August nonfarm payrolls came in at 22K, far below market expectations of 78K and the previous figure of 79K. Since the revision of Aug 1 data, the quality of macro data has raised doubts in the market. The probability of a Fed rate cut this month has risen to 99%. Cuts are also expected in October and December. Stock indexes opened higher in pre-market and hit new record highs. Yields on 10Y/20Y Treasuries fell below yesterday’s key level and kept moving down.
More stocks rose than fell. AVGO earnings beat expectations. The CEO promised to stay on and announced cooperation with OpenAI to develop in-house chips. The stock jumped +14%. LULU cut full-year profit guidance and warned about tariff impact. The stock plunged -20%.
SPY held the key support near $644 yesterday and closed at a record high (S&P 6502). The market seems confident in today’s data and trend. During the day, it moved into the resistance zone near $650–655. The previous high at $649–650 is now the key intraday pivot.
The Big 7 tech stocks continue to lead in turns. Monday was GOOGL and AAPL, Tuesday TSLA, yesterday AMZN. Today AVGO pushed chip equipment higher.
Tesla’s board granted Elon Musk a pay package worth up to $1 trillion, if the company reaches a market cap of $8.5T within 10 years (current cap is about $1.1T). This equals the combined market cap of NVIDIA and Microsoft today. The plan has 12 milestones, such as 1M Optimus robots, 20M Tesla cars, 10M Robotaxis, and EBITDA of $400B. (Chart attached: Elon Musk’s compensation plan).
Back in 2018, the last record pay plan was worth $56B, with the condition to grow market cap 12x (from $59B to $650B in 10 years). The result is clear: what seemed impossible became reality.
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