Let's Get It ON!

Three, two, one... lift-off? Maybe. Maybe "they" sell the news if there is news. The reality is that "they" will probably sell the market if that "big, beautiful" bill does not pass in the House of Representatives. There is a good chance that final passage is mostly priced in, even if that passage does not come ahead of Pres. Trump's self-imposed July 4 deadline. As for the House... what a night that crew had. Oh, boy.

Five Republican representatives voted with their Democratic party colleagues on Wednesday evening on a procedural "rule" that kept the bill in question from proceeding towards a floor-wide vote. Pres. Trump chimed in on his Truth Social platform. Vice President JD Vance got involved as well. Finally, at about 01:30 on Thursday morning, Speaker Mike Johnson told reporters that progress was being made.

Roughly 90 minutes later, the Speaker announced that he had the votes required. The Wall Street Journal is reporting that a final floor-wide vote could happen before 8 a.m., so depending on when you read this, the House may have already decided the short-term fate of the president's bill.

Trade Deal

That made three. Sort of. Not exactly 90 deals in 90 days, but with six days to go until the president's other self-imposed deadline, on trade, July 9, a trade deal was apparently signed between the U.S. and Vietnam. According to what information we have, goods imported from Vietnam to the U.S. will face a 20% tariff, while goods shipped to Vietnam from other countries before heading to the U.S. will face a 40% tariff.

In return, Vietnam has agreed to open that nation to imports from the U.S. with no tariffs attached. U.S. exporters, according to Pres. Trump, will have total access to Vietnamese markets, which is something they have never had before. This deal comes after the U.S. had already signed trade deals or trade "frameworks" with the U.K. and with China.

Just an FYI, I initiated a long position in ON Semiconductor ON as quickly as I could upon hearing this news. On Semiconductor operates more than one subsidiary inside Vietnam. At zero-dark thirty on Thursday morning, that trade is already up almost 3%....​

More important than the breakout from the Inverted Head & Shoulders pattern that stretched from early February into late May for ON, will be, for now, what happens at the 200-day simple moving average. If this level is held, portfolio managers with long-side exposure will feel comfortable increasing that exposure.

Who Let the DDOG Out?

On Wednesday evening, S&P Dow Jones Indexes announced that big-data cloud services provider Datadog DDOG would be added to the S&P 500 effective July 9, replacing Juniper Networks JNPR. Juniper was removed from the index as that company has been acquired by Hewlett Packard Enterprise HPE. DDOG is up more than 10% overnight after having rallied more than 2% on Wednesday. Bank of America BAC, interestingly named Datadog one of the bank's top ten ideas for the third quarter on Tuesday.

Jobs Day

Today is June Jobs Day. Jobs are usually the lead story on the day once a month that the Bureau of Labor Statistics releases the results of its two labor market surveys for the month prior. That may again be the case this morning, but given what is happening in D.C. now, that is not the case ahead of this release. My expectations are below. I am not that far off from consensus on most categories.

Labor market economists were, however, surprised by the also monthly ADP Report on private sector job creation for June. The headline print crossed the tape at -33,000 jobs created (yes, job losses) vs. the 99,000 jobs that had been expected, and down from 29,000 jobs created in May.

Interestingly, as Peter Boockvar pointed out later in the day and Dougie posted in his Diary here at TheStreet Pro, the losses were felt mainly across those working for small businesses. Businesses with 1 to 19 employees contributed -29,000 to that final number while businesses with 20 to 29 employees contributed -18,000. Larger businesses with 250 employees or more, added 30,000 jobs.

Markets

The S&P 500 added 0.47% on Wednesday, landing at another all-time record close. That index was outperformed by the Nasdaq Composite which was up 0.94%. These two indices were the market laggards and were outdone by a number of mid-major indices. The Dow Transports, Philly Semiconductors, KBW Banks, Russell 200, S&P 400 and S&P 600 all gained at least 1.17% for the day though none of the above gained 2%. This was despite Treasury yields that increased across the slope of the curve for a second straight session.

Seven of the 11 S&P sector SPDR ETFs ended the regular session on Wednesday in the green led by Energy XLE and Materials XLB. Defensive sectors underperformed as Health Care XLV and the Utilities XLU occupied the bottom two rungs on the daily performance tables.

Winners beat losers by a rough 11-to-4 margin at the NYSE and by more than 2 to 1 at the Nasdaq. Advancing volume took a commanding 75.2% share of composite Nasdaq-listed trade and a 71.1% share of composite NYSE-listed activity. While that action was positive and a continuation of our confirmed and re-confirmed uptrend, aggregate trading volumes started to decrease ahead of today's half-day session and the holiday on Friday.

Dividend Increases

Many of the banks have been increasing dividends this week in response to the Fed's stress tests. On Tuesday, JPMorgan Chase JPM and Wells Frago WFC, both Sarge longs, along with others, stepped to the plate​

WFC blasted off from an Inverted Head & Shoulders pattern with a $77 pivot last week. The stock made a new all-time high on Wednesday. My current target price is $92.

June Employment Situation (08:30 ET)

Non-Farm Payrolls: Expecting 125K, Last 139K.

Unemployment Rate: Expecting 4.3%, Last 4.2%.

Underemployment Rate: Expecting 7.8%, Last 7.8%.

Participation Rate: Expecting 62.3%, Last 62.4%.

Average Hourly Earnings: Expecting 3.9% y/y, Last 3.9% y/y.

Average Weekly Hours: Expecting 34.3, last 34.3 hours.

Other Economics 

(All Times Eastern)

09:45 - S&P Global Services PMI (Jun-F): Flashed 53.1.

10:00 - ISM Non-Manufacturing Index (Jun): Expecting 50.5, Last 49.9.

10:00 - Factory Orders (May): Expecting 8.4% m/m, Last -3.7% m/m.

10:30 - Natural Gas Inventories (Weekly): Last +96B cf.

1:00 p.m. - Baker Hughes Total Rig Count (Weekly): Last 547.

1:00 p.m. - Baker Hughes Oil Rig Count (Weekly): Last 432.

The Fed 

(All Times Eastern)

No public appearances scheduled.

Today's Earnings Highlights 

(Consensus EPS Expectations)

No significant quarterly earnings scheduled.

At the time of publication. Guilfoyle was long ON, JPM, WFC equity.