Video summary
The market opened with a significant shift in sentiment following the release of weak employment data for July, which saw a loss of 23,000 jobs alongside downward revisions to previous months' figures. This unexpected negative news initially sparked a rally as investors interpreted it as "good" because it suggests economic conditions are not strong enough to warrant further interest rate hikes by the Federal Reserve. Consequently, bond yields dropped and stock prices rose, with market expectations for future Fed actions adjusting significantly; the probability of no rate change at the next meeting jumped from 33% a week ago to over 56%. Despite this initial relief rally, longer-term Treasury yields quickly snapped back up, indicating that while short-term fears have eased, underlying inflation concerns remain persistent.
In response to these economic signals and a weakening dollar, precious metals experienced notable gains as investors sought safe-haven assets. Gold surged above the $4,400 mark with a gain of 2.4%, driven by its ability to break out of recent downtrends on high trading volume, while silver followed suit with an even stronger performance up over 3%. The volatility index, known as the VIX, also found support at historically low levels near 15, reflecting reduced immediate fear in the market despite ongoing economic uncertainty. This divergence between equity markets reacting to job data and commodities responding to currency weakness highlights a complex trading environment where different asset classes are moving on distinct drivers related to inflation expectations and monetary policy outlooks.
Beyond traditional safe havens, specific technology and growth stocks demonstrated remarkable resilience and strength today. Airbnb posted an impressive 15.6% gain after breaking above its previous highs from the post-pandemic era with substantial volume, signaling renewed confidence in the travel sector. Similarly, SpaceX shares rallied by more than 13%, trading near their all-time highs following a recent earnings report that showed decent revenue growth despite some initial concerns about valuation timelines based on future projections. These moves underscore a market willing to embrace high volatility and long-term compounding potential in select equities, provided investors are prepared for the inherent risks associated with such aggressive growth strategies rather than relying solely on stable retirement funds.
Looking ahead, traders will be closely monitoring upcoming inflation data from CPI reports scheduled for release later this week, as these figures could further influence Federal Reserve policy decisions and market direction. The labor force participation rate has also emerged as a concerning metric, dropping to its lowest level since early 2021 even as the unemployment rate ticked down slightly, serving as a warning sign of potential structural issues in the labor market that may not be fully captured by headline job numbers alone. As the trading day concludes with markets still green and volume remaining robust on key breakouts, investors are left weighing whether this strength is sustainable or merely a temporary reaction to bad news before facing fresh challenges from inflation data tomorrow.
Read the full video transcript
[music]
Good Friday [clears throat] afternoon
everybody. Tommy O'Brien coming to you
live from TFN. Thanks for joining me for
the final 60 minutes of the trading day.
And we got a jobs Friday, folks. And why
not? We'll kick it off because we got
quite a headline with Yeah. losing
23,000 jobs in the month of July. And
when you talk about revisions May and
June, 103,000 fewer jobs. So you talk
about a potential gain of 83,000 was
what the market's looking for. We lose
23,000 and you revise down by 103.
That's a net number of 200,000 less jobs
than the market was thinking might be
possible this morning. So what happens
from there? Well, the market rejoices
cuz bad news was good news initially.
We're getting a little bit of a pop
right now coming into the final hour of
trading. yields. All right, give up some
of the yields in terms of immediately
higher price, lower yield on a weak jobs
number. Okay, the market figuring, you
know what, if we got a weak jobs number
like this, maybe the Fed, we should pull
some of those hikes out of the forward
path in terms of what the market's
expecting. Now, we have pulled some of
those hikes out. You look at the CME,
okay, Fed fund futures, the Fed watch
today,
56% chance they do nothing at the next
meeting. Yesterday, it was only a 45%
chance and a week ago that was only a
33% chance. So, yeah, the market is
thinking, but that's on a 2-year basis,
and the 10ear snaps back right away,
which is remarkable. Now, the 10ear
right now, we got a yield of 4.66.
Okay, 4.66 is the number on the 10ear.
You got a dollar right now at 9953
and we got markets in the green. And how
about the VIX, folks? Okay. Wouldn't
expect any fireworks today in the final
52 minutes of trading as in any type of
remarkable selloff when you have a VIX
that just hit 1477.
How about that one, man? 1477.
Take a look at the VIX on a longerterm
basis. Yeah. What are we going back to?
This is below everything we've seen
recently at a low of 1496 recently.
You got to go back to early January.
