FT: America’s Hiring Freeze Keeps the AI Trade Red Hot… Airbnb Cleans House (+15%)

We’re done when I say we’re done… -your favorite AI stock

Well, Happy Fiesta Friday, as my former alma mater used to call it (because we had tacos for lunch… duh). 

The U.S. economy lost 23,000 jobs in July, unemployment fell because fewer people bothered looking for work, and Michael Burry STILL can’t convince anyone that the AI boom is one giant circle jerk doomed to collapse.

Seriously, the American labor market somehow managed to lose jobs and create a stock rally at the exact same time.

When the closing bell finally rang, the Nasdaq finished up 1.2%, the S&P 500 gained 0.6%, and the Dow added 0.3%… proving investors, much like Big Sean, don’t give a f*** about traditional economic indicators in this modern Sam Altman (and Elon Musk) driven market.

Economists expected the U.S. to add somewhere between 80,000 and 83,000 jobs in July. Instead, payrolls dropped by 23,000 and landed in that magical sweet spot where workers get nervous and investors get greedy. 

Even better, the unemployment rate slipped from 4.2% to 4.1%… mainly because the labor-force participation rate fell to its lowest level in more than five years. In other words, unemployment improved because enough people stopped looking for work that the government no longer had to count them.

Naturally, traders took one look at that economic tire fire and decided Kevin Warsh probably won’t raise rates in September. Fed-funds futures now show most investors expect Donnie’s new man to leave rates parked between 3.50% and 3.75%, which was all the permission investors needed to keep buying.

Safe to say, the chips were no longer down this week… Intel ballooned 11%, Micron added 6%, and even AMD recovered from the public execution that followed its strong quarterly results.

Software stocks did even better as earnings proved that while AI may eventually destroy the entire sector, they won’t go down without a fight. Cloudflare popped 4% after delivering a strong outlook, while Atlassian jumped 36% after beating expectations and raising guidance.

The buying spree eventually checked into Airbnb, which jumped 15% after beating earnings and confirming Americans remain perfectly willing to pay $280 in cleaning fees for a home they’re required to clean themselves. (Now up 33% for the year.) 

Meanwhile, the stock everyone promised would drop BIGLY after the insider lockup (read: SpaceX) exploded 12% Friday and nearly 19% for the week, forcing the “I’ll buy at $75” crowd to begin emotionally preparing for $160. (Many such cases). 

Gold also jumped more than 2% Friday and has gained over 8% across the past five sessions. I guess fewer jobs mean fewer rate hikes, and fewer rate hikes mean investors can return to paying record prices for a metal that mostly sits in a vault doing nothing. 

Last but not least, before another grueling weekend of “club championship-level golf,” Donnie Politics considered removing Fed Governor Lisa Cook over allegations she lied on mortgage documents. 

Whether he actually does it is doubtful, considering “threaten first, move on later” has become the unofficial slogan of his second term.

Looking forward to next week… Wednesday’s Consumer Price Index will show whether inflation is cooling enough to keep Warsh seated comfortably on his hands. But I’m starting to think it’ll take more than one ugly number to stop the AI trade now.

If you read all of this, congrats for having a 10 second attention span (better than me). As always, here’s our heatmap for today.

Market Gossip

>Levi Strauss reveals cybersecurity breach amid wider wave of attacks (Yahoo Finance): American Eagle and Sydney Sweeney think they slick.

>Meta Ordered To Pay $567 Million In New Mexico For Children's Mental Health Fund (Zerohedge): “Why would children’s mental health do this to us?” Zuck, probably

>Crude oil supplies at 45-year low (The Hill): Donnie to the final barrel: Look at me. You’re the strategic reserve now.

>Elon Musk to build the biggest building in the world — spanning a colossal 100M square feet (New York Post): Still waiting on SpaceX to fall to $70 like everyone promised it would.

At the time of publishing this article, Stocks.News holds positions in Intel and Meta as mentioned in the article.