Lululemon Crashes After Earnings, Strong Jobs Report Put Fed Hike in Play

**Zaid Admani** (0:00)
Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Friday, September 4th. In today's episode, we'll break down the surprisingly strong August jobs report, and what it means for the Fed's interest rate decision later this month. We'll also tell you about Tesla's Cybercab event yesterday, and why Lululemon stock is getting absolutely hammered after their earnings. And then stick around to the end of the show to find out why the richest owner in sports just got hit with the biggest punishment in NBA history. We got a great show for you today.
Let's go.
Well guys, we finally got a nice rally in the stock market on Thursday. The S&P 500 jumped 1.1% and the NASDAQ was up 1.4% after Fed Governor Christopher Waller suggested that he could support keeping interest rates steady at the Fed meeting later this month. Well, his decision might have just gotten a bit harder because we just got the August jobs report this morning. I've been talking about it all week and the numbers could impact what the Fed does with interest rates. According to the report, the US economy added 162,000 jobs in the month of August, absolutely crushing expectations of 53,000 jobs. On top of that, July's jobs numbers were revised from losing 23,000 jobs to actually adding 21,000 jobs. And the unemployment rate held steady at 4.1%.
So after a pretty shaky summer of weak jobs reports, the labor market is suddenly looking a lot healthier, which is good news, but it is bad news for the stock market because it raises the chances that the Fed could hike interest rates. Remember, the Federal Reserve's job is to keep inflation low and employment high. That is their dual mandate. And they do that by changing interest rates. If the labor market is looking healthy again, that could give the Fed cover to move forward with rate hikes later this month to get inflation under control. Traders are now pricing in a 60% chance of a September rate hike, and Treasury yields are jumping as well after the jobs report this morning. Personally, I don't think today's jobs report guarantees a rate hike later this month. I think what it does do, though, is remove the labor market as the Fed's excuse not to hike interest rates. I think it will all come down to inflation. We are getting a CPI report next week. And if that comes in hot, a rate hike could be in play in a couple of weeks. The market is definitely pricing it in. So yeah, the next couple of weeks are going to be big. We have a CPI report. There's an Apple event next week. We have a Fed meeting coming up and who knows what else? We're gonna be staying on top of all of it for you guys and recapping it on the show. So definitely get subscribed to the podcast if you haven't already. Also, just a heads up, Monday is Labor Day. The stock market will be closed. So no show from us that day. Also no deep dive this weekend as well. But we are posting an awesome interview over the weekend. So keep an eye on your podcast feed for that. Let's run through some headlines. Starting with Tesla and the Cybercab. Tesla had a very low key event in Austin, Texas last night, where they announced that the Cybercab is finally rolling out to the public as part of Tesla's RoboTaxi service. Now Tesla first showed off the Cybercab back in October of 2024 So almost two years ago, it's a very unique looking car. It's gold, it's two seater only. It has no steering wheels, no pedals and no side mirrors. The idea is that the passenger gets in, sits down and the car drives itself to the destination. And it seems like Tesla finally has the tech good enough to finally roll it out to the public, but it is a very limited rollout. According to state records, Tesla has just 45 Cybercabs registered for autonomous operations in Texas and rides to the public are rolling out this weekend in limited parts of Austin. So it's still not a full scale rollout. And I think that's why the event last night was so low key. Usually these Tesla events are hyped up where a lot of people are invited. The whole thing is live streamed, but that wasn't the case for the event last night. There was no live stream. There was no journalist. In fact, the event was mostly covered by Tesla influencers. I mean, even Elon Musk didn't take the time to show up for the event. So I think it's a sign that the Cybercab still isn't ready for prime time. And when you look at Tesla overall in the robotaxi service, it's still way behind Waymo. In Texas alone, Waymo has nearly a thousand driverless cars registered, Tesla has just 420 cars, and most of them are the Model Y. The difference though is that Waymo cars are very expensive to make because they are covered in lidar, radar and other sensors. The Cybercab on the other hand is much cheaper to make because it only uses cameras and neural networks for self-driving. And Tesla is betting that in the long term, the difference in cost for the vehicles will allow them to scale much faster. So we'll see, I mean, I'm a little skeptical that Tesla will catch up to Waymo anytime soon. And I'm still not really sure why Tesla needs to make a dedicated Cybercab instead of just using their Model Ys. I think the market seems to be pretty disappointed with the Cybercab event as well. Tesla stock was up more than 5% yesterday, leading up to the event, but the stock is down around 4% today following the event.