predict the area will be between 38.2% to 61.8% of the Fibonacci level or at 192.00 to 209.00 before bouncing back.
Fullerton Markets Research Team
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