CNBC Daily Open: Financial markets aren’t the economy

Moderating jobs growth
U.S. nonfarm payrolls grew by 187,000 successful July. That's little than the Dow Jones estimation of 200,000 but is somewhat much than June's downwardly revised jobs maturation of 185,000. Unemployment dipped 10 ground points to 3.5%, the lowest level since precocious 1969. All successful all, it was a beauteous bully study for some workers and the Federal Reserve.

Bad week for U.S. stocks
Major U.S. indexes ended Friday successful the red, giving the S&P 500 and Nasdaq Composite their worst week since March. The representation was antithetic crossed the Atlantic. The pan-European Stoxx 600 inched up 0.3%, with astir bourses and sectors successful affirmative territory. Stock movements of note: Rolls-Royce popped 5.7%, Credit Agricole jumped 6.31% but Maersk mislaid 4.88%.

What recession?
JPMorgan Chase nary longer thinks the U.S. system volition gaffe into a recession this year. Michael Feroli, the bank's main economist, told clients JPMorgan expects the system to grow astir 2.5% successful the 3rd quarter, compared with the bank's erstwhile forecast of 0.5%. "Given this growth, we uncertainty the system volition … gaffe into a mild contraction arsenic aboriginal arsenic adjacent quarter," wrote Feroli.

Apple's large one-day drop
Amazon shares surged 8.27% aft the institution reported blowout earnings — and its biggest nett bushed since 2020 — for its 2nd quarter. On the flipside, Apple shares slumped 4.8% connected quality that the Cupertino-based institution mightiness spot another diminution successful revenue for the September quarter, its 4th successful a row. Friday saw the biggest driblet successful Apple's shares since Sept. 29 past year.

[PRO] Eyes connected inflation
Inflation information dominates the economical docket this week. The July user terms scale comes retired Thursday and the shaper terms scale the adjacent day. CNBC Pro's Sarah Min explains however the Federal Reserve mightiness react, depending connected what the terms numbers look like.

The U.S. economy's had an unbroken drawstring of victories.

Job maturation successful July was little than expected, which is what the Federal Reserve wants to spot to get ostentation down. But it wasn't truthful debased that it'd spell occupation for workers oregon the economy.

"Overall, this is inactive not the representation of the labour marketplace we would expect to spot if the system were successful information of decelerating dramatically successful the abbreviated term, though without question determination are signs of moderation," said Rick Rieder, main concern serviceman of planetary fixed income astatine plus absorption elephantine BlackRock.

Indeed, the U.S. system looks truthful steadfast — a slowing but beardown labour market, little inflation readings and stronger-than-expected growth — that Wall Street's changing its caput astir recession. JPMorgan's the latest slope to wantonness its recession forecast. The country's biggest slope follows Bank of America, which called for a "soft landing, nary recession," and Goldman Sachs, which lowered its probability of a recession from 25% to 20%.

Yet markets slumped Friday. The S&P 500 fell 0.53% and the Nasdaq Composite slipped 0.35%. That's the 4th consecutive nonaccomplishment for some indexes. The Dow Jones Industrial Average dipped 0.36%. Moreover, each indexes ended the week successful the red. The S&P and Nasdaq slid astir 2.3% and 2.9% respectively, their worst week since March. The Dow retreated 1.1%.

The disparity betwixt the bully economical quality and the atrocious week successful markets reminds america that, arsenic overmuch arsenic there's a adjacent narration betwixt the two, they aren't the same.

Economic information measures and reports what has already happened. Whereas markets are alive, fueled by feelings and comprise bets connected the future. What does this archer us? That traders aren't definite if the S&P tin proceed rallying — adjacent if ostentation information coming retired this week is softer than expected. As Steve Sosnick, main strategist astatine Interactive Brokers, enactment it, "The hazard mentality is changing a bit."