Traders Market Weekly: Inflation, Disinflation or Deflation

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    Tesla (TSLA 275.48, -1.06, -0.4%): eliminated jobs at China battery plant, according to Bloomberg; offers rebate on top models in China, according to Reuters


    Costco (COST 534.87, -2.50, -0.5%): reports June adjusted comparable sales growth of 3.0%


    Biogen (BIIB 285.92, +0.93, +0.3%): confirms FDA granted traditional approval for LEQEMBI


    Alibaba (BABA 86.20, +2.36, +2.8%): China will end Ant Group’s regulatory issues with fine of at least $1.1 billion, according to Reuters


    Nonfarm payrolls increased by 209,000 in June (consensus 220,000) and there were downward revisions to April and May that, combined, showed 110,000 fewer jobs than originally thought. Average hourly earnings, though, increased a stronger than expected 0.4% (consensus 0.3%) and May was revised up to 0.4% (from 0.3%), so the year-over-year change in June was unchanged at 4.4%.

    The key takeaway from the report is that it continued to fit in the soft landing zone, as payroll growth slowed but remained positive; meanwhile, an increase in the average workweek and the 0.4% increase in average hourly earnings are a boon for aggregate earnings that will continue to support both discretionary and non-discretionary spending.

    The Treasury market had a knee-jerk reaction, but yields have returned to levels seen before the data was released.

    The 2-yr note yield, at 5.01% before the data, plunged to 4.91% in the immediate aftermath but now sits at 5.00%.
    The 10-yr note yield, at 4.07% shortly before 8:30 a.m. ET, fell to 4.01% but now sits at 4.07% again.


    The S&P 500 futures are down 7 points and are trading 0.1% below fair value.
    The Nasdaq 100 futures are down 11 points and are trading slightly below fair value.
    The Dow Jones Industrial Average futures are down 63 points and are trading 0.1% below fair value.


    Eyes already moves onto next Tuesday’s CPI report and the potential for a fall below 3% inflation. The current economist consensus is 3.1% y/y, down from 4.0% in May.


    OOOOHHHHH THE HUMANITY … mother of all reports = 209,000+ jobs & 3.6%


    With eyes now on #CPI next week quite the bounce P&Ds with risk on

    $ES_F ~4433 to 4475
    #NDX ~ 15050 to 15209
    $CL_F ~ 71.20 to 73.26
    Apple $AAPL & Microsoft $MSFT doing their thing
    2-yr note yield down 8bps to 4.93%.
    10-yr note yield up 1bps to 4.05%.


    Dow 33,734.88 -187.38 -0.55%
    S&P 500 4,398.95 -12.64 -0.29%
    Nasdaq 13,660.72 -18.33 -0.13%
    VIX 14.83 -0.61 -3.95%
    Gold 1,931.20 15.80 0.82%
    Oil 73.67 1.87 2.60%


    July 9 – 16, 2023 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… Inflation or
    [See the full post at: Traders Market Weekly: Inflation, Disinflation or Deflation]

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