😒 August Jobs Report

+ Selena Gomez Joins the Billionaire Club

September 06, 2024

Good afternoon! Dell and Palantir are officially getting the VIP treatment—they’re joining the S&P 500. After-hours on Friday, both companies saw their shares pop, with Dell replacing Etsy and Palantir bumping American Airlines out of the index.

For Dell, it’s a homecoming. The company was part of the S&P 500 before going private in 2013, only to return to the public market in 2018. Meanwhile, Palantir has been riding a wave of profitability, making its debut on the index after going public in 2020. The news got fund managers buzzing, as they now have to reshuffle their portfolios to match the new lineup.

MARKETS

  • US stocks tumbled on Friday, wrapping up a turbulent week as investors reacted to a mixed August jobs report. The tech sector took the hardest hit, with the Nasdaq falling over 2.5%, while the S&P 500 and Dow Jones slipped 1.7% and 1%, respectively. The S&P 500 recorded its worst week since March, largely driven by a selloff in leading technology stocks.

  • The labor data showed the U.S. added 142,000 jobs in August—an improvement from July but still below expectations. This uncertainty did little to clarify whether the Federal Reserve will opt for a significant rate cut later this month, leaving investors on edge as Treasury yields hit their lowest level of the year.

STOCKS
Winners & Losers

What’s up 📈

  • Samsara ($IOT) surged 13.60% after its full-year forecast beat expectations, estimating adjusted earnings of 16-18 cents per share and revenue between $1.224 billion and $1.228 billion.

  • Guidewire Software ($GWRE) climbed 12.36% after the company surpassed analysts’ expectations with earnings of 62 cents per share on $291.5 million in revenue. FactSet had estimated 54 cents per share and $283.8 million in revenue.

  • Bowlero ($BOWL) rose 6.58% after reporting fiscal fourth-quarter revenue of $283.9 million, beating the expected $273.4 million.

  • DocuSign ($DOCU) increased 3.97% after its fiscal second-quarter results exceeded expectations, driven by strong subscription growth.

  • United States Steel ($X) slipped 4.34% after the White House announced plans to block Nippon’s acquisition of U.S. Steel.

  • GameStop ($GME) fell 6.83%

What’s down 📉

  • Broadcom ($AVGO) dropped 10.36% after beating earnings but failing to impress investors with its revenue guidance for the next quarter.

  • e.l.f. Beauty ($ELF) fell 9.65% despite exceeding earnings estimates, as concerns over competition weighed on the stock.

  • Mobileye ($MBLY) declined 8.48% after Bloomberg reported that Intel is weighing options for its stake in the company.

  • Tesla ($TSLA) fell 8.45%, capping off what had otherwise been a strong week, as weak economic and consumer data triggered declines on Friday.
    Coinbase ($COIN) fell 7.73%, mirroring Bitcoin's drop below $54,000, down 3.78% over the past 24 hours.

  • Super Micro Computer ($SMCI) dropped 6.79% after JPMorgan downgraded the stock to neutral from overweight, citing uncertainty around regulatory compliance.

  • UiPath ($PATH) slid 6.04% despite better-than-expected fiscal second-quarter earnings and revenue, as the broader tech sell-off overshadowed the results.

  • AST SpaceMobile ($ASTS) declined 8.22%.

    NVIDIA ($NVDA) slipped 4.09%.

    Alphabet ($GOOGL) dropped 4.02%.

    Amazon ($AMZN) slid 3.65%.

ECONOMY
August Jobs Report: Not Great, Not Terrible

It looks like the Fed has some tough choices to make after August’s jobs report hit with a “meh” response. The U.S. economy added 142,000 jobs—better than July’s nerve-wracking numbers but not the blowout people were hoping for. The unemployment rate also dipped a little to 4.2%, which might calm some nerves but doesn’t answer the big question: Will the Fed cut rates by a quarter-point or go bold with a half-point?

What Happened?

The Fed’s been itching to cut rates, especially after June and July’s job growth took a nosedive. But Friday’s report was like a Goldilocks situation—not too hot, not too cold. The headline numbers weren’t weak enough to scream “emergency,” but downward revisions to the summer months suggest things aren’t looking as strong as they seemed.

Here’s what we know:

  • Job growth: 142,000 in August, following revised numbers from June and July, which showed 86,000 fewer jobs than previously reported.

  • Unemployment: A modest dip to 4.2%.

  • Wage growth: Hourly earnings ticked up 3.8% year-over-year, a small silver lining for workers.

Fed's Dilemma: 25 or 50?

With the Fed’s next meeting on Sept. 18, central bankers are torn between two options:

  • The safe bet: Cut rates by 25 basis points to keep things steady and avoid rocking the boat.

  • The bold move: Go for a 50 basis point cut to really send a message and juice the economy. Some argue that the summer hiring slowdown justifies this.

So, what’s the vibe on Wall Street? Uncertainty. The S&P 500 dropped 1.7% on Friday, marking its worst week in 18 months. The bond market also reacted with 10-year Treasury yields dipping to their lowest point in over a year.

Fed Speak

Fed Governor Christopher Waller hinted that a sequence of cuts is likely but didn’t give a clear signal on whether they’ll go for the big 50 basis point cut just yet. Meanwhile, New York Fed President John Williams remained non-committal, saying he didn’t have a firm view on the size of the cut.

In short, the Fed’s in a wait-and-see mode, leaving markets jittery heading into September.

What’s Next?

While August’s job report wasn’t a disaster, it didn’t exactly boost confidence, either. Economists are now looking ahead to see if the Fed will play it safe with a smaller cut or go for a bigger move to jumpstart the economy. Whatever happens, it’s going to keep markets on their toes.

