Market 08/04: US adds 187,000 jobs in July

May and June job numbers continue to be revised down, raising concerns about the reliability of the jobs report

US adds 187,000 employed workers in July, lower than the 200,000 forecast. This is the second consecutive month below forecast, excluding revisions.

Unemployment rate edges down to 3.5%

Hourly earnings growth steady at 0.4% from last month

May-June figures continue to be revised down, raising concerns about report reliability as all 2023 months have been revised down

Stocks hold tight due to rising bond yields. Oil rises as supply tightens

Nasdaq overbought for 60 straight days, longest since before dot-com bust.

Bond yields rise, with 10-year Treasury yield trading around 4.18%, highest since Nov/2022.

30-year bond rises near record high from last October.

Oil prices rebound after Saudi Arabia announces possible cut of 1 million bpd or more until September.

Initial jobless claims hit 227,000, up slightly from last week but remain low over past 6 months.

BOJ intervenes in bond market for second time this week. BOJ buying continues to weaken JPY, Japanese stocks volatile. JPY trading at 143.6 vs USD.

Apple ER - iPhone sales down, revenue down 3 quarters in a row

• Revenue down -1% YoY to $81.8B.

• Products down -4% YoY to $60.6B.

• Operating margin at 28% (flat YoY).

• EPS $1.26 (beat by $0.07).

Revenue source changes:

All segments trending slower…

…except services fees up +8% YoY to $21.2B, 26% of revenue, highest ever.

China market revenue surprises with +7.9% YoY, while US revenue slows somewhat, Japan worst at -11.5% due to yen purchasing power decline.

Amazon ER - Revenue surges thanks to AWS

• Revenue up +11% YoY to $134.3B ($3B beat).

• FCF $7.9B trailing 12 months.

• EPS $0.65.

AWS:

• Revenue up +12% YoY to $22.1B.

• Operating margin 24% (-4pp Y/Y).

Operating margin 5.7% (+3pp Y/Y), double YoY and well above expected +3.6%.

International market still negative, while US market at 3.89%, highest since Q3 2021.

Q3 FY23 guidance revenue to hit $140B ($2B beat), implying 10.5% YoY growth.

Airbnb ER

• GBV +13% Y/Y to $19.1B.

• Nights booked up +11% YoY to 115 million.

• Long-term stays up 18%.

• Revenue up +18% YoY to $2.5B ($60M beat).

• Operating margin 21% (+4pp Y/Y).

• EPS $0.98 ($0.20 beat).

• FCF +13% YoY to $0.9B. Q3 revenue guidance $3.4B ($0.1B beat).