1. The U.S. Job Market Is Slowing, But Not Breaking
The U.S. economy added 57,000 jobs in June, while the unemployment rate edged down to 4.2%, remaining largely unchanged.
But the real story was buried at the bottom of the report. April and May job numbers were revised lower by a combined 74,000 jobs.
One thing is becoming clear: the pace of job creation in the U.S. has slowed significantly. However, leading indicators such as the JOLTS report suggest the labor market isn’t falling apart.
On top of that, weekly unemployment claims remain relatively low.
So, while the job market is cooling, it isn’t showing signs of a major breakdown—at least not yet.
2. Memory Stocks Remain the Market’s Wild Card
South Korea’s KOSPI Index slipped overnight, largely because of weakness in memory-chip stocks.
There were fears that today’s market would open to a bloodbath. Instead, things have remained relatively calm so far (as of pre-market).
It’s important to understand that the moves we’ve seen in memory stocks have been anything but normal. These kinds of gains are extremely difficult to sustain over long periods, and the trade has become incredibly crowded.
The market understands that. That’s why when these stocks have a red day, the declines are often sharp. The same goes for the green days.
If you are participating in this trade, might be a good idea to NOT bet your rent.
3. The S&P 500 Did Exactly What We Expected
We’ll start this one by saying: “Told you so.”
The S&P 500 found support right at its 50-day moving average and has continued moving higher. Now, the next major level to watch is 7,600.
If that breaks, another rally into the end of summer becomes increasingly likely.
One additional observation from years of watching markets: the summer months—particularly May, June, and July—are often relatively calm. During this period, investors are usually better off following the trend rather than fighting it.
Once August arrives, things can sometimes become much more volatile.
4. Gold Keeps Defending the $4,000 Level
The $4,000 level continues to act as strong support for gold.
Yesterday, gold briefly dipped below that level before buyers stepped in and quickly pushed prices back higher.
At the time of writing, gold is trading a little above $4,100.
One thing we’ve been paying close attention to over the past several days: Gold rallies continue to fade. In other words, gold often moves higher during the day but gives back much of those gains before the close.
That could suggest a lack of conviction among buyers.
Today’s weaker-than-expected jobs report may provide some support. But, we’re also closely watching bond yields and the U.S. dollar, as both have been major drivers of gold prices recently.
5. Bitcoin Holds, the Yen Swings & Inflation Noise Returns
Bitcoin continues to find buyers in the $60,000-$61,000 range. Let’s see if that support continues to hold.
Meanwhile, the Japanese yen made a significant move lower before recovering to around 160 against the U.S. dollar, after trading as high as 162. At this point, there’s no confirmation whether the move was driven by Bank of Japan intervention or simply a reaction to the U.S. jobs report. Either way, it’s worth watching.
Meanwhile WTI crude oil has fallen below $68, bringing prices close to pre-war levels.
Lastly, inflation chatter remains everywhere. Sometimes, the narrative itself can influence markets, even before the data does. One thing to remember, though: consumers don’t have the same spending power they did during the pandemic years.