00:00Wall Street stocks recovered some ground on Wednesday after technology conglomerate alphabet rose on a favourable antitrust ruling.
00:08But gains were muted as investors digested softer-than-expected labour market data and in sell-off in long-term global government bonds.
00:16Job openings, a measure of labour demand, dropped $176,000 to $7.181 million by the last day of July, the Labor Department's Bureau of Labor Statistics said.
00:27I think what we're seeing really is the market kind of treading water ahead of hopefully a rate cut coming to us in a couple of weeks.
00:36But the impetus behind that rate cut is going to be a really important part of the discussion.
00:41Is this because we're actually winning the war against inflation?
00:44Or could the motive be a little bit more suspicious to markets in that growth is slowing?
00:50And part of that showed up today in the JOLTS report where we actually saw a meaningful reduction in the amount of open jobs that were available for employees searching for new work.
01:01So that kind of is a signal that growth might be slowing and the reason we get a rate cut might not be the one the market has priced in at the moment.
01:08So as we take a step back and look at what the overall impact of interest rates have been in the economy over the last year and a half, it's a really important discussion.
01:19And that's why the market reacted so violently to the upside when there was even a whiff of confirmation from Chairman Powell that rates might be going lower.
01:27And the reason is simply that the cost of capital is restrictive right now and it's impacting a lot of different places.
01:36It is slowing growth for a lot of companies.
01:40We did see Q2 earnings for the S&P 500 up about 11% and revenues were up about 6%.
01:47Both of those numbers were better than we expected overall from the S&P 500.
01:51The problem we have with that data right now is 80% of that is driven by 10 stocks.
01:58We all know the Magnificent Seven names.
02:01If we sprinkle in names like Palantir and Broadcom, now you're accounting for the vast majority of that growth by just 10 companies.
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