This week’s concerning data from the ISM, JOLTs report, and ADP… what will tomorrow’s jobs report bring?… where the market goes next from Louis Navellier and Luke Lango… Eric Fry quantifies his 10X-stock approach
This week has brought some concerning economic data in the lead-up to tomorrow’s all-important jobs report.
Tuesday, we got the August ISM Manufacturing Report – a monthly indicator that shows the health of the U.S. manufacturing sector.
Here’s our hypergrowth expert Luke Lango from Tuesday’s Innovation Investor Daily Notes:
On the surface, the data looked fine: the headline ISM index actually topped expectations, new orders ticked higher, and prices paid edged lower.
But the devil was in the details—and in this case, the details screamed trouble…
Every month, the ISM publishes commentary from 10 manufacturing firms. [On Tuesday], all 10 were negative. Some even said business conditions are worse than during the 2008–09 Financial Crisis.
The throughline was blunt: tariffs are hammering costs, breaking supply chains, and choking demand both at home and abroad.
The tone? Contraction, instability, and deep concern.
To Luke’s point about “tariffs are hammering costs,” yesterday, Yahoo! Finance highlighted an ISM survey respondent from the electrical equipment industry. This person said his company has raised prices 24%, but it’s all going to offset tariffs – zero margin expansion.
Next, yesterday brought an underwhelming Job Openings and Labor Turnover Survey (JOLTs) report.
Here’s MarketWatch:
The number of job openings in the U.S. fell in July to the second-lowest level since the pandemic, while hiring patterns signaled the labor market has weakened.
Job postings dropped to 7.18 million in July from 7.36 million in the prior month… It was the lowest level since last fall and the second smallest reading since 2020…
Companies simply aren’t hiring as many people as they grapple with ongoing uncertainty tied to higher U.S. tariffs.
And while today’s jobs market has been described as “low hire, low fire,” those firings are, in fact, picking up.
Here’s more color from the latest report from outplacement firm Challenger, Gray & Christmas, released this morning:
U.S.-based employers announced 85,979 job cuts in August, up 39% from the 62,075 announced in July. It is up 13% from the 75,891 announced in the same month last year…
So far this year, companies have announced 892,362 job cuts, the highest YTD since 2020 when 1,963,458 were announced.
It is up 66% from the 536,421 job cuts announced through the first eight months of last year and is up 17% from the 2024 full year total of 761,358.
And that brings us to this morning’s ADP Jobs report.
Whereas forecasts called for privately run businesses to add 75,000 jobs in August – already a middling number – the figure came in at just 54,000.
Here’s Nela Richardson, chief economist of ADP:
The year started with strong job growth, but that momentum has been whipsawed by uncertainty.
A variety of things could explain the hiring slowdown, including labor shortages, skittish consumers, and AI disruptions.
The ADP jobs report should be taken with a grain of salt. It isn’t a great predictor of the official jobs report that we’ll get tomorrow morning. Still, not a great sign.
As I write Thursday, stocks are slightly higher in the wake of the poor report. There’s no selloff because Wall Street views the jobs weakness as supportive of rate cuts from the Fed in two weeks.
Bottom line: So far, this week’s data tells us that the Fed can no longer focus purely on inflation risk. We’ll see what tomorrow’s jobs report says.
With economic data trending the wrong direction, we’re likely in for interest-rate cuts, the question is “how many?”
As we covered in the Digest, in his speech at the Jackson Hole Symposium last month, Federal Reserve Chair Jerome Powell signaled that the Fed is set to cut key interest rates at its September meeting in less than two weeks.
Some analysts have floated the idea that the Fed should consider a 50-basis-point cut in September. To me, that move would read less “confidence” and more “fear.”
A half-point cut would essentially be the Fed saying, “we believe the bond market’s message,” and that the economic slowdown risk is bigger than they’ve admitted. So, I wouldn’t put money on 50 basis points in September, but the odds of multiple cuts this year are rising.
On that note, let’s go to legendary investor Louis Navellier from his September issue of Growth Investor:
[In Jackon Hole, what], really caught Wall Street’s attention was when Powell admitted, “Our policy rate is now 100 basis points closer to neutral than it was a year ago.”
In other words, not only is the Fed going to cut key interest rates by 25 basis points in September, but more are on the way…
The “dot plot” of future key interest rate cuts will be carefully scrutinized, but I think at least four key interest rate cuts are on the table.
Yesterday, Federal Reserve Governor Christopher Waller – one of the frontrunners to replace Powell as Fed Chair in 2026 – echoed Louis’ call for multiple rate cuts:
When the labor market turns bad, it turns bad fast…
So, for me, I think we need to start cutting rates at the next meeting…
I would say over the next three or six months, we could see multiple cuts coming in.
Whether it’s like every other meeting, every meeting, we’ll have to wait and see [what] the data says.
Given this backdrop, what’s the path for stocks?
Let’s circle back to Luke:
Eventually, tariffs, reinflation, and political instability will weigh enough to flip the narrative from AI Boom to AI Bust. But we’re not there yet…
That’s a 2026–27 problem, not a September 2025 problem. Which is why we continue to view pullbacks like today’s as buying opportunities.
The trade is simple: buy all dips while the AI Boom remains intact.
Even better, the technical triggers that Luke has been watching for a short-term entry point just triggered.
From Luke on Tuesday:
The S&P 500 topped out in July and bottomed out in August right around 6,380. The Nasdaq topped out in July and bottomed out in August right around 21,100.
Both the S&P 500 and Nasdaq are hovering around those levels today.
If they bounce here, that’s a green light to buy. If not, we’re probably heading for the 50-day moving averages, which would mean another 1–2% downside.
Since then, both the S&P 500 and Nasdaq have, indeed, bounced. As I write Thursday, the S&P trades at 6,459 (above 6,380) and the Nasdaq is at 21,526 (above 21,100).
So, we can put Luke in the “bullish” camp.
And Louis?
Here’s his market forecast:
We’re in an incredible environment for stock market appreciation.
The analyst community expects earnings momentum to remain robust for the foreseeable future, with the S&P 500 expected to achieve 7.2% average earnings growth in the third quarter and 7% average earnings growth in the fourth quarter.
Full-year earnings are forecast to grow by an average of 10.3%…
Another checkmark by “bullish.”
Obviously, we should be ready for historical September volatility to throw us a curveball, but the broader year-end outlook appears solid.
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In 2016, some of the world’s best money managers and stock pickers – including Leon Cooperman, David Einhorn, Bill Ackman – participated in an annual investing contest. Eric beat them all, winning the contest with a one-year gain of 150%…
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All eyes on tomorrow’s jobs report – we’ll circle back.
Have a good evening,
Jeff Remsburg
