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1. The weak labor market update has opened a potentially unwelcome chapter in the US economy’s storyline.

“Tariffs are a tax. Inflation has eroded real income. The economy is pretty late-cycle. The US labor dynamic continues to be ‘not firing, not hiring,’” writes Goldman Sachs Partner Richard Privorotsky.

“The open question is whether this accelerates into a broader slowdown in the second half.”

And it’s why some trading desks tend to fall back on a more classic approach of cyclicals versus defensives as a better instrument to position for a slowing economy. Goldman’s cyclicals vs defensive basket has reached all-time highs twice this year and is pricing a growing economy, while valuations are back at pre-April highs. That set-up has been driven by both a cheap defensive leg and a very expensive cyclical one, the bank’s traders write in a note to clients.

2. US technology and tech-related stocks now account for 55% of the US stock market, a record.

It has exceeded the 2000 Dot-Com Bubble levels by 5%.

By comparison, defensive stocks now reflect 18% of the market.

Source: Global Markets Investor

3. Investors are getting more cautious when firms miss analyst expectations.

An earnings beat and 20 billion share buyback were not enough for Uber. Investors might have been looking for a more significant beat after a 48% gain in the stock this year.

"Our platform strategy is working, with record audience, frequency, and profitability across Mobility and Delivery," said Uber CEO Dara Khosrowshahi in a statement. "But we're still only beginning to unlock the platform's full potential, now with 20 autonomous partners around the world."

4. China catching up on frontier AI model performance.

5. Some luxury stocks are ready for a bounce.

Prada’s portfolio of brands includes Prada, Miu Miu, Church’s, Car Shoe and Marchesi 1824, and it has now also acquired Versace. Following heavy investments across the group between 2016 and 2019, Prada and Miu Miu have been experiencing very solid trends since 2021, driving the ongoing recovery of sales densities and profitability following suit. While the Versace acquisition adds execution risk in the short term and will require the Group to invest in restoring brand desirability and profitability, the Prada Group still offers some of the most attractive fundamentals in the luxury sector.

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