U.S. Futures & World Markets

Crude oil is higher, and guess what? Stocks are lower. I know you're shocked.

It was interesting to see stocks close slightly higher last week, despite all of the volatility around oil prices, Treasury yields, and possible interest rate hikes. Somehow, the market managed to survive a week without everything going exactly right.

Friday's payroll report came in hot, and expectations of a Fed hike have increased to 60% for the September FOMC meeting (up from 50% on Thursday). While this has the market on edge, it's more important for the market to get a gauge on the possibility of subsequent hikes. One or two hikes is decidedly different than 4-5 hikes over the next year.

This week should provide additional clues. We'll get August Producer Price Index (PPI) on Thursday and Consumer Price Index (CPI) on Friday. Expect more volatility until we get more clarity.

S&P Futures vs. Fair Value: -27.00  |  10-Year Yield: 4.80%

CORE Headlines

Charts & Data

Boomers account for a growing share of consumer spending — we need them to keep spending. WSJ via @unusual_whales: the demographic tailwind for consumption is real.

After falling 80% from its record high, Nike will be removed from the S&P 100 at the end of this month, ending a near 18-year run. The stock has erased $230 billion in market cap since its all-time high. A collapse for the history books. The Kobeissi Letter: a stunning cautionary tale about brand complacency.

Software IGV just triggered a signal seen only 4 times in 25 years — up 24.5% in five weeks. The last 3 times: after the major lows of 2020, 2009, and 2002. Alf Charts via Daily Chartbook: one of the most historically significant technical signals of the year.

AI is proving to be a net job creator in the US — easily generating over 1 million new positions (from data center construction to AI engineering) to offset back-office layoffs. The jobs apocalypse is postponed. An AI jobs boom is here. Rafael Domenech via @TheEconomist: the labor market data keeps refusing to confirm the AI doom narrative.

For software, simply attaching 'AI' to the story isn't enough anymore. Investors want to see AI move from pilots into production through usage growth, ACV uplift, seat expansion and consumption credits. Without revenue reacceleration, cheap valuations alone may not provide the catalyst for a sustained rerating. Bloomberg via Daily Chartbook: the bar for software stocks is rising.

The S&P 500's 200-day moving average has now risen for 329 consecutive trading sessions — the 4th-strongest streak over the last 10 years. Combined with the prior 460-session run, the total streak approaches 800 sessions — the 3rd-longest since 1990. When the 200-DMA is rising, S&P returns average +8.5%/year. When falling, just +0.1%/year. The Kobeissi Letter: the most powerful bull market confirmation in the data.

August payrolls surged 162,000 with upward revisions to June and July. Unemployment unchanged at 4.1% — the lowest since June 2025. Average hourly earnings rose 0.3% m/m but the YoY rate slid to 3.1% — the lowest since May 2021. Sandy Batten, Haver Analytics via Daily Chartbook: strong jobs, cooling wage growth — the ideal combination.

Shanghai crude futures above Brent for the first time since May — China's buyer strike was the most important reason oil prices remained subdued during the Iran War. China seems to be buying again. @warrenpies via Daily Chartbook: the biggest oil market risk signal of the week.

Treasury ETF weekly outflows have only been exceeded on a handful of occasions over the last 20 years as a percentage of total NAV. Simon White, Bloomberg via Daily Chartbook: bond investors are exiting at a historically extreme rate.

Gold's fading correlation with risk assets like equities suggests gold's traditional value as a hedge has returned after a period of speculative trading. Bloomberg via Daily Chartbook: gold is acting like gold again.

The 252-session average pairwise correlation among Magnificent 7 members is at its lowest level since 2014. Luke Kawa, Sherwood via Daily Chartbook: the Mag 7 are no longer a monolith — stock picking within the group is starting to matter.

VIX under 15 on Labor Day for the 13th time in the VIX data era. The 6-month and 12-month forward returns from these setups are historically strong. @oddstats via Daily Chartbook: low vol at Labor Day has historically been bullish, not bearish.

Netscape vs. ChatGPT analog continues to rhyme. Bespoke via Daily Chartbook: history may not repeat, but it sure seems to be rhyming.

The Federal workforce fell in August to 2.67 million employees — the lowest level in more than 60 years, going back to May 1966. Mark J. Perry: a historic structural reduction in the size of the federal government.

Interesting Reads

Want this in your inbox every morning?

Morning Core subscribers get this analysis two days before it's published here — plus charts, data, and Nick's unfiltered take on the markets. It's free.

Subscribe to Morning Core — Free
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.