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JOBS COOL, FED STILL HOT
- June payrolls came in at +57,000, well under the +110,000 estimate.
- April and May were revised down by a combined 74,000 jobs.
- Unemployment slipped to 4.2%, but not for the best reason: the labor force shrank by 720,000 people.
- Labor-force participation fell to 61.5%, the lowest in more than five years.
- Leisure and hospitality lost 61,000 jobs, a notable hit to the consumer-service economy.
- Average hourly earnings rose $0.13 in June.
- Fed setup: weaker hiring argues for patience, but inflation is still above target, so the market is back to parsing every Fed sentence.
- - Fed Funds Futures Now only ONE Raise by Year-End

DOW RECORD, NASDAQ WOBBLE
- The Dow closed at a record 52,900.07 after the soft jobs report cooled near-term rate-hike fear.
- S&P 500 finished roughly flat.
- Nasdaq fell about 0.8% as chip stocks dragged the tape lower.
- The Philadelphia Semiconductor Index dropped more than 5% on July 2.
- Apple rose nearly 5% on iPhone launch optimism.
- Nvidia and other AI/chip names stayed volatile after a huge first-half run.
- Goldman client data showed hedge funds dumped tech hardware and semiconductor exposure for a fourth straight week.
- The issue is not "AI is dead"; the issue is when all the AI capex turns into visible returns.

TESLA BEATS DELIVERIES, STOCK STILL GETS HIT
- Tesla delivered 480,126 vehicles in Q2, a record quarter and above Wall Street expectations.
- Production was 451,758 vehicles.
- Model 3/Y made up 467,762 deliveries.
- Other models were only 12,364.
- Energy storage deployments were 13.5 GWh.
- Shares fell about 7.5% after the report, the worst one-day drop in roughly a year.
- Pressure points: margin worries, price cuts, demand sustainability, and the market questioning whether the EV story is enough at a very rich valuation.
- As of Monday afternoon, TSLA was around $420 with a market cap near $1.49 trillion and a trailing P/E around 385.

MORE MUSK - TESLA PUTS AI ON A BUDGET
- Tesla reportedly capped employee spending on third-party AI tools at $200 per week starting July 6.
- Grok was reportedly exempt from the cap.
- Setup: Tesla wants employees using AI, but not running up unlimited outside-token bills.
- Cost-control angle: AI is becoming a normal operating expense, not a science project.
- Funny part: even at Tesla, the AI bill apparently needs a limiter.

NVIDIA SERVER DELAY NOISE
- Nvidia shares held up despite reports of delays tied to its next AI server architecture.
- SemiAnalysis reportedly said Nvidia's Kyber architecture could slip by up to 12 months into 2028.
- Nvidia pushed back and said its development roadmap is unchanged.
- Mizuho called the delay report "noise" and said it was not a material issue for the stock.
- NOTE:  Story is still report-driven, not company-confirmed.

ORACLE - CANARY?
- Oracle’s stock fell 19% this week, the steepest drop since August 2001, the depths of the dot-com bust.
- The company’s capital expenditures surged 162% in the latest fiscal year, with almost $24 billion in negative free cash flow and $130 billion in debt.
- Co-founder Larry Ellison has fallen behind the Google co-founders, Amazon’s Jeff Bezos and Michael Dell on the list of the world’s richest people.
- After the company reached a peak market cap of $900 billion in September, on enthusiasm about Oracle’s AI customers, the stock has lost about 55% of its value.
- The crux of the problem is that for Oracle to fulfill its AI infrastructure commitment, primarily to OpenAI, it’s having to raise record amounts of debt, creating balance sheet risk while focusing on lower-margin offerings.

SPACEX ENTERS THE INDEX MACHINE
- SpaceX is set to join the Nasdaq-100 on Tuesday after its recent IPO.
- The company's valuation is around $2.1 trillion.
- Its Nasdaq-100 weight will initially be under 1% because of limited public float.
- Index-tracking funds tied to the Nasdaq-100 will need exposure, creating automatic demand.
- Key issue: big valuation, small float, forced index buying.
- Watch the lockup calendar: index inclusion can create near-term demand, but employee and insider selling later can change the supply picture.
- Podcast angle: retail gets "SpaceX exposure" through QQQ, but not necessarily much exposure at first.

