Yahoo Finance’s Josh Schafer joins Asking for a Trend to break down the trading day’s biggest stories.
The markets (^DJI,^GSPC, ^IXIC) remained relatively unchanged ahead of Friday’s jobs report, where analysts expect 185,000 nonfarm payroll adds for the month of May. The report will be part of the economic data examined by the Federal Reserve when weighing its next interest rate decision. Many expect rate cuts to start in September as inflation cools.
On the retail front, GameStop (GME) is rallying on the return of Roaring Kitty’s upcoming livestream and a Reddit post showing an increasing position in the meme stock.
For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.
This post was written by Melanie Riehl
Video Transcript
The S and P 500 dips below the flat line.
On the heels of a record close investors setting their eyes on fresh labor market data.
And Yahoo Finance’s Josh Schaffer joins us now with more on the trading day takeaways.
Hey Josh.
Hey Julie.
Yeah, not a lot to say about today really because stocks didn’t do much.
Quite simply, we’re ahead of the jobs report tomorrow.
The S and P 500 closed one point under an all time high.
So really not a lot happening.
And I want to take a look at why that is and essentially look at what could happen tomorrow.
So we have a chart here with us.
This is taking a look at the relationship between cities economic surprise index and the S and P 500.
Essentially the way to think about this chart is as our line comes down, that means that bad economic news or when economic data comes in lower than expected, softer than expected, that has been good for stocks.
This has been the trend basically over the last month here.
You can see we’ve had fits and starts with this quite a bit through the rate hiking cycle.
But I think this is just to say that over the last week, we’ve really seen a little bit of softer data in the labor market.
Not crazy soft, but the market has liked soft data.
So we’re looking for 100 85,000 non farm payroll ads tomorrow.
Maybe if we come in soft, maybe that’s what the market wants or maybe it wants a strong labor market.
I don’t know, but this has been the trend.
It wants everything.
It wants a strong labor market but low inflation and it wants rate cuts lower rates.
Yeah.
So how are, you know, we that increase, which is interesting to see it has been interesting to watch.
So this is the probability of a fed rate cut in September from the CME fed watch tool.
Currently pricing in a 70 per or roughly 70% chance last week.
It was just 51.
It’s a pretty big move.
We know these odds move a lot.
But it was interesting to me to see this big of a move in a week really off some jolts data, not a lot of data.
It’s not like we had, I guess we had an inflation print last Friday now, but there wasn’t ton of data and of course, no fed speak over the week.
So it’s been interesting to see this move.
And also again, what is the jobs report due to that tomorrow?
And what does the Fed meeting actually do to this expectation.
I mean, you know, when we’re gonna know if there’s gonna be a rate cut in September when J Pal tells us, there’s gonna, I mean, he, he usually signals right.
In other words, it’s not gonna, we don’t have to wait till the day of, usually, usually there’s signaling either the meeting before and, or through fed speak.
But we don’t, I mean, for September still don’t know.
And the question too is, does it matter that much if it’s September or if it’s no, you know, like I think that question is, yeah, we’ve talked to a lot of investors who said it doesn’t matter that much in terms of the trajectory for stocks as long as they’re not cutting because of a dramatic slowing in the economy.
That’s sort of the caveat for all of this.
Well, all of this boring macro stuff is going on.
We still got a guy with a band and who’s gonna talk to us tomorrow.
Apparently, I called this.
Gamestop won’t give up because I was talking to our colleague, Josh Lipton on Monday when Gamestop rallied and then it kind of cooled off and I was like, maybe it’s over, we kind of left the segment with, you know, maybe like this is just it, right, because Gamestop had the rally on Monday, I’ll pull up the charter for us and at the rally on Monday and then it sort of just died down after that.
And I don’t know if I’m gonna have the chart for us.
I think I might have moved to our chart around here.
I’m gonna help you.
I’m gonna help you out here because I know it’s the top training.
So the top training and there will be gamestop.
So there’s Gamestop.
There it is on the day that hey, you wanna do the four day here.
So it’s, here’s, here’s you on Monday saying, well, maybe, maybe it’s gonna go away and then here’s you today.
I’m sure there’s some sort of meme to…
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