After a pre 4th of July rally which almost took the industrial average over 27,000 for the first time ever the Dow closed off a shortened trading week with a Friday selloff of 43 points to 26,922 on very light volume. For the week the Dow gained about 322 points or 1.2%.
The June labor report came in better than expected with payrolls showing 224,000 new jobs. The gurus had called for 165k new jobs and back in May the number had fallen unexpectedly to 75,000 but that appears to have been an anomaly. The unemployment rate came in at 3.7% up slightly from 3.6%. Hours worked increased 0.2% and hourly earnings rose a modest 0.2% and are now up 3.1% yoy which is an acceleration over the 2.9% pace seen in 2018. Wage growth over the past year now stands at 4.6% which is an indicator that consumer purchasing power remains solid. This jobs report might cause the Federal Reserve to rethink a rate cut later this month when they meet. The gurus had expected the Feds to cut interest rates, but this report might lower the odds of that happening.
Tesla reported its latest quarterly production and delivery numbers and they came in better than expected. The news sent Tesla’s stock higher as the shorts bolted and many are now claiming that Tesla is here to stay and that this quarter shows they have solved the production problem and will now focus on becoming a software company. For the quarter Tesla produced 87,048 vehicles and delivered 95,200 vehicles of which 77,550 were Model 3’s. The company also said that orders in Q2 exceeded deliveries giving the company a backlog heading into Q3.