Key Takeaways
- Trump-Musk feud rattles markets; Tesla dives 14% as political tensions shake investor confidence
- Jobs report beats forecast slightly, but downward revisions temper enthusiasm and bond yields rise
- Tariffs, forecasts disappoint: Lululemon, DocuSign, Broadcom stocks fall sharply in premarket trading
Major indices were relatively quiet on Thursday, the S&P 500 fell 0.5% and Nasdaq Composite dropped 0.8%. Small cap stocks were unchanged while the Dow Jones Industrial Average fell 0.25%. Following this morning’s jobs report, equities look poised to make a run at 6,000.
We received the latest read on employment this morning. According to Bloomberg, forecasts were calling for 130 thousand new jobs and an unemployment rate of 4.2%. The actual reported numbers were a gain of 139 thousand jobs with the unemployment rate unchanged at 4.2%. As is always the case, there were revisions included in today’s report. Both March and April were revised downward by a total of 95 thousand jobs.
We also had some earnings news on Thursday after the close. Lululemon announced their earnings and, as is the case in many announcements this quarter, the company warned of tariff-related headwinds. That news has shares trading lower by more than 20% in premarket. Shares of Broadcom are also lower by nearly 3% in the premarket. The chipmaker beat estimates on the top and bottom line; however, their forecast was in line with estimates, and the street was hoping for more. Finally, DocuSign is trading lower in premarket activity by 20% after announcing slower than forecast billings growth.
Elsewhere, a story that can’t be escaped is the feud taking place between President Trump and Elon Musk. While the cause and eventual outcome can be debated, the immediate impact was felt with shares of Tesla falling 14% on Thursday. However, White House officials have scheduled a call for today between Trump and Musk and that has shares of Tesla higher in premarket by 4%.
For today, I’m continuing to watch the VIX. Following this morning’s employment numbers, VIX is below 17.5 and closing in on its historical mean of 16. I’ve repeatedly mentioned I would like to see us get back down to that level. I’m also watching bonds. While the jobs number was roughly in line with estimates and equity markets have initially responded positively, bonds are pulling back. Rates on the benchmark 10-year note are at 4.44% while 30-year rates are at 4.93%. That is pushing back expectations of the Fed cutting interest rates anytime soon. As always, I would stick with your investing plan and long-term objectives.
tastytrade, Inc. commentary for educational purposes only. This content is not, nor is intended to be, trading or investment advice or a recommendation that any investment product or strategy is suitable for any person.
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