Roaring Kitty (aka r/DeepFuckingValue) returns, plus the May jobs report and 🧁 weekend sprinkles 🧁
The Sandbox Daily (6.7.2024)
Welcome, Sandbox friends.
Summer Friday’s are back and corporate America is rejoicing!
In today’s Summer Friday installment, we were treated to a live stream from GameStop’s ($GME) biggest cheerleader and star investor, Roaring Kitty (r/DeepFuckingValue). My friend Sam Ro of TKer.co summed up today’s events perfectly:
Today’s Daily discusses:
May jobs report
weekend sprinkles
Let’s dig in.
Markets in review
EQUITIES: S&P 500 -0.11% | Nasdaq 100 -0.11% | Dow -0.22% | Russell 2000 -1.12%
FIXED INCOME: Barclays Agg Bond -0.88% | High Yield -0.26% | 2yr UST 4.889% | 10yr UST 4.434%
COMMODITIES: Brent Crude -0.39% to $79.56/barrel. Gold -3.34% $2,311.1/oz.
BITCOIN: -2.08% to $69,242
US DOLLAR INDEX: +0.80% to 104.935
CBOE EQUITY PUT/CALL RATIO: 0.59
VIX: -2.86% to 12.22
Quote of the day
“Stay away from negative people. They have a problem for every solution.”
- Albert Einstein
May jobs report
Wall Street had been looking towards this release all week for clues on when the Federal Reserve may cut interest rates. Well, those interest rate cuts that just got priced back into the market are out the door again, as today’s trading suggests the case for policy easing got weaker.
Nonfarm payrolls grew by 272,000 in May, well ahead of the 180,000 estimate and an acceleration from 165,000 jobs added in April. May marked the 41st consecutive month of job gains – the 5th-longest period of employment expansion on record. We continue to add jobs well above the pre-pandemic trend (249k vs. 166k).
The notable bounce-back in hiring was led by strong hiring in professional services, government, and leisure and hospitality.
Meanwhile, the closely watched average hourly earnings also were higher than expected, up +0.4% month over month and +4.1% on an annual basis.
Elsewhere, the unemployment rate inched higher to 3.96% in the month – the 30th consecutive month that the nation’s jobless rate has been at or below 4.00%, the longest stretch in more than 50 years.
Many look at the cyclical troughs in unemployment rate as a recession indicator. The chart below shows the unemployment rate (in red), 12-month moving average (in purple), and the cyclical trough (in teal). As the inset table shows, the correlation between the MA troughs and recession starts is remarkably close. The most recent trough occurred 11 months ago in June 2023, so this current cycle of jobs losses is muted and protracted when compared to historical measures.
Here is feedback from Tom Lee of Fundstrat on today’s jobs report:
Bottom line, a week chock-full of unemployment data – JOLTS, ADP payrolls, initial and continuing unemployment claims, Challenger layoffs, BLS nonfarm payrolls – painted a picture of a modestly cooler labor market at secularly tight levels. All this makes for a pretty easy Fed decision next week – sit on your hands and wait for more data and more information.
Source: Bureau of Labor Statistics, Bloomberg, Advisor Perspectives, Fundstrat, Sonu Varghese, Ned Davis Research
🧁 Weekend sprinkles 🧁
Here are the ideas, sights, and sounds that caught my attention this week – perfect for quiet time over the weekend.
Blogs
The Ramp Report – Unplug to Recharge (Ramp Capital)
Verdad Capital – Meme Stonks Revisited (Lionel Smoler-Schatz)
Bloomberg - Inflation Feels Bad No Matter How You Define It (Claudia Sahm)
Collaborative Fund – Lazy Work, Good Work (Morgan Housel)
Liberty Street Economics – Can Discount Window Stigma Be Cured (Olivier Armantier)
Books
Kyla Scanlon – In This Economy? (Amazon)
Podcasts
New Hampshire Public Radio – Bear Brook: A True Crime Story (Spotify, Apple Podcasts)
Movies
The Contractor – Chris Pine, Ben Foster, Kiefer Sutherland (IMDB)
House of Gucci – Adam Driver, Lady Gaga, Jared Leto, Jeremy Irons, Selma Hayek, Al Pacino (IMDB)
Don’t Worry Darling – Florence Pugh, Harry Styles, Olivia Wilde, Chris Pine (IMDB)
Music
Steve Aoki feat. Walk the Moon – Back 2 U (Spotify, Apple Music)
Justin Timberlake – Technicolor (Spotify, Apple Music)
Luke Combs – Beautiful Crazy (Spotify, Apple Music)
Matt & Kim feat. Soulja Boy & Andrew W.K. (Spotify, Apple Music)
Kanye West – Saint Pablo (Spotify, Apple Music)
Pop Culture
Roaring Kitty Live Stream (YouTube)
That’s all for today.
Blake
Welcome to The Sandbox Daily, a daily curation of relevant research at the intersection of markets, economics, and lifestyle. We are committed to delivering high-quality and timely content to help investors make sense of capital markets.
Blake Millard is the Director of Investments at Sandbox Financial Partners, a Registered Investment Advisor. All opinions expressed here are solely his opinion and do not express or reflect the opinion of Sandbox Financial Partners. This Substack channel is for informational purposes only and should not be construed as investment advice. The information and opinions provided within should not be taken as specific advice on the merits of any investment decision by the reader. Investors should conduct their own due diligence regarding the prospects of any security discussed herein based on such investors’ own review of publicly available information. Clients of Sandbox Financial Partners may maintain positions in the markets, indexes, corporations, and/or securities discussed within The Sandbox Daily. Any projections, market outlooks, or estimates stated here are forward looking statements and are inherently unreliable; they are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.