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Good morning investors! S&P 500 closed at fresh record high Thursday on hope jobs report won’t be too cold or hot.
Fun fact: Since 1950, the S&P 500 has logged a positive return roughly 55% of trading days, but more than 90% of multi-year gains come from a small fraction of sessions.
Today we cover:
The labor market
Earnings
More tax changes?
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📊 Economy and News
US Labor Market Softens in August 2025
Jobless Claims Rise: Initial unemployment claims increased by 8,000 to 237,000 for the week ending August 30, exceeding economists' forecasts of 230,000.
Private Payrolls Slow: Private employment grew by 54,000 jobs in August, down from 106,000 in July, falling short of the forecasted 65,000.
Labor Market Challenges: Economists attribute the slowdown to trade tariffs and immigration policies impacting hiring in construction and restaurants.
Unemployment Outlook: The unemployment rate is projected to rise to 4.3% from 4.2% in July, with nonfarm payrolls expected to increase by 75,000 jobs.
Federal Reserve Implications: A potential rate cut is signaled for the September 16-17 meeting, balancing labor market risks and persistent inflation concerns.
Global hits:
Brazil’s trade surplus jumps 35.8% in August despite U.S. tariffs. while Canada’s trade deficit shrinks to $4.9 billion.
Eurozone retail sales fall 0.5% in July, raising economic concerns.
U.K. firms report stable price inflation, lower employment growth.
Shocking: Trump asks Supreme Court to let him fire FTC Commissioner Rebecca Slaughter.
Fidelity Investments reported record-high average 401(k) and IRA balances at $137,800 and $131,366, respectively, in Q2, with the number of 401(k) and IRA millionaires surging 16% to all-time highs of 595,000 and 501,481, driven by consistent savings and a robust market recovery.
Lastly, Elon Musk says he was invited to White House reception but will not attend.
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📈 Stocks
S&P 500 6,502.08 (+0.83%)
DJIA 45,621.29 (+0.77%)
NASDAQ 21,707.69 (+0.98%)
BRENT CRUDE 66.99 (-0.90%)
* Prices as of Sep 5th, 12:20 AM UTC
Lululemon and Broadcom report
Lululemon beat second-quarter earnings and revenue estimates, but issued a weak 2025 outlook. The company said the impact of tariffs and the removal of the de minimis exception are hitting its sales. Shares of the company plunged 13% after the earnings announcement.
Broadcom beat analyst estimates for its fiscal third quarter and guided above views for sales in the current period. It reported a 22% year-over-year revenue increase to $15.9 billion in Q3 FY2025. Net income rose to $8.4 billion from $6.1 billion, with diluted EPS at $1.69, up from $1.24 in Q3 FY2024. The company forecasts Q4 revenue at $17.4 billion.
Don’t forget: Waymo will begin its first airport service area in California in the fall.
Boeing says it is hiring new workers to replace employees in its defense unit.
Good to know: Nvidia-backed Cohesity eyes 2026 IPO with valuation rivaling $17 billion Rubrik. Elsewhere, Huawei launches second trifold smartphone at $2,500 as it looks to cement comeback.
General Motors is cutting output at one of its main electric-vehicle factories, the latest automaker to pull back on EVs as the administration yanks federal support for green cars.
💵 Personal Finance
Sen. Ruben Gallego, D-Arizona, introduced the "You Earn It, You Keep It Act" to eliminate federal taxes on Social Security benefits. A similar House bill was introduced by Rep. Angie Craig, D-Minnesota. The proposal would also apply Social Security payroll taxes to annual earnings above $250,000, extending the program's solvency to 2058, per the Social Security chief actuary.
Currently, up to 50% of benefits are taxable for individuals with combined income between $25,000-$34,000 (or $32,000-$44,000 for couples), and up to 85% for higher incomes.
President Trump’s recent law includes a temporary $6,000 deduction for seniors aged 65+, phasing out for individuals earning over $75,000 or couples over $150,000. This benefits middle-income seniors most but doesn’t eliminate taxes entirely.
The Senior Citizens League supports Gallego’s bill, calling it a “commonsense step” to help seniors keep more of their benefits. However, with Social Security facing a trust fund shortfall by the mid-2030s, the proposal’s passage remains uncertain.
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.