All Of The Buying In Half The Time

September cut hopes spike, metals' run begins, and more from the day.

NEWS
All The Buying In Half The Time

The bull market’s biggest bear, Marko Kolanovic has been bullied off of Wall Street. The chief global markets strategist and co-head of global research at JPMorgan is leaving the bank after two years of poor forecasts. It’s a tough scene for critics, with buyers showing up even on half days to push prices higher. Let’s see what you missed. 👀

Today's issue covers why the market is looking for a September cut, the ratio suggesting a metals run could be starting, and more from the day. 📰

Here's today's heat map:

7 of 11 sectors closed green. Technology (+1.35%) led, & healthcare (-0.76%) lagged. 💚

Amazon shares were down about 1% on news that Jeff Bezos filed to sell another $5 billion worth of shares as prices sit near record highs. That’s in addition to the $8.50 billion in shares sold in February, leaving him with 8.80% of the outstanding stock. 🤑

Southwest Airlines gained 1% after adopting a “poison pill” that activates after an investor acquires at least 12.50% of the company. It’s looking to fend off activist Elliott Management, who has amassed an 11% stake. 💊

Eli Lilly was down marginally despite the U.S. Food & Drug Administration (FDA) approving its new Alzheimer’s treatment, donanemab. 👍

Constellation Brands fell 3% after its earnings beat expectations, but revenues missed expectations by a hair. Overall, concerns about younger generations drinking less and softness in the wine and spirits market remain. 🥴

Constellation Energy rose 2% following reports that it’s in talks with Pennsylvania officials about restarting its Three Mile Island facility. ☢️

Casino operator MGM Resorts International jumped 2% after BTIG initiated coverage of the company with a buy and suggested 25% upside. 🎰

Other active symbols: $TSLA (+6.54%), $GME (+1.63%), $AMC (-3.46%), $KOSS (+158.26%), $ANVS (-16.27%), and $SCLX (-4.66%). 🔥

Here are the closing prices: 

S&P 500

5,537

+0.51%

Nasdaq

18,188

+0.88%

Russell 2000

2,037

+0.14%

Dow Jones

39,308

-0.06%

ECONOMY
Soft Numbers Raise Hopes For September Cut

A slew of economic data hit today and furthered the narrative that the labor market and overall economy are softening. That renewed the market’s hopes to see a rate cut as early as September, so let’s recap what this data said. 👇

The first was the ADP national employment report, which showed that 150,000 private nonfarm jobs were added during June. That’s lower than the 163,000 expected and a downtick from May’s 157,000. 👨‍💼

More importantly, wage growth slowed for the third straight month. Those who changed jobs saw a 7.70% YoY increase, while those who stayed in their jobs saw a 4.90% rise. That’s the smallest increase since mid-2021.

Moving onto activity measures, S&P global services and composite PMIs rose in June, with workforce numbers rising for the first time in three months. However, ISM services PMI fell to its lowest level since May 2020, marking its second month in contraction territory. 📉

U.S. factory orders also unexpectedly fell during May, dropping 0.50% vs. an expected 0.20% rise. And concerns about energy prices continue to ramp up as WTI crude oil prices push back to 2-month highs in the low 80s. ⚠️

Meanwhile, recent Fed speakers and the FOMC Minutes showed that inflation’s downward progress is still not quick enough to consider lowering interest rates. However, some argue that the minutes from last month do not include recent data that shows further labor market and economic weakness.

The combination of this information caused market participants to begin pricing in a more than 66% chance of a rate cut in September. The last time odds were this high was back in May, so we’ll have to wait and see how things adjust with more data. 🔺

Even if the market gets its rate cut in September, it’s unclear whether that will be viewed as a positive or negative for equities. 🤔

Critics say a cut would signal further economic deterioration and likely company earnings. However, bulls argue the “soft landing” case remains intact, with the Fed beating inflation by slowing the economy enough, but not too much…

As always, time will tell. But the market is certainly taking the optimistic view so far as it bids up the major indexes to new highs. 🤷

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