• The market selloff accelerated on Monday morning after Friday’s weak US jobs report reignited recession concerns.

 

 

  • The Nasdaq 100 futures dropped deep into correction territory.

 

 

  • The Russell 2000 futures have surrendered their recent gains, experiencing their largest decline over the past three days since the COVID shock.

 

 

  • The market response to earnings has been uneven across sectors.

 

Source: Goldman Sachs; @MikeZaccardi

 

  • Berkshire has been building cash positions amid lofty valuations.

 

Source: @financialtimes   Read full article

 

  • Next, we have some performance data from last week.Sectors:

 

 

  • The unemployment rate jumped

 

 

  • Mortgage rates are sharply lower.

 

Source: Mortgage News Daily

 

  • The yield curve inversion is about to end.

 

 

  • The market is pricing in almost five 25 bps rate cuts this year.
  • The ISM Services PMI returned to growth in July.

 

 

  • The new orders and employment components exceeded forecasts, alleviating recession worries.

 

 

  • Will lower mortgage rates spur demand this quarter?

 

Source: Mortgage News Daily

 

  • Transitions into credit delinquencies continue to rise for both credit card and auto debt.

 

 

  • Student debt delinquencies remain low due to government support.
  • Mortgage foreclosures remain low
  • Currently, the Atlanta Fed’s GDPNow model estimate for Q3 growth is holding at 2.9% annualized, showing no signs of a hard landing.

 

 

  • Initial jobless claims eased last week, alleviating concerns about labor market weakness and recession risks.
  • Wells Fargo’s forecasts for consumer spending, business investment, and unemployment show a slowdown over the next couple of quarters but no recession.
  • The elevated prime rate is putting pressure on small businesses, …

 

Source: BofA Global Research

 

  • … which has been a drag on job growth.

 

 

Market Data

 

  • Will lower mortgage rates spur demand this quarter?

 

Source: Mortgage News Daily

 

  • Some analysts suggest that Monday’s selloff wasn’t about the US employment report, pointing to the global carry unwind instead.

 

Source: Reuters   Read full article

 

  • The Nasdaq 100 held support at the 200-day moving average.

 

 

  • The Magnificent 7 drawdown hit 18% in the latest selloff.

 

 

  • Global smartphone market share of top five manufacturers:

 

 

  • Copper prices continue to sink.

 

 

  • Investors are concerned about the US consumer.

 

 

  • The S&P 500 is in a seasonally weak period.

 

 

  • The “Magnificent 7” market cap has now exceeded that of China’s listed equities.

 

 

Great Quotes

 

“It’s the things you learn after you know it all that count.”

 

– John Wooden in a note to Bill Walton

 

Picture of the Week

 

Joshua Tree National Park

 

 

All content is the opinion of Brian Decker