MARKET WRAP

Stocks fell sharply today after a weaker-than-expected jobs report stoked fears that the U.S. could be headed for a recession.

The S&P 500 fell 1.8%, the Nasdaq dropped 2.4% and into a correction, down more than 10% from its recent high. the Russell 2000 was down 3.5%, it’s second 3% down day in a row..

The sell-off sent the VIX to 30, its highest level since March 2023. The US 10-Year Yield dropped to 3.79%, its lowest level of the year.

CNBC notes that market breadth was terrible, with declining volume totaling 86% of all shares traded on the NYSE, and 78% on the Nasdaq, according to FactSet data. The number of declining stocks on the NYSE totaled 76% against 75% on Nasdaq.

Consumer Discretionary was the worst-performing sector, down nearly 4%, driven by losses in Amazon. Technology was down around 3%, and Energy and Financials closed more than 2% lower.

Consumer Staples was the top sector, up nearly 1%.

A word from Guy and Dan about today’s sell-off:

“The last two days are just a snapshot of why lower rates for the wrong reasons are very market-negative. Lower rates are not a cure-all. Be careful what you wish for.” - Guy Adami

“While it’s not unsurprising that Thursday's weakness, led by Semis and the buyers of GenAi equipment and services, followed through on the open on Friday. But with weaker than expected jobs data, followed by a sharp sell-off in treasury yields, the Baton has been passed to large-cap banks to lead indices to the downside.” - Dan Nathan

MRKT MATRIX: August 2, 2024

Today’s Top Stories:

• Dow closes down 600 points, Nasdaq enters correction after weak jobs report (CNBC)

• Intel heads for worst day on Wall Street in 50 years, falls to lowest price in over a decade (CNBC)

• Big Tech Fails to Convince Wall Street That AI Is Paying Off (Bloomberg)

• How Apple Earnings Made Its Stock the Safe Play in Tech (Barron's)

• Job growth totals 114,000 in July, much less than expected, as unemployment rate rises to 4.3% (CNBC)

• JPMorgan, Citi See Fed Dealing Two Half-Point Rate Cuts in 2024 (Bloomberg)

• A $1 Trillion Time Bomb Is Ticking in the Housing Market (Bloomberg)

Today’s On The Tape is Presented by CME Group and iConnections

Turn The Market Upside Down & a Conversation with Rebecca Patterson

Guy Adami, Dan Nathan and Danny Moses discuss the current market volatility, touching on economic indicators, interest rates, and weakening sectors. They highlight the recent downtrend in the S&P 500 and the implications of lower yields due to a slowing economy. The duo analyzes the significance of the ISM numbers, China's weak manufacturing data, and the geopolitical impact on oil prices. Other topics include the performance of mega-cap tech stocks, the role of AI, consumer behavior in response to inflation, and the performance of financial institutions.

After the break, Rebecca Patterson joins for a deep dive into recent market trends and her economic outlook. They discuss the resilience of the U.S. consumer, despite inflationary pressures and credit reliance. Patterson highlights the significant changes in global economies, especially China's struggle to stimulate growth and Japan’s exit from negative interest rates. The conversation also covers the cautious stance on small caps and the nuanced expectations for Fed rate cuts. Patterson shares insights from her New York Times op-ed on the potential implications of Trump's economic policies on the U.S. Treasury market and delves into the broader impacts of the global geopolitical landscape, including the Middle East conflict and its effects on oil prices. The episode also explores the sustainability of the AI-driven stock market and the potential investment opportunities in undervalued markets like the UK, emphasizing the importance of a diversified investment strategy in uncertain times.

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