The American economy shed 23,000 jobs in July and the S&P 500 answered with a record close, which tells you precisely whose problem unemployment is not. Good morning and welcome to today's market chronicle. It's Monday, August 10, 2026.
Friday's payroll report was a disaster dressed as a gift. Minus 23,000 against a consensus of plus 80,000, the previous two months revised sharply lower, and an unemployment rate that fell to 4.1 percent from 4.2 percent for the least reassuring reason available, which is that people stopped looking for work. Le tout-Wall Street read this and did what it always does, which is calculate the second derivative of its own comfort. September hike odds in fed funds futures fell from roughly 55 percent to roughly 40 percent, the two year dropped eight basis points, and the S&P 500 closed at 7,757.64, up 0.62 percent, capping its best week since April, with the Nasdaq at a record too. Translation: the labor market cracked and the equity market sent flowers.
Notice the shape of this. Nobody is celebrating a rate cut. We are celebrating the possible absence of a rate hike, from a Federal Reserve parked at 3.50 to 3.75 percent with three of its own publicly agitating to go higher, under a chairman, Kevin Warsh, confirmed in May by 54 votes to 45, the narrowest in the institution's history. The bar has fallen so far that "the hawk probably will not bite" now qualifies as a bull case. And everyone is pretending not to notice that if the Fed holds because hiring stopped, the thing that stopped hiring does not politely disappear on Wednesday.
Which brings us to Wednesday. July CPI at 8:30, consensus around 0.2 percent headline and 0.3 percent core, against a June reading still running 3.5 percent year over year. PPI Thursday, retail sales and Michigan sentiment Friday. Cisco ($CSCO) reports Wednesday after the close and Applied Materials ($AMAT) Thursday, and both will be read as macro instruments rather than as companies, as is tradition. There is no FOMC until September 16, which means this week's data is the entire conversation, and everyone will pretend to have known the answer by 8:31.
Brent is near 84.39 and WTI near 78.77, both firmer, because the Strait of Hormuz is still shut and Tehran keeps attaching conditions to a shipping arrangement that is permanently almost finished. Gold sits around 4,340. Bitcoin is around 64,800, roughly half its October high, which is a remarkable result for the asset marketed as gold for people who understood computers. The ten year is somewhere near 4.6, though the screens disagree by a few basis points this morning, so hold that one loosely. S&P futures are modestly green, a tenth or six tenths depending on which vendor you believe.
So the market has concluded that inflation will behave itself in a week when the world's most important oil chokepoint is closed. Bold.
Have a good one.