What to watch next week: US jobs data, Salesforce, Broadcom, American Eagle and Berkeley

The market's immediate attention is on August US jobs data, crucial for Federal Reserve rate cut probabilities after July's disappointing non-farm payrolls and significant revisions. Concurrently, tech earnings from Salesforce and Broadcom are in focus, with investors scrutinizing Salesforce's AI adoption and Broadcom's accelerating AI semiconductor revenue, following Nvidia's strong results. Elsewhere, American Eagle Outfitters reports amidst mixed retail sentiment, while UK housebuilder Berkeley Group faces ongoing sector headwinds despite a robust forward order book.

Analysis

Market focus is intensely centered on the forthcoming August US jobs data, which carries significant weight for Federal Reserve policy following a notably weak July report of 73,000 non-farm payrolls against a 104,000 forecast. The situation is amplified by substantial downward revisions for May and June, erasing over a quarter million previously reported jobs, and the politically charged firing of the Bureau of Labor Statistics commissioner, all of which has driven market probability for a September rate cut to 87%. Concurrently, the technology sector exhibits a bifurcated narrative. While Broadcom (AVGO) rides the AI wave, with its stock up 33% year-to-date and Q3 AI semiconductor revenue forecast to accelerate to $5.1 billion, Salesforce (CRM) faces immense pressure despite beating Q1 estimates and raising full-year guidance; its stock fell post-earnings, underscoring the market's demand for tangible results from its AI agent platform. In contrast, the consumer and housing sectors show clear signs of strain. American Eagle Outfitters (AEO) is down 21% year-to-date, with a 5% revenue decline in Q1 and a similar drop guided for Q2, indicating that a new celebrity collaboration may not be sufficient to offset fundamental weakness. In the UK, housebuilder Berkeley Group (BKG.L) navigates a difficult market with its shares down nearly 7%, as its 5% decline in annual pre-tax profit reflects broader economic constraints, though a strong forward order book provides some earnings visibility.

Key Decisions for Investors

• Investors should closely monitor the August US non-farm payrolls data and any revisions, as further weakness could cement expectations for a September Fed rate cut, potentially benefiting rate-sensitive assets.
• For AI-exposed stocks like Broadcom, continued focus should be on execution against accelerated growth forecasts, while for Salesforce, investors must look beyond headline numbers to AI adoption metrics to justify its high valuation.
• Caution is warranted for American Eagle Outfitters; while celebrity partnerships can generate short-term interest, the underlying fundamentals of declining revenue, recent losses, and a broker downgrade signal significant business risk.
• When evaluating UK housebuilders like Berkeley Group, it is crucial to balance its defensive upmarket positioning and secured forward sales against persistent macroeconomic headwinds from interest rates and cautious consumer confidence.