Pretty remarkable. VIX trading at 1485
right now. Now with a weaker dollar and
it's, you know, yields, right, snap
back. But how about dollar weakness
persisting? Okay, dollar dives lower and
it holds on to those lows and you're
engulfing the last four days, almost 5
days of trading. We're at 9953 right
now. You're right back to the lows in
the middle of June.
And yeah, gold was already in the green
coming into that 830 number. You catch a
little bit of a pop and we're above
4,400. Gold up 2.4% right now. You got
silver up a similar uh a little bit of a
bid up 3.5% for silver 6380. And how
about excuse me, the GDX.
Okay, you're talking about a run, folks.
We were just flirting with $70. We're at
90. This thing's up 30% in the last
what, three weeks or so. Decisively
breaking out of the downtrend channel.
How's that for a weekly sign of
strength?
Don't get left behind, folks. Not too
late. Put some stops in there, but this
is some strength, man. You break out of
the channel, you do it with volume. The
GDX on a weekly basis, 132 million, and
we got a full hour to go with volume on
the close. Ah, we probably won't get 10
million to get above.
Okay. It's going to be a strong bar
though. And today, last few days in
particular, right, look at this volume,
man.
And yeah, we'll see what we do on the
close. Let's see if you back it up.
Yeah, look at this. Wednesday, you did 6
million on the close. Okay, we need
about 10 million on a weekly basis in
the final hour of trading to get over
this bar right here. But nonetheless,
strength in gold. We take a look at the
silver contract right now.
Not quite. We don't have volume on the
weekly on that one just yet. Let's take
a look at the daily.
Come on, Thinker Swim. Let's go.
How fast is this market moving? Let's
go.
Oh,
my connection's working. That's what my
computer's telling me, folks. But
thinker swim not cooperating right now.
All right, while we wait for it to catch
up. So, check out the jobs. Okay.
How's that for a trend, folks? Right.
You're talking about non-farm payrolls.
We just got numbers for July. Okay, May
and June revised downward and April and
May, I mean May, June, July, excuse me,
April, May, June.
No. Yeah,
March was the big month. Okay. And then
April, May, June, and July we go
negative.
So the unemployment rate goes down to
4.1%.
But at the same time, the labor force
participation rate, folks, is the lowest
it's been since February of 2021. That
is a warning sign
along with some others. Okay? But that's
a warning sign. Now, the inflation data
is going to be important. We get the CPI
coming up.
and yeah, revisions, right?
June and July.
We'll see what happens. Nonetheless,
labor force participation rate going
back to February of 2021. That one
surprises me. [snorts]
All right, we jump around to some other
equities that are moving. How about
Airbnb today, man? Up 15.6%.
Travel alive and well. How's that for a
weekly, right? You break above the highs
of 2024,
excuse me, 2025 and 2024. You do it in a
weekly and you do it with volume, man.
Now, this thing's got highs hanging out
here at 212. Is that the high? [snorts]
Yeah. Then shortly after their IPO, I
mean, what a time, right? markets were
alive, COVID stimulus alive, Airbnb goes
public, the market's rejoicing, and then
of course there's a pullback, there's a
cooling, the Fed's trying to get
inflation under control. And here we are
still under those numbers, but
nonetheless, up today, up 16% for Airbnb
and yeah, doing so with volume.
And how about SpaceX, man?
Okay,
you know, we were talking about on this
show, folks. This was a story of sell
the rumor, buy the news, and boy, you
talk about a shakeout, man. Okay, the
numbers were pretty decent. Now, Elon,
they're they're going to spend money.
That's that's they're going to spend it.
They're going to spend tons of it, but
they were beaten a little bit in terms
of the early pace of some of their
revenue. If they beat on the early side
of the revenue projections, that's a
monumental compounding win, right? The
numbers that this company's getting
valued off, can't even believe I'm
talking like the bullish side here,
okay? But the numbers they're getting
calculated on are years into the future.
And when you're compounding growth years
into the future,
how you do early on is so instrumental
to those later years when you're
compounding that growth. And so if
you're willing to ride a roller coaster,
that might be insanity in terms of
volatility wise. And you better be
willing, you know, do not put retirement
money that you can't lose into this
equity, folks. It's the ultimate growth
equity. But how about today, man? Up
13.3%.
All right, we're above. You could have
bought SpaceX coming into the close
right before their earnings at about 125
bucks.
You drive down to 105 yesterday morning
and I say, "Hey, by the close of action,
you're going to be pushing 130." And
here we are up 13%. Come right back,
folks.