Ringside · Post-Bell · August 5
- Hiring at private employers slowed to 44,000 in July, the softest month since January.
- Blue chips set a record at 54,349.12 while the Nasdaq Composite fell 0.83%.
- Gold closed at $4,308.00, up 3.74% against Tuesday's $4,152.60 settle.
Indexes
One number at 8:15 this morning did most of the work. ADP counted 44,000 private jobs added in July, well short of the 70,000 in the Reuters poll and the softest month since January, and traders promptly cut the odds on a September rate increase to 56.9% from 67.2% a day earlier, per CME FedWatch. Money went where a less aggressive Federal Reserve sends it, which today meant bullion, drug makers and miners. Blue chips took that trade furthest, to a record 54,349.12 and a fifth advance in a row, with a separate boost from Nvidia's 3.43% gain after Elon Musk said SpaceX would build its artificial-intelligence computing on Nvidia processors exclusively. Underneath it, the S&P 500 touched 7,793.68 in the morning, an all-time intraday high, then spent the afternoon handing it back to finish at 7,723.55. The Nasdaq Composite never recovered, ending 0.83% lower as Alphabet dropped 4.03% on a reshuffle of its artificial-intelligence leadership. Four sessions of gains on the Composite ended there.
| Index | Close | % Chg | Note |
|---|---|---|---|
| S&P 500 | 7,723.55 | -0.17% | Intraday high 7,793.68 |
| Nasdaq Composite | 26,363.44 | -0.83% | Four-day run ends |
| Dow Jones | 54,349.12 | +0.49% | Fifth straight gain |
| Russell 2000 | 3,019.19 | -0.59% | Off a 3,048.85 morning high |
| VIX | 15.81 | -4.18% |
Sector Heat Map
| Sector | % Chg | Sector | % Chg |
|---|---|---|---|
| Health Care (XLV) | +1.27% | Staples (XLP) | -0.05% |
| Materials (XLB) | +1.23% | Technology (XLK) | -0.53% |
| Discretionary (XLY) | +0.30% | Utilities (XLU) | -1.02% |
| Financials (XLF) | +0.21% | Communications (XLC) | -1.04% |
| Real Estate (XLRE) | +0.07% | Energy (XLE) | -2.07% |
| Industrials (XLI) | -0.03% |
Five up, six down, and the split turned on who gains from less tightening rather than on offense versus defense. Health care led on Eli Lilly's results and materials on the metals move, while energy fell with crude for a third day.
In the News
Rates, FX, Commodities
Treasuries barely acknowledged the jobs figure, which is its own comment on how much a single private-payrolls estimate is trusted two days before the official one. The five-year eased to 4.324% from 4.333%, the ten-year to 4.617% from 4.627% and the thirty-year to 5.174% from 5.190%, roughly a basis point and a half at the long end.
| Treasury | Yield | Note |
|---|---|---|
| 5-Year | 4.324% | |
| 10-Year | 4.617% | Third decline in a row |
| 30-Year | 5.174% |
Metals did the reacting instead, and the case for bullion is arithmetic rather than fear: crude has given back roughly a tenth of its value in a week, which pulls down the inflation forecasts that would justify another Fed increase. West Texas Intermediate closed at its lowest in almost a month.
| Commodity | Settle / close | % Chg | Note |
|---|---|---|---|
| Gold | $4,308.00 | +3.74% | December contract |
| WTI crude | $75.22 | -0.73% | Third consecutive decline |
| Brent crude | $79.45 | +0.11% | |
| Natural gas | $2.673 | -0.34% |
| Currency | Level | % Chg |
|---|---|---|
| Dollar index (DXY) | 99.69 | -0.11% |
| EUR/USD | 1.1555 | +0.17% |
| USD/JPY | 157.75 | +0.02% |
Technicals
Nothing structural changed in a 12.97-point decline. Both near-term averages on the broad index remain far below today's close, at 7,507.98 on the twenty-day and 7,485.68 on the fifty-day. The more interesting mark is the one set and abandoned this morning: 7,793.68 intraday, with the close 70.13 points beneath it.
Technology's index is the laggard. At 26,363.44 the Nasdaq Composite holds 416 points clear of a fifty-day average at 25,947.52, yet it stays 730.46 points under the 27,093.90 it closed at on June 2. Every other major index has taken out its high this week; this one has not. Small caps reached 3,048.85 in the morning before giving all of it back.
Yields are compressing toward the bottom of a five-week range. The ten-year now sits 12.8 basis points under the 4.745% it reached on July 31, with little on the charts between here and roughly 4.53%.
Breakouts & Breakdowns
Breakouts
Nvidia (NVDA) — $219.22 sits above a twenty-day average of $205.36 and a fifty-day of $205.76, both of which the shares lost during July. Overhead is $235.74, the best close of the past twelve months, set on 14 May.
Shopify (SHOP) — $144.24 clears a two-hundred-day average of $132.75, a line the shares had been beneath since spring. Best close of the past twelve months: $179.01.
