“All eyes, you mentioned it, PPI, CPI are going to be coming out this week to really identify whether the impact of tariffs on the marketplace.” – 02:20

Peter Tuchman, Senior Floor Trader at TradeMas, joins Remy Blaire to provide his insights on the market’s expectations regarding the rate cut. Peter expresses skepticism about the idea of the rate cut being “priced in” to the market, suggesting that while a 25 basis point cut could lead to a positive market reaction, there are concerns about whether the Fed might be overreacting to the current economic data.

As they look ahead to the trading week, Remy and Peter highlight key economic indicators, including the Producer Price Index (PPI) and CPI, which are expected to reveal the impact of tariffs on the marketplace. Peter emphasizes the importance of these reports in understanding trends in consumer spending and employment, particularly as unemployment rates have ticked up from 4.1% to 4.3%.

The discussion also touches on the valuation of major U.S. stock averages. Peter notes that while some stocks, especially the MAG 7, may seem highly valued, the overall market remains buoyed by strong earnings reports, with over 80% of S&P companies beating expectations. This positive earnings trend is fostering a more optimistic outlook for future guidance.

As the segment concludes, Remy and Peter reflect on the possibility of a market pullback, given the current record highs and the fragility of the economy. They look forward to the Fed’s decision on September 17th and its potential impact on market dynamics. 

“For it to be a real knock it out of the park event, Apple’s got to talk a little more about Apple intelligence.” – 03:23

Chris Versace, CIO of Tematica Research, joins Remy Blaire to discuss the troubling state of the U.S. labor market, which is exhibiting significant signs of strain. The latest jobs report reveals that nonfarm payrolls added only 22,000 jobs in August, indicating a sharp slowdown in hiring. The unemployment rate has risen to 4.3 percent, the highest level since 2021. Remy highlights that more industries are losing jobs than gaining them, and revisions to past data show that the three-month hiring trend is the slowest it has been in over a decade, excluding the pandemic period. While the healthcare sector remains a bright spot, it may not be sufficient to offset the broader economic weaknesses.

Chris delves into how the disappointing jobs report is shaping expectations for the upcoming Federal Reserve meeting, particularly regarding potential interest rate cuts. Chris discusses the possibility of the Fed delivering a rate cut in September and addresses the market’s expectations for multiple cuts this year. He emphasizes the importance of upcoming inflation figures and how they could influence the Fed’s decisions.

The conversation then shifts to the tech sector, with Remy looking ahead to Apple’s annual fall product event, a significant moment for both the tech industry and consumer sentiment. Chris underscores Apple’s importance within the S&P 500, suggesting that the company’s performance can impact the market as a whole. He speculates on what to expect from the event, including potential announcements about new iPhones and advancements in artificial intelligence. Chris notes that for the event to be truly impactful, Apple needs to provide more information about its AI initiatives.

Additionally, they discuss the Goldman Sachs Communicopia and Tech Conference, which is set to feature key presentations from major companies like Microsoft and Nvidia. Chris highlights the significance of this conference in the current market environment, noting that reaffirmed or raised earnings expectations could drive the market higher.

“I surely think that 25 is a guarantee… whether we’re going to have a 50 that’s starting to grow up to as much as 12% that would be super exciting.” – 02:21

Peter Tuchman, Senior Floor Trader at TradeMas, joins Remy Blaire at the New York Stock Exchange to discuss the current state of the U.S. labor market and its implications for the Federal Reserve’s monetary policy.

The segment begins with Remy highlighting the recent jobs report, which has raised concerns about the labor market and sparked expectations of potential rate cuts by the Fed. Peter emphasizes the importance of looking beyond seasonal trends, particularly in September, as he argues that August was a month filled with significant market events, including tariffs and record highs.

Peter elaborates on the recent economic indicators, noting that unemployment is rising and job creation is softer than expected. He attributes these trends to the impact of tariffs on the economy and consumer behavior. This backdrop, he suggests, sets the stage for a potential pivot in the Fed’s policy, with a strong likelihood of a 25 basis point cut at the upcoming meeting on September 17th. He also discusses the growing probability of a more aggressive 50 basis point cut, which is becoming a topic of interest among market participants.

As the conversation shifts to market dynamics, Peter shares his observations regarding the influx of capital into the S&P 500. He notes that nearly $10 billion has flowed into the market in just the first three days of September, contributing to record highs in the S&P and other indices. Despite the underlying economic challenges, this significant investment reflects a level of confidence among investors.

Remy and Peter also discuss the performance of gold and cryptocurrencies, with Peter highlighting the maturation of retail investors. He points out that these investors are no longer merely reacting to market fluctuations; instead, they are strategically buying into various assets, including equities, gold, and crypto. This behavior indicates a strong confidence in the market’s upward trajectory.

“However you do slice it, it’s coming out in a way that reinforces this narrative of a weaker labor market, but not yet so weak that it’s affecting a lot of other economic activity.” – 02:52

Steve Sosnick, Head Trader of IBKR Securities Services, joins Remy Blaire at the New York Stock Exchange to discuss the current state of the U.S. markets following the release of the August jobs report. The episode opens with Remy noting that U.S. markets are in positive territory, despite the report indicating a slowdown in labor market growth. She highlights the 84% probability of a 25 basis point rate cut by the Federal Reserve on September 17th, emphasizing that September is historically a volatile month for markets.

Remy and Steve delve into the details of the jobs report, which shows nonfarm payrolls coming in weaker than expected and the unemployment rate rising to 4.3%. Steve describes the data as a “Goldilocks number,” suggesting it is bad enough to increase expectations for rate cuts but not so dire as to cause significant concern about the economy. He explains that the market’s narrative remains intact, as the data does not disrupt the stock market’s preferred outlook.

The conversation shifts to upcoming economic indicators, including revisions for nonfarm payrolls and CPI and PPI data. Steve points out that labor market data is less frequent than price data, making it more scrutinized and impactful on market sentiment. He notes that the current narrative suggests a weaker labor market, but not weak enough to affect broader economic activity.

Remy then asks Steve about the performance of various assets, including the 10-year Treasury yield, which is around 4.08%, and gold, which continues to rise after hitting record highs. Steve remarks that the S&P 500’s recent all-time highs are less about specific numbers and more about maintaining a positive upward trend. He emphasizes that as long as the market narrative supports growth, investors remain optimistic.

The discussion also covers the bond market, particularly the concerns surrounding overseas bonds in countries like France and Japan, where rising deficits are leading to increased bond issuance. Steve likens the U.S. bond market to the “cleanest dirty shirt in the laundry bin,” suggesting that while the U.S. has its own deficit issues, it is viewed as a relatively safer investment compared to other nations.