U.S. Futures & World Markets

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S&P futures are flat premarket, although the Nasdaq is higher as tech stocks catch a bid. Oil prices are down, but it's been a big week for crude (+6%) — its largest weekly gain since July. Non-Farm Payrolls are out at 8:30 ET.

One of the more interesting themes in the market this year: solid YTD returns, growing corporate earnings, and contracting valuation multiples. Stocks have moved higher because companies are actually making more money — not because investors are simply willing to pay higher and higher prices. @renmacllc: "Returns this year have been driven by rising revenues and margins. But there has been a reluctance to pay up as much for these earnings ... This seems more prudent than in the late 1990s. Back then, earnings from the tech revolution had yet to arrive in size, but that did not stop investors making hugely optimistic assumptions about the future of the web. Multiples were far and away the main driver of stock returns." There are actual earnings underneath this rally. And as you know, over the long run, that's what matters.

S&P Futures vs. Fair Value: flat  |  10-Year Yield: 4.76%

CORE Headlines

Charts & Data

Short-term momentum in Tech just closed in the 1st percentile of its history back to 1985. So did Industrials — same week. Two unrelated sectors at 41-year extremes isn't a sector story. It's a positioning story, and it's the crowd paying rent on an AI trade that got too full. @renmacllc via Daily Chartbook: the most important technical read of the week.

NFP forecast from LinkUp: net gain of 85,000 jobs in August. @linkup via Daily Chartbook.

NFP forecast from RSM: 25,000-job increase — the combination of boomers retiring and restrictive immigration will continue to result in a monthly breakeven of roughly 35,000 jobs. Joseph Brusuelas, RSM via Daily Chartbook.

Central banks added 23 tonnes to global official gold reserves in July — momentum remains positive. @krishangopaul via Daily Chartbook: sovereign demand for gold is structural, not cyclical.

After hitting a 2+ year high at 102.7 last week, the NAAIM Exposure Index dropped sharply to 85.6. NAAIM via Daily Chartbook: active managers deleveraged quickly — a sign that the prior positioning was stretched.

Small caps aren't getting much love — positioning at the 48th percentile, far from crowded, leaving plenty of room to add exposure. Deutsche Bank via Daily Chartbook: the least loved major asset class by institutional investors.

The VIX is optically low but only mildly undervalued relative to fair value models — not a slam-dunk case for hedging into a seasonally weak period. Variant Perception via Daily Chartbook: nuance on the vol complacency narrative.

Volatility has stopped being a warning sign and has started acting like a buy signal. Bloomberg via Daily Chartbook: Nick's long-held view confirmed by the data.

For the first time ever, the Magnificent 7 are negatively correlated with momentum. Sherwood via Daily Chartbook: a historic structural break — the Mag 7 are no longer a momentum trade.

The biggest driver of performance within the Industrials sector since its peak has been AI exposure. Bespoke via Daily Chartbook: AI is reshaping every sector, not just tech.

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This content does not constitute legal, tax, accounting, or other professional expert advice. Everything published is believed to be reliable, but its accuracy or completeness is not assured. Past performance does not indicate future results. The opinions expressed herein are subject to change without notice and are solely those of the author as of the date indicated.