Breakdowns
Advanced Micro Devices (AMD) — $482.05 lost a twenty-day average at $510.04 and a fifty-day at $514.62 in one session, confirming yesterday's after-hours reversal on the daily chart. Nothing else shows up on the chart until roughly $430.
Uber Technologies (UBER) — $68.18 sits under all three of its major averages, the nearest being the twenty-day at $71.30. That leaves the shares $2.77 above a 52-week low of $65.41.
SpaceX (SPCX) — $108.27 is the weakest close since the June listing, below the $108.37 of 31 July. Beneath it sits a shelf of intraday lows between $107.01 and $107.81 from late July and today, and then Monday's $104.83.
Top Movers
Gainers
Shopify (SHOP) +16.98% to $144.24. Second-quarter revenue of $3.58 billion beat the $3.45 billion consensus and grew 34%, adjusted earnings came in at $0.42 versus $0.40, and gross merchandise volume rose 32% to $115.57 billion. The guide moved the stock: management pointed to third-quarter revenue growth in the low thirties where analysts carried 26.3%. Shopify attributes part of that to orders arriving through artificial-intelligence shopping agents, which it says have roughly tripled.
Eli Lilly (LLY) +4.86% to $1,169.86. Revenue of $23.0 billion rose 48% on Mounjaro and Zepbound volumes, and management raised the full-year range to $85 billion to $87 billion from $82 billion to $85 billion. A $3.03 charge for acquired research more than absorbed the $2.78 of underlying per-share improvement.
Walt Disney (DIS) +3.65% to $101.76. Adjusted earnings of $2.06 a share cleared the $1.86 estimate on revenue of $25.25 billion, slightly shy of $25.4 billion. Entertainment streaming revenue rose 11% to $5.53 billion and Experiences produced $3 billion of operating income, up 20%.
Nvidia (NVDA) +3.43% to $219.22. Musk's commitment to Nvidia silicon was worth more to the shares than anything in the chip maker's own filings this week.
Losers
SpaceX (SPCX) -13.61% to $108.27. Capital spending of $18.37 billion, a sixfold increase, alongside a $541 million net loss, is what investors fixed on. Revenue of $7.81 billion rose 92% and passed the $6.93 billion modelled. Yahoo Finance reports that 20% of the eligible insider shares come free of lock-up restrictions this week.
Advanced Micro Devices (AMD) -7.04% to $482.05. The quarter beat on both lines and the data center segment doubled, but one strategist summarised the reaction by noting that holders wanted exceptional results and received merely excellent ones. Lisa Su's guide to better than 80% server processor growth in the second half did not change the arithmetic on the multiple.
Uber Technologies (UBER) -5.29% to $68.18. Earnings of $0.81 matched and gross bookings of $58 billion grew 24% and beat, but revenue of $14.19 billion missed $14.24 billion and the third-quarter bookings guide arrived at a $59.25 billion midpoint where the street carried $59.33 billion.
Alphabet (GOOGL) -4.03% to $362.43. Google restructured the leadership of DeepMind, moving Demis Hassabis to chair of the unit and chief scientist for Alphabet, with Koray Kavukcuoglu taking day-to-day charge and reporting to Sundar Pichai. Chief scientist Jeff Dean is leaving with several senior researchers, which is the part most coverage led with. Reorganisations at the top of a research group get read as a comment on the pace of the work.
Key Macro Data Today
| Release | Actual | Consensus | Prior |
|---|---|---|---|
| ADP private payrolls, July | 44K | 70K | 95K |
| ISM services PMI, July | 54.1 | 54.5 | 54.0 |
June reads 95,000 after revision, down from the 98,000 first published, so the deceleration is steeper than it looks. Services activity nonetheless stayed in expansion for a twenty-fifth month, which is what keeps the hawkish case alive: Kansas City Fed President Jeff Schmid argued this week that policy is still not restrictive and inflation remains too high.
Notable Earnings This Session
Weighted almost entirely toward the morning today.
Pre-Open
Five companies reported before the bell: Walt Disney, Eli Lilly, Uber, Shopify and Western Digital. Every one of them moved more than 3%, in both directions.
Post-Close
AppLovin and SanDisk report after today's close. AppLovin ended the session at $417.80, still far below its high of $745.61.
Drivers
- Weekly jobless claims arrive at 8:30 ET, and for once the low-attention release has an audience. Two soft labour readings in three days have moved September pricing more than ten points, and a third would leave Friday's payrolls report needing a real upside surprise to put a rate increase back on the table. Schmid's argument this week ran the other way, and he is not describing the same economy the bond market is.
- Tomorrow brings the market's verdict on tonight's two reports. Both land in the part of the market that has spent the week separating the companies collecting money from the companies spending it. Shopify was rewarded for the first; SpaceX and AMD were penalised for the second.
- The Hormuz announcement has been one or two days away since Monday, and the expectation is already in the price at a $75.22 settle on West Texas Intermediate. Tehran's own state broadcaster spent Wednesday lowering expectations for what the Oman route actually delivers, which is the first public sign this week that the two sides are describing different agreements.