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8/8/22 The REAL Jobs Numbers

News:

On Friday, the initial jobs number looked great. According to the Bureau of Labor Statics, the economy added 528,000 new jobs.

  • The Government and the headlines pointed out that employment has “returned to [its] February 2020 pre-pandemic levels.”

The market reacted with a knee-jerk sell-off that was virtually erased by the end of the day.

Markets closed mixed…

  • Dow Jones +0.2
  • Nasdaq -0.5%
  • S&P 500 -0.2%
  • Russell 2000 +0.8%

But there’s more to the story…

The REAL Jobs Numbers

People in line at a job fair

There are two things we need to understand about the newest jobs number.

  1. The initial sell-off was driven by a fear that The Fed would use these numbers to justify more aggressive rate hikes in the future.
  2. The REAL jobs numbers aren’t as pleasant as one might assume…

You see, these 500K+ new jobs aren’t full-time with benefits. The economy actually lost about 71,000 of those jobs in July.

A few stats

  • Part-time jobs +384,000
  • Workers with multiple jobs +92,000

Sector Round-up

5 of 11 sectors ended the day in positive territory.

The top gainer was Energy (XLE), gaining nearly 2%.

Consumer Discretionary (XLY) was the worst performer of the day with a loss of 1.7%.

Of the 7000+ stocks traded on U.S. exchanges, advancers to decliners were near even with a 50/50 split.

Top Stocks

AMC^ gained 19% after announcing a “special dividend” on its earnings call.

Bed Bath & Beyond (BBBY) has doubled in price over the last month. 

  • Earnings report was lousy.
  • Its meme stock status is getting credit for the move.

Tesla (TSLA^) fell over 6% on Friday.

  • Shareholders approved the 3-to-1 stock split at the annual meeting.
  • Over the weekend, CEO Elon Musk suggested he could still buy Twitter (TWTR^).

Monkeypox

The White House declared the Monkeypox outbreak a “public health emergency” last week.

Researcher looks in microscope
Photo by Pixabay from Pexels
  • SIGA Technologies (SIGA) stock is up about 85% over the past month as it seeks FDA approval for a treatment
  • NanoViricides (NNVC) popped 95% last week after announcing its intentions to develop a treatment.

The Round Out

The Senate passed the “Inflation Reduction Act” over the weekend. The bill includes:

  • $430 billion in new spending.
  • Focused on Climate & Healthcare.
  • The bill heads to the House, where it’s likely to pass.

Bitcoin^ is trading above $24,000 this morning. Its trend remains bullish.

Technicals:

The oversold conditions we’ve been tracking have been mostly relieved.

The Russell 2000 is the only major index with oversold RSI conditions.

Today let’s look at the long-term trend of the VIX.

Chart of the VIX
VIX Daily Candles – Chart via thinkorswim

The arc has peaked, and the trend is down. 

With the VIX trending lower and everything else neutral, the market’s path of least resistance is up.

Timing:

This week:

  • Roblox (RBLX) reports earnings after the close on Tuesday.
  • The latest CPI inflation reading is due out on Wednesday morning premarket.
  • Walt Disney (DIS) reports earnings after the close on Wednesday.

Watchlist:

*Low Float
^Open Position

*REV has resistance at $10
*NNVC has support at $3
*SRTS has support at $12
TMDX has support at $40
COGT has support at $12
GTHX has support at $12
SIGA has support at $20-22
ASRT has resistance at $4
ALDX is on watch
DCPH has support at $14
RYTM is on watch
GRBK has support at $27
YELP has support ta $38
PAVM has resistance at $2
CBAY has support at $3.50
CYTK has support at $50
BLU has support at $11

Secondary watchlist … +100m float

INSM has resistance at $26
DVAX has support at $12
EDU has support at $25
ARRY has resistance at $17.50
TCRT has support at $1.50
BFLY has support at $6
FOLD has support at $11.50
GERN has support at $2
JOBY has resistance at $7
GSAT has support at $1.50

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