Stocks Rise on Cooler Jobs Report, Apple and Amazon Show Promise, Palo Alto Presents Buying Opportunity
U.S. stocks experienced a boost on Friday as investors analyzed a July jobs report that came in below expectations. The report, along with impressive earnings from Big Tech companies, drove this positive sentiment. Meanwhile, Treasury yields saw a slight decline after a significant spike earlier in the week, providing relief for growth stocks. Nonfarm payrolls increased by 187,000, slightly missing estimates, but experts don’t believe these figures will significantly impact the Federal Reserve’s monetary policy decision-making. Investors are now closely monitoring whether there will be another interest rate hike before the year ends, with the Fed’s next meeting set for mid-September. Despite the slightly disappointing employment report, the unemployment rate remains at a record low of 3.5%, indicating a robust labor market, according to Club portfolio director Jeff Marks.
Apple (AAPL) saw a 3% drop in stock prices on Friday, following their mostly positive quarterly results. Despite a slight miss in product sales, their record Services sales overshadowed the shortfall. With several upcoming catalysts and a history of share price surges leading up to their annual product launch in the fall, the CNBC Investing Club remains confident in Apple’s potential. They have reaffirmed their view of owning the stock rather than trading it and have raised their price target to $205 per share. Meanwhile, Amazon (AMZN) experienced a remarkable surge of over 10% thanks to its blockbuster fiscal report that exceeded revenue and earnings expectations. Investors celebrated the stabilizing growth of Amazon Web Services, the company’s cloud unit, and the increase in operating margins. The club has increased its price target for Amazon to $160.
On the other hand, Palo Alto Networks (PANW) saw a significant drop of approximately 10% in its stock prices on Friday. This decline was triggered by cybersecurity peer Fortinet’s announcement that deals were being delayed due to macro uncertainty, prompting the company to lower its full-year guidance. Although weak results or negative commentary from certain players in the industry can impact overall sentiment, the CNBC Investing Club believes Palo Alto continues to shine through. The cybersecurity sector remains a high priority for companies to invest in, making it a great industry to allocate funds to. With Palo Alto’s stock down about 12% this week, the Club sees this as a potential buying opportunity. Palo Alto is set to report their quarterly earnings after the closing bell on August 18.
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