Jobs Data
Jobless claims point to a very strong labor market. First-time filers for unemployment insurance came in at 197,000. That matches last week, but last week was revised up to 198,000. Continuing claims hit 1.701 million. The current streak of low first-time filings ranks among the strongest on record. With 3 to 4 weeks of these numbers stacking up, the open question is how they show up in tomorrow's unemployment rate and non-farm payroll report.
Yesterday's ADP private payroll number was 90,000. Tomorrow's forecast is near 90,000 jobs with a 4.1% unemployment rate. The ADP print may set up a payroll number above 100,000, though ADP and payrolls do not always move together. The payroll report is the top data point of the month: it signals the economy through jobs and gives wages, the first inflation reading of the month.
The ADP breakdown showed bright spots in manufacturing, construction, education, and leisure and hospitality. Weakness showed in financial services and professional business services. The financial-services weakness is a letdown, since financials already did poorly as stocks this quarter and this economy might have made them a strong spot instead.
Personal income and outlays gave PCE data yesterday, better than expected. The year-over-year figures came in 3/10 below forecasts.
Rates, Oil, and the Fed
Crude oil and bond yields have been the two biggest daily drivers of the market for months. The 10-year yield hit 5.3% overnight and sits at 5.28%. It was lower a half hour to 45 minutes earlier, then drifted back up, a pattern repeated several days this week: open lower, then climb. These are historic levels, highs in yield not seen in 20, 22, or 24 years. A 20-year chart of the 10-year yield shows the level is right at that peak.
Crude oil came off its morning highs, up about 6/10 of a percent just below $91, still green on the day after trading higher.
Odds of the Fed raising rates sit at 37%. Fed funds futures have swung 50 percentage points, at times running from 90 to 60 to 30. The odds dropped sharply after this week's prints. The next three prints to watch are jobs, CPI, and PPI.
Micron (MU) Earnings
Micron (MU) posted strong earnings, long awaited. The stock is down slightly pre-market, a rounding error against its expected move. Earnings per share came in at $33.42 per diluted share, above the $31.25 to $31.50 range guided. Revenue was $54.23 billion, up 379% year over year. Gross margins were 87%. Operating income was $43.75 billion and net income $37.7 billion. The data center number was up over 1,040%.
The stock is down despite these numbers. The reason: much of this strength may already be priced in, and companies like Micron (MU) trade like commodities, so the market worries about a swing from low supply to high supply ahead. The stock is up over 400% this year, which raises the bar for any reaction. A 1% pullback is affordable given results this strong. The market widely expected a beat and raise, and got it. The NASDAQ is up five of the last six quarters, and tech valuations stay hot despite names sitting off their highs.
Constellation Energy (CEG) and Amazon (AMZN)
Constellation Energy (CEG) and Amazon (AMZN) both rose on a 20-year power purchase agreement. The deal adds 190 megawatts of nuclear capacity at the Calvert Cliffs nuclear plant and unlocks over $3 billion in investment to support AI-driven data center electricity demand. This marks another partnership tying hyperscalers to AI, now centered on energy. Everything done with AI takes energy, and Constellation Energy (CEG), a nuclear company investing in nuclear, sits at the center of that.
Amazon (AMZN) chief security officer Steven Schmidt spoke yesterday about the growth, demand, and pace of the AI frontier, and saw no slowdown. He described fast evolution and the ongoing battle between attackers and defenders in security.
Google / Alphabet (GOOGL)
Google announced Gemini 4 Argon, its most advanced AI model, with major gains in coding, cyber security, and complex professional work. CEO Sundar Pichai signed an AI safety agreement with President Trump this week. Alphabet (GOOGL) shares are higher pre-market. The AI leaders appear to take turns with big announcements: Amazon (AMZN) on energy today, Alphabet (GOOGL) on new products.
