August 7th Market Overview

Happy Friday

Payrolls came in at negative 23,000. The street wanted 83,000. Traders read that as a Fed sitting on its hands in September with no hikes.

Unemployment ticked down to 4.1%, which sounds like good news. It isn't really. That rate only counts people who are actively looking for work, so when someone gives up the search they drop out of the math and the number falls. Fewer people working, better looking headline. I think Sundays deep dive will be about how fudgey these numbers actually are.

Let’s dig in...

Today's Big Picture

1. The Jobs Report Argues With Itself

The economy shed 23,000 jobs in July against expectations for a gain of 83,000. May and June were revised down by another 103,000 combined, so the labor market the Fed looked at last week was better on paper than in reality. Unemployment still fell to 4.1 percent, because people stopped looking for work, not because they found it. Michael Rosen at Angeles Investments said he has never seen this combination before, and that is the honest read.

2. The AI Trade Got Its Week Back

July's worst names led all week. Coherent and Lumentum, both of which took Nvidia money this year, clawed back most of last month's damage, and chips carried the Nasdaq to its best week since spring. Software helped too, after a run of earnings that undercut the idea AI is about to eat the industry. Six weeks of worry undone in five sessions.

3. Gold And Silver Ran Alongside Stocks

Gold is set for its best week since January and silver its best since February. December gold traded as high as $4,380.20 and September silver reached $64.96. UBS told clients it sees gold at $5,000 an ounce in the first half of 2027. Metals running while stocks make new highs usually means someone is hedging the dollar, not the economy.

Market Overview

Index Performance

Stock Spotlight

Atlassian $TEAM ( ▲ 35.81% )  
beat on fourth-quarter revenue and earnings and guided the current quarter above what analysts wanted. Cloud growth was the whole story.

Airbnb $ABNB ( ▲ 17.34% )  
earned $1.37 a share on $3.61 billion in revenue, past estimates of $1.25 and $3.58 billion, and raised its full-year revenue and margin outlook. Brian Chesky said nearly half of guests who deal with an AI agent never need a person, and first-time bookers are growing at the fastest pace in four years. The stock hit a four-year high.

Under Armour $UAA ( ▼ 5.08% )  
now expects revenue to fall at a mid-single-digit rate this year, worse than the slight decline it guided to before. North America, its largest business, brought in about $610 million last quarter. Kevin Plank's turnaround is two years old and the numbers still have not turned.

Big Name Updates

SpaceX $SPCX ( ▲ 15.95% )  
rose again as the wave of insider selling everyone braced for after the lockup expired never showed up. Retail is buying, short sellers are leaning on it, and shares are still under the IPO price.

Alphabet $GOOGL ( ▼ 0.77% )  
disclosed its stock holdings, and the largest by a mile is SpaceX at 551 million shares, worth about $71.56 billion. Planet Labs, AST SpaceMobile, CME Group and Arm round out the top of the list.

Boeing $BA ( ▲ 1.15% )  
had its best week since April. The FAA cleared the 737 Max 7 on Monday after years of delay, and BNP Paribas moved the stock two notches to outperform.

Other Notable Company News

Cloudflare $NET ( ▲ 4.57% )  
guided both the current quarter and the full year above expectations.

Twilio $TWLO ( ▲ 25.98% )  
sees $1.42 to $1.47 a share on revenue of $1.51 billion to $1.52 billion, ahead of consensus, and raised its full-year growth outlook by about four points.

Maplebear $CART ( ▲ 11.48% )  
, the Instacart parent, posted higher revenue on stronger order volume.

Take-Two $TTWO ( ▲ 6.05% )  
beat on revenue even as losses widened after it killed a game in development.

Wendy's $WEN topped revenue estimates, cut its dividend and pulled its 2026 outlook. CEO Bob Wright says a turnaround plan comes at the next quarterly update.

First Solar $FSLR ( ▲ 3.42% )  
moved higher after the White House hit Chinese polysilicon with new tariffs.

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Sector Watch

Bond Market

Yields fell across the curve after the payrolls miss, and the front end led. The two-year dropped below 4.17 and the ten-year sat near 4.65. The thirty-year eased to 5.18%, one week after touching its highest level since 2007. The dollar slipped too.

Policy Watch

Fed

Kevin Warsh's committee held rates last week, with three of twelve officials voting to raise. Warsh said the Fed is doing considerably less well on inflation than on employment. Today's number takes some steam out of the hike camp without settling the argument.

• Futures flipped to favoring a hold in September, close to a mirror image of where they sat Thursday.

• Two bright spots in the details. Construction added 22,000 jobs on data-center work, and manufacturing added 5,000.

• Wage growth came in softer than expected. BMO put the annual pace at its slowest since 2021, and that is the line that matters most for the inflation fight.

Fiscal & Trade

The White House put tariffs, price floors and minimum import prices on Chinese polysilicon, the main input for solar panels. China made the overwhelming majority of the world's supply in 2024, so this reprices the entire chain. Korean makers Hanwha Solutions and OCI Holdings rallied on it.

• The administration also blocked tungsten and battery waste exports to keep more raw material at home.

International

Iran and Oman are still apart on what it should cost to move a cargo through Hormuz. Iran wants a cut of the cargo value, Oman has floated less than half that, and Washington wants no fee at all. Four industry sources told Reuters the structure is hard to execute anyway because of sanctions and insurance clauses.

• The yen has given back part of last week's intervention gains, trading near 158 to the dollar against a 40-year low close to 164.

What to Watch

The AI company quietly automating every Walmart distribution center. 
23 billion in orders on the book.

It's just one of seven names in this free MarketBeat report.

New York Fed Inflation Expectations

Out today. One-year expectations ran near 3.67 last month. If consumers start bracing for higher prices, the hawks get their argument back no matter what payrolls do.

Hormuz Fee Talks

Oil already trades like a deal is coming. The gap between Iran's ask and what Washington will accept is the whole trade, and nobody has put a timeline on it.
- John

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