“Oh no” they screeched from their desks as they powered through a summer Friday, “markets are starting to dump!”
“My gains are gone!”
“Is this going to get worse!”
“Jobs numbers got revised again!”
Might be the only time I have done 4 posts in a week, but given the macro and markets developments I think it is merited.
The July jobs report just came in far weaker than expected, with only 73,000 new jobs added: the slowest pace in over two years.
Anyone paying attention to stories from friends, family, and colleagues KNOWS without “official” data, that the labour and job market is not in a good spot. This ongoing trend of revisions that has transcended administrations is disturbing to say the least but shouldn’t be totally unexpected given the politicization of fiscal policy since Covid.
Unemployment ticked up to 4.2%, and wage growth held steady, but the real story was in the revisions: May and June job gains were slashed by a combined 258,000, revealing a troubling trend of overestimated strength in the labor market.
Markets are responding negatively — crypto is selling off with (with nearly $800M liquidated in the last 24 hours) and equities are tanking as well, the S&P 500 is down 1.61% and the Nasdaq is down over 2% as of 11am ET. Several of the big tech winners from earlier this week are now dumping.
To cap it all off President Trump announced he is positioning nuclear submarines in the appropriate regions after more tension with Russia.
The vibe appears to have shifted…..
However there is a silver lining here for those who don’t lose their heads and puke up their afternoon salad or Dos Toros burritos. We can decipher the Fed’s next move based on some of the data and patterns that we are seeing, which gives those who want to pay attention the chance to get ahead of the masses.
There’s a handful of things I am buying today on this dip and an equity angle I am starting to scale into that I suspect starts to pay off big in the coming months.
You need to ask yourself a few questions at this point:
Am I willing to bet the Federal Reserve caves?
Am I comfortable buying the dip AGAIN and holding my conviction strong?
Which bets am I going to size up to take advantage of what I know is coming?
For the sake of our bags let’s talk about what’s going to happen next, it’s not worth go blind into the weekend with so much at stake.
The market’s job is to shake out the weak before it rewards the disciplined. Most will flinch, fold, and fade into regret—because conviction is costly, and hesitation is cheap. But only one of them builds wealth
