The Nasdaq is in correction territory. Warren Buffett is shifting to cash. Investors fret about AI. Things are getting interesting on Planet Finance.

Markets in the US and Western Europe saw a sharp selldown on Friday, sending the Nasdaq into correction territory following a weaker-than-expected US jobs report. That just added momentum to a selloff of Big Tech shares as traders worry about the commercial viability of artificial intelligence.

The Nasdaq is now down more than 10% since 11 July after losing 2.4% on Friday and the Dow lost 600 points heading into the weekend, good for a one-week drop of 2.1%.

Investors pummeled Intel, sending its shares down 26% after it announced it would lay off 15k people as part of a plan to cut bns of USD in spending.

The weak jobs report has some wondering whether the Fed will need to cut rates by more than a quarter point when it meets in September. While rate cuts should be good for equities (lower rates sends money into the stock market looking for better returns), the concern is that the Fed may have waited too long to act, setting up worries about the health of the US economy.

WATCH THIS SPACE #1- Berkshire nearly halves its stake in Apple: Warren Buffett’s Berkshire Hathaway cut its massive stake in Apple by nearly 50% to USD 84.2 bn in 2Q 2024, the firm’s latest earnings filing (pdf) showed. The stake sale, which raised the conglomerate’s cash holdings to a record USD 277 bn, is part of a wider sell off that saw Berkshire offload some USD 75.5 bn worth of stock on a net basis during the quarter as the S&P 500 rallied.

Could this add momentum to a risk-off, signaling that cash is king? “You could conclude this is another sell signal,” Edward Jones analyst Jim Shanahan said. “This was a far higher level of selling activity than we were expecting.”

WATCH THIS SPACE #2- Is all of this a signal that we’re in for a turbulent fall? Mayhaps, to quote the resident 17-year-old. Bloomberg has a rundown of views well worth your reading.

The bottom line? “This is what a growth scare looks like,” Wasif Latif, president and chief investment officer at Sarmaya Partners, told Reuters. “The market is now realizing that the economy is indeed slowing.”

Want more? See reports in the Financial Times | Reuters | CNBC

MARKETS THIS MORNING-

Major Asian benchmarks are in the red this morning, which CNBC blames on investors adopting a wait-and-see approach as they wait for key trade data from China and Taiwan and interest rate decisions from the central banks of Australia and India due later this week. Japan’s Nikkei is down almost 6% at dispatch time — inching closer to bear territory, after falling near 20% since its high recorded on 11 July — the Kospi is down almost 5%, and the Hang Seng fell close to 1%.

Meanwhile, US stock futures fell last night after last week’s selldown.

THE CLOSING BELL-

The ADX fell 0.7% on Friday on turnover of AED 902.7 mn. The index is down 3% YTD.

In the green: Abu Dhabi Ship Building Co. (+2.5%), Ooredoo (+2%) Emirates Telecommunications Group Company (+1,5%).

In the red: National Bank of Umm Al Quwain (-6.4%), GFH Financial Group (-4.1%) and Al Dar Properties (-4%).

Over on the DFM, fell 1% on turnover of 395.9 mn. Meanwhile Nasdaq Dubai fell 1%

CORPORATE ACTIONS-

Alef Education will pay AED 203.6 mn in interim dividends for 1H 2024, according to an ADX filing (pdf). This includes an AED 67.5 mn payout to freefloat investors — per an earlier commitment made ahead of its IPO earlier this year — and an AED 136.1 mn payout to founding shareholders.

REMEMBER- Alef debuted on the ADX in June, raising AED 1.89 bn — making it the biggest this year — but seeing a lackluster debut, with shares falling 18% on its first day of trading.