STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
Published on 9/4/26 (a/o 9:00 am)
Good morning and Happy Friday,
We’re rolling into a long weekend that will bring summer to an unofficial end. Markets will be closed on Monday for Labor Day. Apropos of the Department of Labor to release its’s flagship labor market report this morning.
Yesterday US equities rallied on the back of dovish Fed Speak. The S&P rose 1.1% and finished near its highs. The equal-weight rose 0.7% and the Russell 2000 rose 0.5%. The 2y yield was down as much as 7bp after Fed Governor Waller’s speech yesterday morning was taken dovishly, but ended the day down closer to 3bp. Consumer Discretionary (TSLA +7%), Financials, Comm Services, Real Estate and Tech led to the upside as 8/11 sectors were higher. Mega cap tech saw solid gains. SNOW was a standout, up 17% (was over 20% at one point) after its earnings, following in the footsteps of software peer CRM last week. Food companies did not have a good day: Tyson Foods (TSN) was down 7% on a negative pre-announcement, citing one of the worst cattle shortages in US history. Campbells (CPB) was also down 7% on a dividend cut margin pressure and soft guide.
Futures traded in a very tight range overnight ahead of the jobs print and the long weekend. Yields were down 1-2bp. The non-farm payrolls came in very hot, at 162K and basically tripling the 56K consensus. Not only that but June payrolls were revised higher, from 20K to 31K, and July from -23K to +44K, underscoring the highly volatility of the report. The unemployment rate was unchanged at 4.1% as the participation rate also rose. In the Household survey, unemployment rose by 115K while employed rose 569K. Markets responded by taking the 2y back up 7bp initially, basically earing the past two days of declines. Longer-term yields are more muted up ~1bp and the Dollar has rallied as well. Rate hikes odds are likely moving higher than the 50/50 we were at before the jobs data. However, yesterday during his speech, Waller said his vote would be determined by the upcoming inflation data, with no mention of the labor market.
S&P futures fell in turn but the decline is modest so far, down 0.2%. Semi names are among the leaders in the pre-market. EFX and FICO are down over 10% on a post by Director of US Federal Housing Bill Pulte pushing lenders to use the competitor VantageScore credit report.
Brent is modestly lower this morning, following up on slight decline yesterday after the November contract approached $98 at its highs. US Diesel prices hit a record $5.85/gallon. Before the data gold was slightly lower, just above $4500 and the right at the 200d ma. The yield move weakened gold even more and its now hovering just above its 100d ma ~$4400. Copper is modestly lower. Bitcoin and ETH were around unchanged, pausing after rallying yesterday but they are also moving lower on the data. Bitcoin took out the upper end of its recent range yesterday, breaking through $80K but its now fallen below $80K. Ag is mixed.
European indices are mixed and most are on track to close the week down 1-2%. Germany is a leader today with autos strong. Volkswagen (+8%) announced plans to cut 50K jobs by 2030 and invest €135B over the next four years. German Factory Orders were better than expected. European Retail sales were lower than expected. Next week the ECB will hold their policy meeting, expected to hike by 25bp. The Nikkei rose over 1% on Friday, cutting into losses earlier in the week to end it down 2%. Strength was concentrated in tech, following the US lead from yesterday (Softbank +11%). JGBs continued to see a bid this morning, extending gains from yesterday that have taken yields over 10bp lower the past 2 days. The yen cooled off after a sharp rally this week that brough it to ~155 at its low. The abrupt strengthening had triggered speculation of another yentervention, but reports seem to dispel any official sector action took place. In China the Hang Seng rose almost 2% with the major consumer tech stocks rallying (Alibaba, Tencent >2%), while Shanghai was lower. The KOSPI rose over 1%, cutting the weekly loss in half to -1.5%.
Earnings
After-Market (Thrs): AMBA, ASAN, CURV, DOCU, DOMO, GWRE, IOT, LULU, NX, OXM, PATH, PL, SWBI, ZS
Pre-Market: None
Economic Data:
US:
Global:
We’re rolling into a long weekend that will bring summer to an unofficial end. Markets will be closed on Monday for Labor Day. Apropos of the Department of Labor to release its’s flagship labor market report this morning.
