The stock market rose modestly on Wednesday, extending this week’s gains. However, payroll processing firm ADP reported the lowest levels of hiring growth at U.S. companies in over two years for May. Jim Cramer described the numbers as “disturbing” and highlighted a “remarkable decline in hiring.” The data has reignited discussions about potential Federal Reserve interest rate cuts.
“I think there’s a belief brewing that if we get a number as weak as we did today with ADP on Friday, there’ll be some sort of [rate] cut intra-meeting,” said Jim Cramer. “I’m not buying it. But I just wanted to let you know it’s out there.” The government’s May employment report is expected on Friday.
In company news, CrowdStrike saw a post-earnings drop of more than 4.5% in its stock on Wednesday, snapping a three-session win streak.
Adp’s disturbing hiring data
Despite the drop, Cramer remarked, “I think the quarter was unbelievably good,” noting that revenue matched expectations and earnings beat forecasts.
The Club raised its price target on CrowdStrike to $500 per share from $400, considering the decline an overreaction to some glitches in the numbers. Broadcom shares gained another 1% on Wednesday after closing at a record high in the prior session, extending a seven-session winning streak. Broadcom reports earnings after Thursday’s close.
“I don’t like to see stocks coming in this hot, although it’s only up 12% for the year,” Cramer said. A key focus for Broadcom’s upcoming earnings report will be its custom AI chip business, which grew 77% year over year to $4.1 billion in the previous quarter. In rapid-fire coverage, stocks discussed included Yum, Dollar Tree, and Snowflake.