Though MSFT lowered guidance, ADP hinted at slowing jobs growth; productivity came in at -7.3, and costs rose 12.6%; the bulls found inspiration to buy as the indexes approached price resistance levels.  With nothing of consequence on the earnings calendar, will the Employment Situation data keep the bulls inspired to close out the week strong?  That’s certainly possible, but we should also watch for the possibility of some profit-taking heading into the weekend.

Asian markets closed Friday mainly higher, with only the tech-heavy Hong Kong exchange down 1.00%.  European markets trade mixed as they cautiously wait on the U.S. jobs data.  U.S. futures, however, see red across the board this morning, ahead of the Employment Situation report, with the Nasdaq leading the selling.  So, buckle up and plan for another dose of price volatility before the bell.

Economic Calendar

Earnings Calendar

Although we have a dozen companies listed on the Friday earnings calendar, we only have one verified report.  The stock is YTRA, trading at $1.97 is not exactly what I would call particularly notable unless you own this leisure company.

News  & Technicals’

Lawmakers in New York just passed a bill to ban certain bitcoin mining operations on carbon-based power sources.  The measure now heads to the desk of Governor Kathy Hochul, who could sign it into law or veto it.  If it passes, it will make New York the first state to ban blockchain technology infrastructure.  There are more than 19,000 cryptocurrencies in existence and dozens of blockchain platforms that exist.  However, several cryptocurrency industry players told CNBC that thousands of digital tokens are likely to collapse while the number of blockchains will also fall over the coming years.  Brad Garlinghouse, CEO of cross-border blockchain payments company Ripple, said there are likely to be “scores” of cryptocurrencies that remain in the future.  Tesla CEO Elon Musk has a “super bad feeling” about the economy and needs to cut about 10% of jobs at the electric carmaker, he said in an email to executives seen by Reuters.  According to its annual SEC filing, Tesla employed almost 100,000 people at the company and its subsidiaries at the end of 2021.  Musk has warned in recent weeks about the risk of a recession, but his email ordering a hiring freeze and staff cuts was the most direct and high-profile message from the head of an automaker.  Turkey’s inflation for May rose by an eye-watering 73.5% year on year, as the country grapples with soaring food and energy costs and President Recep Tayyip Erdogan’s long-running unorthodox strategy on monetary policy.  Food prices in the country of 84 million rose 91.6% year on year, the country’s statistics agency reported, bringing into sharp view the pain that regular consumers face as supply chain problems, rising energy costs, and Russia’s war in Ukraine feed into global inflation.  Economic analysts expect the trajectory of Turkey’s inflation will only get worse.  Treasury yields ticked higher in early Friday trading, with the 10-year trading at 2.94% and the 30-year slightly higher at 3.08%. 

The indexes initially found inspiration to move south after MSFT lowered guidance, but the bulls quickly shrugged off the news, climbing back to the top of the recent range while the QQQ surged to a new weekly high in the last few minutes of trading.  Hints of a slowing jobs numbers, productivity at a -7.3% as labor costs rose 12.6% didn’t seem to matter as traders to buy stocks nearing downtrends and price resistance levels.  Index volumes were low on yesterday’s rally, but the VIX finally made it below 25 handles.  Unfortunately, the T2122 indicator continues to signal a short-term overbought condition suggesting a pullback could begin at any time.  We will see if the Employment Situation number can continue to inspire the bulls or if it’s the bears will find a reason to work as the weekend approaches. 

Trade Wisely,

Doug