MARKET WRAP

Stocks logged another low-volatility grind higher, with the SPX back to all time highs into the next two day’s inflation data. Today’s move also shrugged off more negative revisions on the past year+ employment picture. Small caps took a breather as yields had a minor bounce. On the day: SPX +0.3%, QQQ +0.3%, IWM -0.6%.

Elsewhere, the US10YY bounced a bit, back to 4.08%. Gold was a touch lower with the dollar a touch higher. Oil was slightly higher. The VIX is now 15.04 with near term vol even lower into PPI/CPI.

Notable Gainers: UNH +8.6%, GS +3%, JPM +1.7%, NVDA +1.5%, PLTR +4%, AMD +3%

Notable Losers: HUM -12%, SHOP -2%, AVGO -2.6%, AAPL -1.5%, FCX -6%, DG -3.6%

After hours: ORCL is up 22% after a consensus miss but really strong guidance. Both SPY and QQQ are higher after hours.

• RiskReversal Pod: Dan is joined by Peter Boockvar to discuss the latest jobs data, the upcoming inflation numbers, stock market valuations as the S&P 500 adds new names, plus some “boring” tickers worthy of a look.

MRKT MATRIX: TODAY’S TOP STORIES

• Stocks close at record highs despite job worries, looming inflation reports (CNBC)

• Microsoft to Buy AI From Anthropic in Partial Shift From OpenAI (The Information)

• Intel’s Tan Appoints New Leaders for Data Center, PC Chip Groups (Bloomberg)

• Online travel platforms prepare for rise of artificial intelligence ‘agents’ (FT)

• Private equity giants raid Wall Street as fundraising talent wars heat up (CNBC)

• The Renewed Bid to End Quarterly Earnings Reports (WSJ)

• Wall Street Courts Retail Traders to Supercharge IPOs (Bloomberg)

• Exclusive: Retail investors sour on Big Tech — except 2 stocks (Axios)

WHAT’S NEXT?

Today’s move higher in equities came despite a sizable negative revision to the unemployment picture over the past year+, far exceeding consensus expectations. It reinforces the argument that the labor market has been weaker than previously thought. If that trend persists in upcoming reports, we’re likely to see a more aggressive Fed response. For now, traders aren’t waiting on confirmation. Rate-cut expectations have been steadily rising the past two weeks. Today’s data was pre-tariffs. And the obvious wildcard is whether the Fed will now be more aggressively cutting into an higher inflationary backdrop, something far from typical. The inflation picture of course gets a fresh update starting tomorrow morning with the August PPI (8:30am).

Last month’s hotter-than-expected PPI caught markets leaning the wrong way, because it came after a on consensus CPI. This week the release of the two numnbers is in reverse, beginning with the PPI. Consensus is for a 0.3% month-over-month and a 3.5% year-over-year. Traders are showing very little concern—options are only implying a 0.4% move for tomorrow’s session. CPI the next day is priced for slightly more action, though not much. It may reflect a view that traders want both inflation numbers in hand before reacting—or simply that 6500 on the SPX has become a magnet and it’s going to take a lot to send us from this level in any aggressive manner. Either way, a cooler or hotter print could catch positioning offsides.

• Wednesday, Sept 9th

  • Pre-market: CHWY 8.5%

  • 8:30am - PPI (0.3%, 3.5%)

  • SPX Expected Move: 0.4%

  • TLT Expected Move: 0.6%

TODAY’S EPISODES

Watch RiskReversal Podcast’s newest episode: The Case for "Buying Boring" When Stocks Gets Expensive

In the latest RiskReversal Podcast, Dan Nathan and ⁠Peter Boockvar⁠, CIO at ⁠OnePoint BFG Wealth Partners and editor of The Boock Report⁠, delve into a gamut of financial topics. They discuss the recent August jobs data and changing dynamics within the S&P 500, including the addition of Robinhood and AppLovin. They analyze the impact of these changes on index funds, noting the risks of high valuations. The conversation then shifts to notable movements and future prospects of major tech stocks like Nvidia, Tesla, Microsoft, and others amidst increasing competition and investment in AI. Peter shares semi-contrarian investment ideas in non-cyclical consumer non-durable stocks such as Conagra and Nestle, highlighting their defensive nature and potential dividends. The dialogue concludes with a broader discussion on economic data, inflation, and potential Fed rate cuts, emphasizing the market's readiness for various scenarios.

Learn more about our sponsor Current and RBC Capital Markets.

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