September 5th Market Overview

Happy Thursday

Two big themes I’m seeing worth mentioning.

1.) Construction quits dropped to 0.9% in July - the lowest since the 2008 financial crisis according to the Fed’s JOLTS data.

Redfin reports the largest seller-buyer imbalance on record in home sales. When construction workers quit their jobs, it usually means they're confident they can find something better. Lots of quits = strong job market. But right now, almost nobody is quitting.

2.) Our energy infrastructure can't keep up with current demand. Server farms and AI are hitting a grid already strained by the financially painful transition from legacy infrastructure to renewables. This triple squeeze is creating investment opportunities.

These inefficiencies could create multi-month or even year opportunities that I’ll be paying close attention too.

Let's dig in...

Today's Big Picture

1. Labor cooling becomes market fuel

ADP showed 54,000 private jobs in August versus 75,000 expected, while initial claims rose to 237,000. JOLTS openings missed at 7.18 million with layoffs rising, and Challenger flagged the weakest August hiring plans since 2009. For the first time in over four years, unemployed Americans now outnumber available job openings.

2. AI momentum pulls tech higher

Amazon $AMZN gained as Barclays noted how Anthropic training on AWS could add meaningful growth. JetBlue $JBLU became the first airline customer for Project Kuiper satellite internet. Services activity improved with ISM non-manufacturing printing 52.0, above July's 50.1.

3. Fed independence under political assault

Stephen Miran faced the Senate while potentially keeping his White House role during Fed service. DOJ opened a criminal probe into Governor Lisa Cook. The administration asked the Supreme Court to fast-track its tariff appeal, warning that delay could leave $750 billion to $1 trillion in collected tariffs before a decision.

Market Overview

U.S. Stock Indexes

Stock Spotlight

Amazon $AMZN ( ▼ 1.42% ) 
gained as Barclays noted Anthropic training on AWS could add meaningful growth.
JetBlue $JBLU ( ▼ 0.2% )
became the first airline customer for Project Kuiper, Amazon's low Earth orbit satellite broadband network.

Salesforce $CRM ( ▲ 2.77% ) 
beat Q2 results but Q3 revenue guidance came in light. The market focused on the softer outlook despite a larger buyback authorization.

American Eagle Outfitters $AEO ( ▲ 0.11% ) 
credited the Sydney Sweeney campaign with customer acquisition across all U.S. counties. Sales dipped but investors focused on the customer momentum.

Western Digital $WDC ( ▲ 1.71% ) 
earned a top buy rating from Morgan Stanley with a 99 target on AI storage demand.

Big Name Updates

Apple $AAPL ( ▼ 0.04% ) 
received an upgrade to Neutral from MoffettNathanson. Morgan Stanley expects higher iPhone prices next cycle for the first time in seven years.

Nvidia $NVDA ( ▼ 2.7% ) 
saw Citi suggest shares may consolidate near-term. Reuters reported Chinese firms continue pushing to buy H20 chips, Nvidia's processors designed for the China market, despite Beijing pressure.

Broadcom $AVGO ( ▲ 9.41% ) 
received a target raise from Evercore ISI ahead of earnings, though valuation runs rich.

Other Notable Company News

T. Rowe Price $TROW ( ▼ 3.01% ) 
and Goldman Sachs $GS ( ▼ 1.43% ) announced a private-markets partnership with Goldman investing $1 billion.

Gap $GP ( ▼ 7.67% ) 
will push Old Navy into beauty this fall while Gap stores add fragrances next year.

ConocoPhillips $COP ( ▼ 2.95% ) 
plans to cut up to 25% of its workforce amid weaker oil prices.

Cleveland-Cliffs $CLF ( ▲ 8.27% ) 
saw U.S. Steel and Nippon Steel dismiss their lawsuit with no financial consideration.

Exxon Mobil $XOM ( ▼ 2.82% ) 
is exploring sales of chemical plants in the U.K. and Belgium.

Sector Watch

Bond Market

Treasurys caught a bid after the labor data with the 10-year yield holding near 4.169%. European and Japanese yields also eased as the market priced softer growth risk pulling term premiums down.

• Setup into Friday: A cooler NFP likely keeps yields contained and supports duration assets

• The market is seeing labor weakness as Fed-friendly rather than recession scary

• Lower yields supported duration-sensitive tech and home-related groups

Policy Watch

Fed Governance

Stephen Miran told Senators he would act independently and might take unpaid leave from his White House role to serve a short Fed term. Democrats questioned independence while Republicans voiced surprise but held fire on opposition.

DOJ Investigation

Justice Department opened a criminal probe into Fed Governor Lisa Cook following public allegations of mortgage fraud. Her counsel stated she "did not ever commit mortgage fraud" in court filings.

Supreme Court Tariff Appeal

• The administration asked for expedited review after lower courts rejected most global tariffs

• Filings warned delay could leave $750 billion to $1 trillion collected before a decision

• Some on the Street expect other statutory paths could keep tariffs in place if this appeal fails

• Bank of America noted Section 122 and Section 338 as potential alternative authorities

Today’s Sponsor

The Key to a $1.3 Trillion Opportunity

A new trend in real estate is making the most expensive properties obtainable. It’s called co-ownership, and it’s revolutionizing the $1.3T vacation home market.

The company leading the trend? Pacaso. Created by the founder behind a $120M prior exit, Pacaso turns underutilized luxury properties into fully-managed assets and makes them accessible to the broadest possible market.

The result? More than $1B in transactions and service fees, 2,000+ happy homeowners, and over $110m in gross profit to date for Pacaso.

With rapid international growth and 41% gross profit growth last year alone, Pacaso is hitting their stride. They even recently reserved the Nasdaq ticker PCSO.

The same VCs that backed Uber, eBay, and Venmo also backed Pacaso. Join them as a Pacaso shareholder before the opportunity ends September 18.

Invest While You Still Can

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What to Watch

Jobs report tomorrow 8:30 a.m. ET (Friday)

Consensus expects 75,000 payrolls and unemployment rising to 4.3%. A modest miss cements a September rate cut; a big surprise swings the whole market.

Broadcom earnings after the bell

AI networking revenue and guidance will signal strength across semiconductor suppliers. Stock trades at 38x forward earnings.

Thanks for reading 🙂

- John