Markets edge higher as data reveals fewer job openings than expected

Dow was up 123, advancers over decliners about 3-1 & NAZ gained 33.  The MLP index added 2+ to the 284s & the REIT index crawled up 1+ to the 429s.  Junk bond funds were mixed & Treasuries saw more buying which lowered yields.  Oil slid back pennies to 70 & gold was up 5 to 2528.

Dow Jones Industrials

Job openings slumped to their lowest level in 3½ years in Jul, the Labor Dept reported in another sign of slack in the labor market.  The closely watched Job Openings & Labor Turnover Survey (JOLTS)  showed that available positions fell to 7.67M on the month, off 237K from Jun's downwardly revised number & the lowest level since Jan 2021.  The forecast had been looking for 8.1M.  With the decline, it brought the ratio of job openings per available worker down to less than 1.1, about ½ where it was from its peak of more than 2 to 1 in early 2022.  The data likely provides further ammunition to Federal Reserve officials who are widely expected to begin lowering interest rates when they meet for their next policy meeting on Sep 17-18.  Fed officials watch the JOLTS report closely as an indicator of labor market strength.  While the job openings level declined, layoffs increased to 1.76M, up 202K from Jun.  Total separations jumped by 336K, pushing the separations rate as a share of the labor force up to 3.4%.  However, hires rose as well, up 273K on the month, putting the rate at 3.5% or 0.2 percentage point better than Jun.

Job openings fell more than expected in July in another sign of labor market softening

Atlanta Federal Reserve Pres Raphael Bostic signaled that he is ready to start lowering interest rates even though inflation is still running above the central bank's target.  Previously 1 of the more hawkish policymakers, or in favor of tighter policy to fight inflation, Bostic noted that his focus is shifting more towards the employment side of the Fed's mandate as signs increase of labor market softening.  “I believe we cannot wait until inflation has actually fallen all the way to 2 percent to begin removing restriction because that would risk labor market disruptions that could inflict unnecessary pain and suffering,” he wrote on the Atlanta Fed's website.  The Fed's preferred measure showed inflation running at a 2.5% rate in Jul & just a slightly higher 2.6% core rate when excluding food & energy.  Bostic did not specify how much or when he thinks the Fed should start easing.  However, the missive comes with markets already widely expecting the central bank to cut its benchmark borrowing rate by at least a qtr percentage point when it meets Sep 17-18.  As an FOMC voting member this year, Bostic's views carry extra weight & add another level of assurance that the Fed will enact its first easing since the emergency measures it took more than 4 years ago in the early days of the Covid crisis.  Bostic said his experiences with business leaders in the Atlanta area reflect that concern.  “Rest assured, I do not sense a looming crash or panic among business contacts. However, the data and our grassroots feedback describe an economy and labor market losing momentum,” he added.  “The upside to this is that the slowdown in activity is feeding a continuing, welcome decline in the pace of inflation.”  He cited multiple factors indicating that inflation is progressing convincingly back to the Fed's target as the labor market moderates.  “Given the circumstances before us — eroding pricing power and a cooling labor market — I’ve rebalanced my focus toward both sides of the dual mandate for the first time since early 2021,” he noted.

Atlanta Fed’s Bostic says officials can’t wait for 2% inflation to start cutting

Qualcomm (QCOM) launched a new PC processor as it looks to capitalize on electronics makers' desire to put artificial intelligence on their devices.  Qualcomm took the wraps off the Snapdragon X Plus 8-core at the IFA conference in Berlin, Germany.  The processor, designed for PCs running Microsoft's (MSFT) Windows operating system, promises to power AI processes with a long battery life.  The latest chips expand QCOM's Snapdragon X Series for PCs, which it launched last year.  The US chip giant said the Snapdragon X Plus 8-core is designed for PCs costing as low as $700 as it looks to expand its semiconductors to more devices.  Qualcomm has traditionally designed chips that are used in the smartphones of many of the world's biggest players, including Samsung.  But the company stepped up its PC efforts this year when MSFT announced a Surface Laptop & a Surface Pro tablet with Qualcomm’s X Series chips that can run some AI tasks without an internet connection. MSFT calls these Copilot+ PCs.  Analysts said QCOM's timing to jump into PCs is key.  Neil Shah, a partner at Counterpoint Research, highlighted a few converging themes that are helping the company.  He highlighted the push toward “on-device AI,” where artificial intelligence applications are processed on a piece of hardware rather than via the internet.  QCOM has designed processors for smartphones that do this.  “Since the AI boom happened last year, everything has been centered around AI which works well for Qualcomm because they have been ahead in the low powered AI device experiences on mobile,” Shah said.  “Translating that to the PC form factor was not that difficult.”  The support of MSFT has also been important for QCOM to hit the mainstream in PCs, since Windows is one of the world's biggest operating systems, Shah said.  QCOM rose 3.10 & MSFT fell 72¢.

Qualcomm ramps up challenge to Intel and AMD with latest AI PC chip

The stock market recovered some losses, coming off a steep sell-off fueled by worries about economic growth & the artificial intelligence trade.  Stocks appeared to turn positive after fresh data showed further signs of the labor market cooling, prompting bond yields to fall & investors to ramp up their hopes for more extensive interest rate cuts in 2024.  The up & down start to Sep has investors bracing for more volatility as a historically tough month for stocks follows a turbulent Aug.