NEWS
Market Movements

BUSINESS
Selena Gomez Joins the Billionaire Club

Selena Gomez has officially entered the billionaire club, and it's not from breaking records on the Billboard charts. Her beauty brand, Rare Beauty, has turned the 32-year-old actress, singer, and entrepreneur into one of the youngest self-made billionaires in the U.S., with a fortune of $1.3 billion, according to Bloomberg. But don’t be fooled—this success story goes way beyond a pop star simply slapping her name on some lip gloss.

The Rare Billionaire Formula

The vast bulk of Selena's wealth—around $1.1 billion—comes from her 51% stake in Rare Beauty, the makeup line she launched in 2020. It’s a brand that hit big with influencers and Gen Z, generating $350 million in revenue last year. Rare Beauty isn't just another celeb-founded brand; it’s become a beauty powerhouse, outshining competitors like Jessica Alba’s Honest Co. and Lady Gaga’s Haus Labs. What makes it stand out? For starters, Selena marketed it as affordable, high-quality, and inclusive, with a message that celebrates authenticity. No wonder it’s selling out faster than her concert tickets.

But it’s not all about making bank. Rare Beauty donates 1% of its sales to the Rare Impact Fund, which aims to raise $100 million over the next decade to support mental health services. The fund is deeply personal to Gomez, who has been candid about her own struggles with bipolar disorder. This combination of purpose-driven business and beauty innovation has not only cemented Rare Beauty’s place in the market but also earned Gomez a loyal customer base.

Diversifying Her Empire

While Rare Beauty is the crown jewel of her portfolio, Selena is far from a one-trick pony. She’s got her hands in several pots, and it’s paying off big time. Her mental health startup, Wondermind, which she co-founded with her mom and Daniella Pierson of The Newsette, was valued at $100 million in 2022. It’s backed by investors like Sequoia Capital and Serena Williams’s venture fund. Wondermind is all about providing accessible mental health tools and resources, and it fits neatly into Selena’s broader mission of mental health advocacy.

Then there’s her acting career, which is booming. Selena stars alongside comedy legends Steve Martin and Martin Short in Only Murders in the Building, raking in at least $6 million per season. The Hulu hit just kicked off its fourth season, and Selena’s performance as the quirky, mysterious Mabel Mora has earned her an Emmy nomination. While she may have started her career as a Disney darling, Selena’s acting chops and producing gigs (she’s also an executive producer on the show) are proving she’s got serious staying power in Hollywood.

Brand Partnerships and Social Media Power

When Selena’s not in front of the camera or overseeing Rare Beauty, she’s leveraging her massive social media following—424 million Instagram followers, making her the third most followed person on the platform, trailing only Cristiano Ronaldo and Lionel Messi. That digital clout has scored her major brand deals. She inked a $30 million deal with Puma and a $10 million contract with Coach. These partnerships, combined with her music royalties and acting roles, have only added to her ever-growing fortune.

What’s fascinating is that while Selena’s music career helped launch her into the public eye, it’s not a major source of her wealth. Unlike her friend Taylor Swift, who owns much of her songwriting catalog, Selena’s music earnings come primarily from performance royalties. Her last tour was back in 2016, and while it raked in $30 million, music accounts for less than 5% of her total net worth. Smart move? Absolutely. Selena has built a diversified empire that isn’t tied to the volatile ups and downs of the music industry.

Building a Legacy

So, what’s next for Selena? For now, she’s keeping her focus on acting and business, hinting that while she might have one more album in her, her passion lies elsewhere. “I would probably choose acting,” she revealed on a recent episode of the SmartLess podcast. She’s also expanding her empire into new projects, including executive producing a reboot of her Disney Channel hit Wizards of Waverly Place.

And let’s not forget the potential growth of Rare Beauty. While Selena has fielded offers to sell the brand, including a reported $2 billion valuation, she’s publicly said she has no plans to let go of her beauty baby anytime soon. Given Rare’s rapid rise and staying power, she might be right to hold on and ride the wave.

Selena’s success isn’t just a stroke of good luck—it’s a carefully crafted blend of talent, business savvy, and authenticity. She’s created multiple revenue streams, invested in long-term ventures, and built a brand that resonates deeply with her fans. At just 32, she’s already established herself as a mogul in the beauty industry and beyond.

The Rare Takeaway

Selena Gomez’s ascent to billionaire status is proof that being a multi-hyphenate pays off—literally. While her journey started as a child star on Barney & Friends and Disney’s Wizards of Waverly Place, she’s grown into a force to be reckoned with, using her platform to not only build a fortune but to also promote causes she cares deeply about. Rare Beauty is much more than a makeup brand; it’s a testament to her vision, resilience, and commitment to being authentic, both on and off the screen.

Her next chapter? Whatever it is, it’s sure to be rare and profitable.

Calendar
On The Horizon

Next Week

Next week’s lineup is looking pretty light, but there’s one report that’s got everyone buzzing.

On Wednesday, the Consumer Price Index (CPI) drops, and it’s a big one. CPI is the go-to inflation gauge, and whatever it shows could nudge the Federal Reserve toward its next move. Last month, inflation rose 2.9% over the past year—the smallest jump since March 2021. If the cooling trend continues, it’ll give the Fed even more reason to consider cutting rates later this month.

And while earnings season is wrapping up, there are still a few stragglers worth watching. Keep your eyes peeled.

Earnings:

Monday: Oracle ($ORCL)

Tuesday: GameStop ($GME), Dave & Buster’s ($PLAY), Petco Health & Wellness ($WOOF)

Wednesday: Manchester United ($MANU), Vera Bradley ($VRA)

Thursday: Adobe ($ADBE), Kroger ($KR), Signet Jewelers ($SIG)

NEWS
The Daily Rundown

RESOURCES
The Federal Reserve Resource

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