Dear Trader,
Diesel set an all-time record yesterday, and harvest season hasn't even started.
Two months before the midterms, the fuel that moves freight and heats houses costs more than it did at the 2022 peak, and the refineries are already running flat out.
Then the jobs number landed this morning at 162,000 against a 55,000 estimate, and the Fed hawks got their excuse.
Mark's hosting State of the Market at 10 AM ET with Andrew, and they'll work through what hot jobs plus expensive diesel do to the rate call on the 16th.
They'll also get into Lululemon, where the board hired a CEO in April and told her to start in September (You can guess how the quarter went).
After the show, Mark sticks around to break down how SpaceX actually traded, how it hammered all the related space stocks and what that tells you about the next big listing on the calendar, Anthropic.
This link adds State of the Market to your calendar.
The Daily News Breakdown
SIREN: The August jobs report came in at 162,000, nearly triple the 55,000 economists expected. Unemployment held at 4.1%. Restaurants and bars added 59,000 jobs, public schools added 42,000, and healthcare, which carried the year, slowed to 13,000. The information sector shed another 23,000 white-collar jobs, so the laptop class isn't sharing in the party. July also got revised from a loss to a gain.
Here's the problem for the Fed. Warsh has been telling anyone who'll listen that inflation is too hot, Waller wants to hold, and now the hawks have a fresh excuse. The Sept. 16-17 meeting was already a coin flip on a hike, and this report doesn't make sitting still any easier.
SNEAKER: Lululemon (LULU) dropped 20% Friday after cutting guidance, and Brian Sozzi says the board did it to themselves. Back in April, Lulu named ex-Nike exec Heidi O'Neill as CEO. Her start date: Sept. 8. That's four and a half months of two interim co-CEOs, both holdovers from the strategy that got them here, babysitting inventory nobody wants.
Q2 shows what that gap cost: comps down 10%, North America down 12%, women's down 4%, and leggings, the whole reason the brand exists, down 20%. Full-year EPS guidance got chopped from roughly $11 to $9.48-$9.73, and they left the old range out of the release so you'd have to dig for it. Sozzi pins the whole mess on pressure from ousted founder Chip Wilson. The stock was already down 42% this year before Friday.
SIGN: Retail diesel hit $5.85 a gallon Thursday, a new all-time record, and the timing is about as bad as it gets. The record lands right as demand peaks: harvest and heating season start in a few weeks, distillate stockpiles are the lowest ever for this time of year, and East Coast heating oil inventories have never been lower, period.
Blame two wars. Hormuz is so hot that TotalEnergies' CEO said in August not a single product tanker was moving through it, and Russia extended its diesel export ban through September after Ukraine kept droning its refineries. Refiners are already running at or above nameplate capacity, so Trump asking them to make more won't do much. Diesel is baked into the price of everything shipped, grown, or built, which is a real problem for a Fed debating a hike in two weeks.