“Yes, AI does have great potential and it does appear to be the ‘next big thing’,” wrote Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. “But I don’t see how that promise can offset the reality of higher interest rates and more pressure on the economy, at least not for a sustainable period.” Click here to read the full article.
What’s in Today’s Report:
Futures are slightly lower as the looming jobs report helps offset soft economic data and disappointing earnings.
Economically, German Industrial Production, German Retail Sales, and Japanese Household spending all missed estimates.
On earnings, AMD became the latest widely held company to miss earnings, positing a material revenue shortfall.
Today focus will be on the Jobs Report and expectations are as follows: Job Adds: 250K, UE Rate 3.7%, Wages 0.3% m/m, 5.1% y/y. If the numbers are in the lower end of the “Just Right” range that will spur more hopes of a Fed pivot between now and year-end, and stocks will likely rally. Away from the jobs report there are also several Fed speakers including: Williams (10:00 a.m. ET), Kashkari (11:00 a.m. ET) and Bostic (12:00 p.m. ET) but they shouldn’t move markets (expect them to be hawkish in tone but not say anything new).