Yesterday US equities rallied on the back of dovish Fed Speak. The S&P rose 1.1% and finished near its highs. The equal-weight rose 0.7% and the Russell 2000 rose 0.5%. The 2y yield was down as much as 7bp after Fed Governor Waller’s speech yesterday morning was taken dovishly, but ended the day down closer to 3bp. Consumer Discretionary (TSLA +7%), Financials, Comm Services, Real Estate and Tech led to the upside as 8/11 sectors were higher. Mega cap tech saw solid gains. SNOW was a standout, up 17% (was over 20% at one point) after its earnings, following in the footsteps of software peer CRM last week. Food companies did not have a good day: Tyson Foods (TSN) was down 7% on a negative pre-announcement, citing one of the worst cattle shortages in US history. Campbells (CPB) was also down 7% on a dividend cut margin pressure and soft guide.
Futures traded in a very tight range overnight ahead of the jobs print and the long weekend. Yields were down 1-2bp. The non-farm payrolls came in very hot, at 162K and basically tripling the 56K consensus. Not only that but June payrolls were revised higher, from 20K to 31K, and July from -23K to +44K, underscoring the highly volatility of the report. The unemployment rate was unchanged at 4.1% as the participation rate also rose. In the Household survey, unemployment rose by 115K while employed rose 569K. Markets responded by taking the 2y back up 7bp initially, basically earing the past two days of declines. Longer-term yields are more muted up ~1bp and the Dollar has rallied as well. Rate hikes odds are likely moving higher than the 50/50 we were at before the jobs data. However, yesterday during his speech, Waller said his vote would be determined by the upcoming inflation data, with no mention of the labor market.
- US 2yr +5bps to 4.39%, 5yr +3bps to 4.56%, 10yr +1bps to 4.79%, 30yr +0bps to 5.25%
- USD index: +$0.39 to $99.27
S&P futures fell in turn but the decline is modest so far, down 0.2%. Semi names are among the leaders in the pre-market. EFX and FICO are down over 10% on a post by Director of US Federal Housing Bill Pulte pushing lenders to use the competitor VantageScore credit report.
Brent is modestly lower this morning, following up on slight decline yesterday after the November contract approached $98 at its highs. US Diesel prices hit a record $5.85/gallon. Before the data gold was slightly lower, just above $4500 and the right at the 200d ma. The yield move weakened gold even more and its now hovering just above its 100d ma ~$4400. Copper is modestly lower. Bitcoin and ETH were around unchanged, pausing after rallying yesterday but they are also moving lower on the data. Bitcoin took out the upper end of its recent range yesterday, breaking through $80K but its now fallen below $80K. Ag is mixed.
European indices are mixed and most are on track to close the week down 1-2%. Germany is a leader today with autos strong. Volkswagen (+8%) announced plans to cut 50K jobs by 2030 and invest €135B over the next four years. German Factory Orders were better than expected. European Retail sales were lower than expected. Next week the ECB will hold their policy meeting, expected to hike by 25bp. The Nikkei rose over 1% on Friday, cutting into losses earlier in the week to end it down 2%. Strength was concentrated in tech, following the US lead from yesterday (Softbank +11%). JGBs continued to see a bid this morning, extending gains from yesterday that have taken yields over 10bp lower the past 2 days. The yen cooled off after a sharp rally this week that brough it to ~155 at its low. The abrupt strengthening had triggered speculation of another yentervention, but reports seem to dispel any official sector action took place. In China the Hang Seng rose almost 2% with the major consumer tech stocks rallying (Alibaba, Tencent >2%), while Shanghai was lower. The KOSPI rose over 1%, cutting the weekly loss in half to -1.5%.
Earnings
After-Market (Thrs): AMBA, ASAN, CURV, DOCU, DOMO, GWRE, IOT, LULU, NX, OXM, PATH, PL, SWBI, ZS
Pre-Market: None
Economic Data:
US:
- Non-farm payrolls: 162K vs 56K cons, prior 56K (revised up from -23K)
- Unemployment rate: 4.1% vs 4.1% cons, prior 4.1%
- Participation rate: 61.6% vs prior 61.4%
- Avg Hourly earnings m.m: 0.3% vs 0.2% cons, prior 0.3%
- Avs Weekly Hours: 34.4 vs 34.3 cons, prior 34.3
- 1:00pm Rig Count
Global:
- Germany Factor Orders m.m: 2.5% vs 0.3% cons, prior 3.7%
- Europe Retail Sales m.m / y.y: -0.6% / 0.6% vs 0.3% / 1.1% cons, prior 0.2% / 1.4%
- Japan Household Spending (July) y.y: -3.6% vs -1.6% cons, prior -3.3%
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