Shocking Jobs Report

Please click here for an enlarged chart of SPDR S&P 500 ETF Trust (NYSE:SPY) which represents the benchmark stock market index S&P 500 (SPX).

Note the following:

  • The chart shows buying in the early trade in the stock market.
  • The chart shows the stock market continues to levitate above zone 1 (support) after a technical breakout.
  • This morning’s early stock buying is triggered by the following:
    • Jobs report shocker
    • Iran hopium
    • Stabilization in South Korea
  • The jobs report is a shocker as the economy lost jobs.  Here are the details:
    • Headlines nonfarm payrolls came at -23K vs 86K consensus.
    • Private nonfarm payrolls came at 30K vs 69K consensus.
    • Average hourly came at 0.1% vs 0.3% consensus.
    • Unemployment came at 4.1% vs 4.2% consensus.
    • Average work week came at 34.3 vs. 34.3 consensus.
  • Of particular interest is that hourly wages rose by only 0.1%.  White collar wages have been pressured downwards by AI.  At this time, it is not clear what is driving down hourly wage growth.
  • The reason the stock market is celebrating the loss of jobs is the belief that this job number will prevent the Fed from raising rates.
  • In our analysis, prudent investors should have a broader perspective than just this jobs report.  Inflation pressures are not only due to the Iran war but also due to demand that has been generated by massive capital spending on AI. 
  • Both the U.S. and Iran are sending positive signals that the end of the war is near.  Iran hopium is bringing in buying in the stock market.
  • Prudent investors should pay attention to the information that is coming out — it is concerning for investors in the long term.  Iran and Oman are close to a deal in which traffic will flow one way close to Iran’s coast and the other way close to Oman’s coast.  Apparently Iran will have the right to charge voluntary fees.  Voluntary fees are oxymoronic but appear to be designed to appease President Trump, who does not want Iran to charge any fees.
  • There are also reports that Iran wants to ban U.S. and Israeli ships from entering the Strait of Hormuz.
  • In our analysis, if the reports about the deal from Iran are correct, in spite of the U.S. declaring victory, the U.S. would be handing de facto control of the Strait of Hormuz to Iran.  This will likely be negative for the stock market in the long term, but in the short term, the stock market will likely rally on any headline of a deal.
  • The stock market in South Korea has stabilized.  Lately, the U.S. stock market, especially semiconductor stocks, have been following the South Korean stock market. Stabilization in South Korea is bringing buying into U.S. semiconductor stocks, especially in memory stocks Micron Technology Inc (NASDAQ:MU), SK Hynix Inc – ADR (NASDAQ:SKHY), and SanDisk Corp (NASDAQ:SNDK) as well as in disk drive stocks Western Digital Corp (NASDAQ:WDC) and Seagate Technology Holdings PLC (NASDAQ:STX).
  • Also adding to the positive sentiment is that yesterday Space Exploration Technologies Corp (NASDAQ:SPCX) stock closed up over 6% instead of falling out of bed on the lockup expiration as confidently predicted by the media.  We wrote on July 22, well in advance of the lockup expiration:

On August 6, $116B worth of SPCX stock will become eligible for selling.  Short sellers see an opportunity.  The estimate is that about 30% of tradeable SPCX shares are now sold short.  Prudent investors should be careful about being influenced by the media.  There is a fair probability that on August 6, SPCX stock could rally if a short squeeze starts, instead of falling big time as the media is predicting.

  • Chinese investors are aggressively buying gold and silver ETFs in China.  Chinese buying has lifted both gold and silver from technical support.
  • The jobs report shocker is bringing in additional buying in the U.S. in SPDR Gold Trust (GLD), iShares Silver Trust (SLV), and VanEck Gold Miners ETF (NYSE:GDX).

Magnificent Seven Money Flows

Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis. 

In the early trade, money flows are positive in Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc Class C (NASDAQ:GOOG), NVIDIA Corp (NASDAQ:NVDA), and Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are neutral in Apple Inc (NASDAQ:AAPL) and Meta Platforms Inc (NASDAQ:META).

In the early trade, money flows are negative in Microsoft Corp (NASDAQ:MSFT).

In the early trade, money flows are positive in SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:GLD).  The most popular ETF for silver is iShares Silver Trust (NYSE:SLV).  The most popular ETF for oil is United States Oil ETF (NYSE:USO).

Bitcoin

Bitcoin (CRYPTO:BTC) is seeing buying.

What To Do Now

Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals.

The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.