Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Friday, June 6, 2025. Jobs Day.
Read this month’s portfolio update letter.
State of Play
Stocks closed lower yesterday amid a burgeoning feud between Elon Musk and President Trump. As a matter of fact, it may have already moved beyond ‘burgeoning’ to ‘full-fledged.’ As we eye or board of indicators for signs of direction at 0530 ET, things are in a holding pattern ahead of non-farm payrolls at 0830:
Stock index futures are pointing to small gains. The S&P 500 and Nasdaq are up 0.4% each;
Commodities are mixed. The big move is in copper, down 1.4%. WTI crude oil is unchanged trading around $63/barrel. Silver is up >1%, gold unchanged;
Bonds are unchanged after rallying yesterday. The 10-year yields 4.38%;
Cryptos aren’t doing much. Bitcoin is down 1% to trade around $103,600.
Today’s Known Events
Non-farm payrolls are the only game in town. The numbers we’re looking for:
Headline number of 127,000 new jobs, versus 177k last month
That would leave the unemployment rate at 4.2%
Private payrolls of 110k (167k last month)
Average hourly earnings to increase by 0.3% month-over-month (0.2%)
Average hourly earnings to increase by 3.7% year-over-year (3.8%)
The Bottom Line
So economists are expecting a slowdown in hiring. Initial jobless claims came in hot the last couple of weeks and have increased for three weeks in a row, so there is that. We also had ADP payrolls come up short of estimates on Wednesday.
If we do get a soft jobs number today it may not necessarily be a bad thing however as it would increase the likelihood of Fed rate cuts.
Where the Trump-Musk feud is concerned, that is mostly being felt in Tesla (TSLA 0.00%↑) stock right now. Indeed this thing has dropped 20% over the last week as the whole feud with Trump unfolded, though its worst drop was undoubtedly yesterday. That is taking indexes down with it. But you figure that is an overreaction as Tesla’s business can’t really take that much of a hit on Elon’s shenanigans, can it? Indeed, TSLA is up 5% overnight…
Finally be sure to check out the guest podcast recorded earlier this week with Meb Faber. That is available you (premium subscribers) exclusively at this time:
International Value Stocks Present Opportunity, Dividends Best Avoided
Meb Faber of Cambria Investments joins the podcast to discuss the state of markets and the economy, the need to diversify internationally, and why dividends are not a good thing.
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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