STRATEGY SELLS BITCOIN TO PAY THE BILLS
- Strategy sold 3,588 bitcoin last week for about $216 million.
- Proceeds are being used for preferred-stock dividends and dollar reserves.
- The company still holds 843,775 bitcoin, valued around $52 billion.
- Q2 included an $8.32 billion paper loss tied to bitcoin weakness.
- The company's average bitcoin purchase price is around $75,476.
- Recent sale prices were around $59,000 to $61,000.
- Funny part: the former "never sell" bitcoin treasury poster child is now selling bitcoin to service the capital structure.
- Watch for copycats: any company that copied the bitcoin-treasury model may face the same liquidity math if crypto stays weak.

MICROSOFT CUTS AGAIN
- Microsoft said it will cut about 4,800 jobs.
- Shares slipped nearly 1%.
- Job cuts landed while investors are still rewarding AI spending.
- The message? spend heavy on AI, cut elsewhere.
--- Yes, AI is killing jobs...

SERVICES HOLD AT 54
- ISM non-manufacturing PMI came in at 54.0.
- Result matched expectations.
- Reading above 50 means services activity is still expanding.
- Market took it as firm enough for growth, not hot enough to force an immediate Fed move.

EARNINGS SEASON STARTER
- Delta and PepsiCo report this week.
- Levi Strauss also reports this week.
- Delta is the read on travel, premium demand, fuel, and consumer resilience.
- PepsiCo is the read on snack pricing, volume, and lower-income consumer pressure.
- Q2 earnings bar is high after the market's strong second-quarter rally.

OIL BACK TO PRE-IRAN WAR LEVELS
- Brent settled around $71.99.
- WTI settled around $68.55.
- OPEC+ approved another output-target increase for August, adding 188,000 barrels per day.
- Since April, planned increases add up to nearly 800,000 barrels per day.
- Crude exports through the Strait of Hormuz are recovering, taking some geopolitical premium out of the market.
- Saudi Arabia cut official selling prices, another sign the market is shifting from shortage panic to buyer resistance.
- Good for headline inflation if it sticks; bad for energy bulls who were pricing war-premium oil.

SPR DRAWDOWN
- U.S. Strategic Petroleum Reserve fell by 6.2 million barrels.
- SPR level is now 319.5 million barrels.
- That is the lowest level since April 1983.
- Drawdown comes while oil prices are easing and OPEC+ is adding supply.
- Energy setup: lower crude helps inflation, but reserve levels are historically thin.

MORE OIL - CHINA BUYS THE DIP
- China stepped up Middle East oil purchases as prices fell.
- Saudi Arabia cut export prices to Asia to a six-year low.
- Brent settled at $71.99.
- WTI settled at $68.55.
- OPEC+ approved another August production increase of 188,000 barrels per day.
- Planned OPEC+ supply increases since April now total nearly 800,000 barrels per day.
- Lower oil supports disinflation but raises questions about global demand.

VEGGIE ALERT

Item	Status
Asparagus	ESCALATED
Artichokes	EXTREME
Cantaloupe	EXTREME
Fennel (Anise)	EXTREME
Green Leaf / Red Leaf Lettuce	ESCALATED
Honeydews	EXTREME
Iceberg Lettuce	EXTREME
Limes (175's and larger)	ESCALATED
Green Bell Peppers	ESCALATED
Romaine Lettuce	EXTREME
Romaine Hearts	EXTREME
White Asparagus	ESCALATED
Snacking Tomatoes (Grape & Cherry)	ESCALATED

 

PUBLIC SERVICE ANNOUNCEMENT
- Conair Recalls Over One Million Cuisinart Grill Brushes Due to Ingestion Hazard
- Product: Metal Wire Bristle Grill Brushes
- 1 Million or so
- BUT none of these are any good.....

CHINA NOT MESSING AROUND
- A Chinese court handed a rare death sentence to a former official on corruption charges, in a severe punishment underscoring the intensity of President Xi Jinping’s anti-graft crackdown.
- Yang Youlin, a former vice director of an economic zone in the eastern city of Nanjing, was sentenced to death on Monday for taking more than 2.21 billion yuan ($325 million) of bribes between 2013 and 2023, according to the state broadcaster China Central Television.
- Yang was found guilty also of embezzlement, abuse of power and money laundering. His crimes were “exceptionally grave” and caused massive losses, warranting the capital sentence, CCTV reported, citing the Changzhou Intermediate People’s Court in Jiangsu province.

DRONES
- Dronemaker AeroVironment reported fourth-quarter earnings that beat on the top and bottom lines.
- The company’s funded backlog of $1.2 billion was up substantially over last year, but grew only slightly from the $1.1 billion last quarter.
- Autonomous systems were a strong point with revenue of $492 million that beat the $402 million StreetAccount expectation.

 

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