Friday's Final Takeaways: Jobs Miss, Solar Stocks Rally

**Marley Kayden** (0:01)
Welcome back to Market on Close. I'm Marley Kayden here in Chicago, alongside Sam Vadas at the New York Stock Exchange. We will close out the week with some final thoughts on this session. Of course, we've been talking about it all show, and all day long, the US labor market delivered a major downside surprise in July, with employers cutting 23,000 jobs, versus the expectation that was looking for an increase of more than 80,000. The weakness was compounded by sharp downward revisions to prior months, with May and June payrolls revised down by a combined 103,000 jobs, while the unemployment rate dipped to 4.1%, as labor force participation fell to 61.4%.
Wage growth also cooled to 3.2% year over year, adding to signs that the labor market conditions are losing momentum and prompting investors to sharply scale back expectations for a September Fed rate hike. The Fed Fund's futures now put the odds of a September hike at about 44%, that's down from 57% before the report came out, putting a renewed focus on whether the Fed can justify further tightening as employment looks like it's weakening. And the US housing market is increasingly splitting into two very different directions, with luxury home sales up 6.2% year over year, while starter home sales fell 5.4%, that's according to New Zillow data. The divide comes as higher income households continue to benefit from stock market wealth and home equity, while first time buyers face elevated prices, elevated mortgage rates, and limited affordable inventory. First time buyers now account for just 21% of the market, that's a record low, while baby boomers make up 42% of home purchases, highlighting just how difficult it has become for younger Americans to break into the market. The result is a K-shaped housing market. We've got strong demand at the high end, but a sharp affordability squeeze at the entry level. Those were just two of the things that stuck out to me, very data-focused today. Sam, how about you? What caught your eye during the session?

**Sam Vadas** (1:51)
Well, I'm just wondering who some of those baby boomers are actually buying the houses for, because Eddie Ardeni is always banging the drum about how they've been helping out the younger generation. So you just don't know, do you? But yeah, really interesting data. I looked at solar stocks today, which had a really good day after President Trump slapped a 15% tariff on products made from polysilicon and set minimum price floors on solar cells. It's all part of the president's aim to protect domestic manufacturing.
First Solar rallied off the back of the news. Also got a price target bump from Wells Fargo, which took the stop to $313 while keeping an overweight rating on the shares. Another takeaway from today was how China is managing to narrow the gap with the US in AI, it seems. ByteDance is reportedly training an AI model that could near the size of Mithos. According to the Financial Times, the model could be three times bigger than Moonshot's Kimi K3, which is the biggest Chinese release to date, and Alibaba is also reportedly planning to ask for revenue sharing arrangements for its next version of Quen. That's according to Reuters, which says Barber is planning to implement a similar measure to Kimi K3, which requires working out a commercial agreement with Moonshot. Reuters says Barber plans to introduce this next week. Heading into next week though, Marley, what are you going to be looking out for?

**Marley Kayden** (3:08)
We're getting another look at inflation. We'll have CPI on Wednesday. Headline inflation expected to rise about 3.4% year-over-year. Core CPI increasing about 2.5% annually. That's the expectation that puts the monthly projections hovering right near, adding about a tenth of a percent for headline, two-tenths for Core CPI. But that's not our only data. We'll get the producer price index to follow on Thursday. Those results could help clarify whether factory level costs are continuing to moderate or if these recent energy price surges are feeding back into wholesale channels. We'll also get retail sales and we'll get existing home sales during the week as well. I didn't realize it till just now, I had an entire data focus today, Sam. What will you be watching?

**Sam Vadas** (3:49)
Well, a bunch of tech earnings out next week. We've got CoreWeave, Cerebris, Lamentum, SuperMicro Computer, that's all coming on Tuesday. We'll have Cisco, Coherence, and Tencent reporting on Wednesday. Then we have Lenovo, jd.com, and Applied Materials on Thursday.
As we know, the market is laser-focused on AI momentum right now, CAPEX, and ROI. We've started to see some of that monetization proof coming through, by the way, of the hyperscalers. That's why we've obviously seen some of that rotation, but it's interesting. Next week, we only have 11 of the S&P 500 due to report. Obviously, AMAT, Coherence, Lamentum, SNCI, among those, but a lot of Chinese ADRs and other tech in focus. That's going to be really interesting as we pass over all those, and some of the reactions we've seen this week, Molly.