Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Wednesday, July 2.

Hot off the press: Read this month’s update on the Contrarian Portfolio here.

State of Play

Tesla (TSLA ) just reported second quarter deliveries. These fell short of estimates but apparently not enough to scare investors as the stock is moving higher in the pre-market. As we eye or board of indicators for signs of direction at 0915 ET:

* Stock index futures aren’t doing anything. No major US index is moving more than 0.2% from the break-even point;

* Commodities are moving higher. WTI crude oil is up 1.2% to trade around $66/barrel. Copper +2%. Gold is unchanged. Silver +1%;

* Cryptos also up a bit. Bitcoin +1% to $107,500;

* Bonds are selling off a bit. The 10-year yield is up 3 basis points to 4.29% (yields move inversely to prices).

Today’s Known Events

Tesla sales were the big one. Global sales dropped more than anticipated but not by much. There was good news on the autonomous vehicle front, which helps sentiment.

Rivian (RIVN ) for its part also reported a drop in Q2 deliveries. Maybe this is an indication consumers are starting to scale back big-sticker item purchases? It’s worth asking the question…

ADP Nonfarm Payrolls declined by 33,000 versus an expectation of +99k. Last month was revised downward to also become negative.

This is a big miss. It should have no bearing on the government’s non-farm payrolls figure, which will be out tomorrow. For this reason this will likely be ignored by the market. But there is no reason the ADP data is any less valuable and bears keeping an eye on for this reason. Over the long term, you figure the ADP and government figures will track each other.

The Bottom Line

Are investors being too sanguine about Tesla deliveries? Quarterly sales dropped year-over-year for the second straight period. But the number (384k) was close enough to analyst estimates (389k) to be considered a wash. Plus the autonomous vehicle stuff and it’s enough for investors to throw caution to the wind and bid up the stock.

The ADP figure, ignored by the market, could be a cause for concern. As we said in our monthly portfolio update, jobs growth has so far held up. This could be a sign that this is starting to turn. Or it could be an outlier. Either way, the market don’t care. If tomorrow’s non-farm payrolls number reinforces this trend, there will certainly be a sell-off, if only a short term one. But then, the ADP figure is not a leading indicator for non-farms.

Add it up and today’s data really wasn’t great. Investors seem to be ignoring a lot of potentially bad news. That may be because they have good reason to look past all of it, at least until tomorrow. Or it could be a sign of tougher days ahead….

Coming Up…

Tomorrow’s briefing will follow non-farm payrolls at 0830. It will be the last briefing before July 7 as markets are closed this Friday for the July 4 holiday.

Housekeeping

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Tesla Delivery Relief, Concern For Payrolls