S&P futures were trading slightly higher heading into this morning’s jobs data while Treasury yields were around flat. Around 8:00am the BLS reported an issue with their data retrieval system, just ahead of the scheduled 8:30am release. No truth to the rumor they were trolling President Trump. Futures and yields moved around a bit, but the issue was fixed and the numbers hit the tape on time. Non-farm payrolls were up 22k, below expectations of +75k and last month’s 79k, which was revised up from 73k. June however was revised lower from +14k to -13k. Those revisions were very modest compared to last month’s bombshell that saw May and June jobs revised down by 258k. The participation rate ticked higher though, to 62.3% from 62.2. S&P futures jumped on the report, as the numbers dial in the Fed to cut in September, but don’t show an outright collapse. Meanwhile, Treasury yields moved decidedly lower, with the 2yr and 10yr dropping 10-12bp and the 30yr 5bp. Market odds for a 25bp cut by the Fed at the September meeting were close to 100% coming into the print and they edged even higher afterwards. The last payrolls update triggered a rerating of cuts after the sharp downward revisions in that report. Fed speakers, including Chair Powell, have discussed the tilting of risks toward the labor side of the dual mandate. Follow-on employment data, including yesterday, has shown a slowing but not yet stalled, or worse, labor market. Odds of additional cuts in October and December also rose on today’s numbers. Next week’s CPI will be very important, as it spotlights the other half of the Fed’s dual-mandate. President Trump signed an executive order yesterday implementing the US-Japan trade agreement. The US will implement 15% maximum tariffs on most Japanese goods, including autos and auto parts, while further details of the $550B investment commitment from Japan still need to be worked out. Tesla proposed a new pay package for CEO Elon Musk, worth $1 trillion (not a typo) potentially, or slightly less than Kawhi Leonard’s tree-planting endorsement deal. Brent crude is lower, looking at a third straight down day. Yesterday’s DOE data showed stockpiles rose versus and expectation of a draw. Gold was flat but is now up 1% as yields fall, and Bitcoin and Ether are also up ~3%.

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