Due to Dell’s () outstanding results, higher guidance and comments, AI-related stocks are resurging. Specifically, Dell Computer on Wednesday announced record revenue of $47 billion, which is up 58% in the past year. The company also raised its revenue guidance above analyst expectations and said it would have even stronger sales of AI servers if there were not a memory shortage.
As a result of the report, expectations remain low for Friday’s payroll report. ADP reported on Wednesday that only 38,000 private sector jobs were created in August, which was the smallest monthly increase since January and significantly below economists’ consensus estimate of 47,000 jobs. The shocking detail in the ADP report was that manufacturing lost 17,000 jobs. ADP’s chief economist, Nela Richardson, said the labor market is characterized by “choppy hiring.”
If the Labor Department announces another lackluster , the should not increase key interest rates. Furthermore, most of the inflation appears to be energy-related, which the Fed cannot control. Despite a flare-up in fighting between Iran and the U.S., prices typically moderate after Labor Day as worldwide demand ebbs. The drawdown in crude oil prices after Labor Day may not be as dramatic as it has been in the past since strategic crude oil inventories have been depleted around the world, so I expect crude oil prices will remain firmer than normal until inventories are replenished.
The G-20 finance ministers meeting in Asheville, North Carolina, closed on concerns amidst rising bond yields, spats over tariffs, public insults, and even fighting over a group photo. Yikes! Due to China, the G-20 finance ministers were not able to release a joint statement. European finance ministers were furious that Russian Finance Minister Anton Siluanov was invited and did not want him in a group photo.
German Finance Minister Lars Klingbeil told reporters that “The joint approach of the Europeans, for which I am also very grateful, ultimately led to this family photo taking place without the Russian finance minister, without the Russian delegation.” Traditionally, the G-20 finance minister summit is held to bring together the top financial ministers and find a way for them to coalesce around joint challenges. Obviously, with 20 countries, there are often differing opinions and factions.