August 7th Pre-Market Brief

Good Morning

I had this half written before 8:30 and then had to start over. The economy lost 23,000 jobs last month. Not slowed down, lost. Stocks are up on it, because weak jobs means the Fed probably holds rates in September.

Let's dig in...

Today's Big Picture

1. Layoffs Are Rare And Hiring Is Rarer
Payrolls fell 23,000 against 83,000 expected, and May and June were revised down by 103,000 combined. At the same time, jobless claims have run under 200,000 for three straight weeks, something that has not happened since 1969. Companies are holding onto the people they have and not replacing the ones who leave. That is a hiring freeze working through the math, not a downturn.

2. The Hike Question Moved To October
September hike odds fell to 44 percent from 55 before the print, and futures went green on it. October sits at 58.3 percent, higher than September was reading yesterday morning. Wage growth slowed to 3.2 percent annually, the weakest since May 2021, which takes pay pressure off the inflation case. The hawks were arguing about energy prices, not wages, so CPI on Wednesday is still the deciding number.

3. Data Center Work Is Where The Job Growth Is
Construction added 22,000 jobs in July while overall construction spending falls, with the gains concentrated in nonresidential work like electricians. Manufacturing added 5,000, led by computer and transportation equipment. Government shed 53,000 and retail lost 19,000. AI capex is now visible in the payroll data, which makes this report a monthly read on the buildout between earnings seasons.

Market Overview

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Stock Spotlight (pre-market)

Atlassian $TEAM ( ▼ 2.78% )  

Sharply higher on a revenue beat driven by accelerating cloud growth. The forward guide of 13 percent growth sits under the 13.4 consensus, and buyers are paying for the cloud number anyway.

Trade Desk $TTD ( ▼ 6.8% )  

Down hard on a double miss with guidance below the range. Adjusted earnings of 34 cents against 40 expected, revenue of $715 million against $751 million. With the guide light too, full year models get rebuilt lower today, not just the quarter.

Twilio $TWLO ( ▼ 0.01% )  

Higher on the size of the revision. Full year revenue growth was guided at 14 to 15 percent and is now 18 to 18.5, against a 14.8 consensus. A four point raise forces every model on the street higher this morning.

Western Digital $WDC ( ▼ 13.03% )  

Higher after Thursday's round trip, when guidance knocked the stock down as much as 21.5 percent intraday before it recovered most of the loss by the close. Sandisk traded the same shape and is also higher. The results beat on both lines, so the fight is over the guide, not the quarter.

First Solar $FSLR ( ▲ 3.1% )  

Higher after Thursday's executive order put a 15 percent duty on imported polysilicon products with minimum prices on some related imports. The order raises costs on imported supply, which favors panels made domestically. SolarEdge and the Invesco Solar ETF are higher on the same order.

Wendy's $WEN ( ▼ 7.51% )  

Lower after pulling its 2026 outlook. Global sales fell more than 6 percent with the US down 8.2%, and the beats on earnings, revenue and adjusted EBITDA are not carrying the stock.

What to Watch

Upcoming IPO’s?
MarketBeat did an excellent job on this free IPO guide on IPO’s happening this year.

New York Fed Inflation Expectations (Today)
The other release today and the one that gets skipped. It tracks what households expect prices to do over the next year. The hawks on this committee have been reacting to energy, not employment, so this is where oil actually enters the conversation.

Consumer Credit (3:00 PM ET)
June borrowing data, and worth more attention than usual. Retail just shed 19,000 jobs and Wendy's pulled its outlook on falling US sales. If spending is holding up while jobs are not, this shows how it is being financed.

Gold And Silver
Gold is having its best week since January and silver is up close to twelve percent on the week, both at highs not seen since June. The move is running on falling yields, and the two year dropped below 4.17 percent this morning. This is not fear buying, it is rate buying, and it unwinds if CPI runs hot.

- John

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