Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events moving markets. It is Thursday, July 3. Jobs Day.

Read this month’s update on the Contrarian Portfolio here.

State of Play

Non-farm payrolls, which we’ve been waiting for all week, just came in better than anticipated. As we eye or board of indicators for signs of direction at 0845 ET, risk on is the story:

* Stock index futures are moving higher after that jobs number, led by small caps (usually a good sign). The Russell 2000 is up 1%. S&P 500 and Nasdaq ~0.3% to the good;

* Cryptos are moving higher. Bitcoin is up 2% to trade around $109,400;

* Bonds are seeing a few bids. The 10-year yield is down 3 basis points to 4.26% (yields move inversely to prices);

* Commodities are quiet after a broad rally yesterday. Nothing to report there.

Today’s Known Events

Non-farm payrolls were obviously the big one. To go through the numbers:

* 147,000 new jobs versus 111k anticipated and 144k previous (revised upward from 139k)

* That drops the unemployment rate to 4.1% (4.3% anticipated/4.2% previous)

* Private payrolls were a miss however, printing at 74k (105k/137k)

* Average hourly earnings of 0.2% month-over-month (0.3%/0.4%)

* Average hourly earnings of 3.7% year-over year (3.9%/3.8%)

There are others worth keeping an eye on as well, however:

* We just had initial jobless claims come in at 233 versus 240k anticipated and 236k last week. The four-week average is 245k.

* US trade deficit was $71.5 billion ($69.9b/$61.6b)

* At 0945 we’ll get the final June figures for PMIs, but these will likely just confirm what was in the flash report.

* Factory orders are at 1000. The expectation here is for an increase of 8.1% MoM in May

The Bottom Line

Happy days are here again! The market is moving further into fresh record highs after this jobs report. Investors don’t seem worried about a high-for-longer Fed in all of this. Or at least not yet. For whatever reason that appears to be on the back burner.

Friendly reminder that fresh record highs are historically not a good time to put money into risk assets. One could go as far as to say that is a sucker’s move.

Having said that, it’s hard to see how we’ll go anywhere but up in today’s shortened trading session. Maybe beyond that as there is little on the calendar for next week.

Markets close early today, at 1300 ET and are closed all day tomorrow for July 4. We’ll be back on Monday to preview next week’s action.

Housekeeping

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