Stock bulls are trying to regain control as bond yields ease amid signs that more steam is coming out of the US labor market. A continuation of strong job and wage gains despite the slowing economy have been one reason many on Wall Street have walked back expectations for a recession.

However, the strength is problematic for the Federal Reserve's inflation fight as the strong job market has also supported strong consumer spending that has so far held up against ever-higher prices. The Job Openings and Labor Turnover Survey yesterday showed US job openings fell to 8.8 million in July, down from 9.2 million in June and 11.4 million a year ago. The July figure works out to about 1.5 jobs per unemployed worker, which is not too far from the pre-pandemic average of 1.2 jobs per job seeker in 2019 and early-2020 (before the pandemic).

Notably, the "quits" rate, which some economists believe is an even better indicator of job market strength, has now fallen to 2019 levels at 2.3%. The impact of fewer job openings has a significant impact on wage growth, a long-time problem area for the Fed with hourly earnings still up +4.4% year-over-year in July.

Economists believe inflation "neutral" wage growth is in the +3% to +3.5% range but it hasn't fallen below +4% since mid-2021. Economists are anxious to see how the big raises won in new labor deals this year might impact wage gains in the months ahead. Depending on the full reach of the raises and the pressure it puts on other companies to also lift pay, it could create a situation where wages continue to climb even if job gains slow and unemployment ticks up.

ADP releases its private payroll report today with economists looking for a gain of +200,000 versus +324,000 in June. Keep in mind, ADP's estimate for June job gains was almost double the Labor Department's number. Expectations for the Labor Department's August Employment Situation on Friday are for a gain of around +170,000, a slight slowdown from July's +187,000.

Today also brings the second estimate for Q2 GDP (gross domestic product). Economists expect growth to remain unchanged at +2.4%. Advance reads on International Trade and Retail/Wholesale Inventories are also out today. Turning to earnings, Chewy, CrowdStrike, Prudential, and Salesforce are today's highlights. Tech bulls are hoping Salesforce offers up some more information about its artificial intelligence pursuits.

At a June event, Salesforce announced an AI Cloud “starter pack” so investors are interested in seeing those and other AI-generated revenue broken out. If the numbers are big enough, it could reignite the AI-related tech rally that has helped lead stock indexes higher this year.

3M Reaches a $6 Billion Settlement this week to end the largest single mass tort in U.S. history and agreed in June to pay up to $12.5 billion to resolve litigation on so-called forever chemicals. But its legal troubles are far from over. Thousands of people are suing the Minnesota-based manufacturer, alleging that 3M products containing the chemicals known as PFAS made them sick. States have filed lawsuits, too, claiming 3M and other companies contaminated their soil and waterways. Analysts say those cases could add billions of dollars on top of what 3M has already committed to pay to hundreds of municipal water systems allegedly contaminated by PFAS, and thousands of military veterans who claim earplugs produced by a 3M subsidiary failed to protect their hearing. Source WSJ

Apple to Introduce NEW iPhone 15 and NEW Smart Watches on September 12th: Apple Inc. has set Sept. 12 as the date for its biggest product-upgrade event of the year, when it’s set to unveil the iPhone 15 line and next-generation smartwatches.The company announced the plans on its website and via email under the tagline “Wonderlust.” The presentation will be streamed online at 10 a.m. Pacific, with an accompanying event at Apple’s Steve Jobs Theater in Cupertino, California. Source Bloomberg

Grayscales Big Court Win Boosts Crypto: A U.S. court sided with the shop behind the world's largest bitcoin trust, better known by its ticker symbol "GBTC." Grayscale sued the SEC in October, arguing that the regulatory agency's decision was arbitrary and the court agreed. A U.S. court of appeals found that the Securities and Exchange Commission's denying Grayscale Investments permission to launch a spot-bitcoin ETF was unreasonable. "The denial of Grayscale's proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products. We therefore grant Grayscale's petition and vacate the order," court documents filed Tuesday show. Grayscale's win could potentially clear the way for the wave of applications for a spot bitcoin ETF from the likes of BlackRock and Ark Invest that have been filed with the SEC. If ultimately approved, ETFs could end up accounting for 10% of bitcoin's market value within three years, Sanford Bernstein analysts said. Source AXIOS

Where Peak-Season Shipping Is Headed: The period from late summer into fall is usually the busiest time of year in supply chains, as retailers rush clothing, electronics and holiday-season decorations to consumer markets and freight operators look to boost profits on the surging demand. This year’s peak shipping season is arriving with a whimper, however, as merchants and consumer-goods suppliers continue to burn off excess inventories built up during the Covid-19 pandemic and logistics companies cope with tepid volume and freight rates far below year-ago levels. Logistics companies base expectations for shipping demand on how much inventory retailers are holding and how quickly they expect to replenish their stocks. The Logistics Managers Index in July reached its lowest point in the six-and-a-half year history of the measure while inventories were in contraction. Retailers including Walmart, Target and Home Depot say they have made progress in destocking but that they aren’t looking to rush goods to market without clear indications of demand from consumers. Americans are also spending more on services and experiences while pulling back spending on a wide array of goods. The shift in spending and uncertainty is prompting retailers like Macy’s and Dick’s Sporting Goods to pull back on orders. Source WSJ

Subway's Flying Restaurant Will Serve Sandwiches 1,000 Feet in the Air: Subway has moved on from five-dollar footlongs to 180-foot airships. The sandwich chain — which recently offered a promotion tempting fans with a lifetime supply of sandwiches if they legally changed their name to “Subway” — is continuing to push the envelope as it advertises its revamped menu. The brand’s latest move is dubbed “Subway in the Sky,” and is an 180-foot blimp that will carry diners into the air to try the chain’s sandwiches. The aircraft is designed to look like one of Subway’s new menu items, complete with assorted meats, cheese and veggies. The blimp can carry up to seven passengers at a time and will hover at an altitude of 1,000 feet, with each trip lasting approximately 30 minutes. The blimp will be taking passengers up in the following three cities: Sept. 5-7, Kansas City, Missouri; Sept. 19-20, Orlando, Florida; and Sept 24 & 26, Miami area. Source CNBC

Schedule A Call Now

Futures trading is speculative and involves the potential loss of investment. Past results are not necessarily indicative of future results. Futures trading is not suitable for all investors.

Nell Sloane, Capital Trading Group, LLLP is not affiliated with nor do they endorse, sponsor, or recommend any product or service advertised herein, unless otherwise specifically noted.

CTG Daily Commentary is published by Capital Trading Group, LLLP and Nell Sloane is the editor of this publication. The information contained herein was taken from financial information sources deemed to be reliable and accurate at the time it was published, but changes in the marketplace may cause this information to become out dated and obsolete.

It should be noted that Capital Trading Group, LLLP nor Nell Sloane has verified the completeness of the information contained herein. Statements of opinion and recommendations, will be introduced as such, and generally reflect the judgment and opinions of Nell Sloane, these opinions may change at any time without written notice, and Capital Trading Group, LLLP assumes no duty or responsibility to update you regarding any changes. Market opinions contained herein are intended as general observations and are not intended as specific investment advice.

Any references to products offered by Capital Trading Group, LLLP are not a solicitation for any investment. Readers are urged to contact your account representative for more information about the unique risks associated with futures trading and we encourage you to review all disclosures before making any decision to invest. This electronic newsletter does not constitute an offer of sales of any securities. Nell Sloane, Capital Trading Group, LLP and their officers, directors, and/or employees may or may not have investments in markets or programs mentioned herein.