Stock futures rallied. They do that. Usually before something happens that everyone pretends matters. This time it's the July jobs report and earnings from companies whose revenue projections were already leaked to seventeen different hedge funds last Tuesday.
The jobs report comes out Friday. Retail traders will read the headline number. They will not read the revisions from the previous two months. They will definitely not read the household survey data. They will check what futures did in the four seconds after the release and then make a decision that would've been identical if they'd just flipped a coin.
Earnings season continues. CEOs will host calls where they explain why missing revenue targets is actually bullish if you adjust for one-time charges that happen every single quarter. Analysts will ask soft questions they submitted in advance. Everyone will pretend the guidance means something despite it being revised six times before Halloween.
Stock futures don't know what's in the jobs report. They can't. The data doesn't exist yet in its final form. But they rallied anyway because someone somewhere decided to buy ES contracts at 6:47 PM on a Sunday and seventeen algos followed along like ducklings.
None of this is predictive. The jobs report could show the economy added three million jobs or lost two million. Futures would've rallied either way because they rallied before anyone knew anything. That's not analysis. That's a Ouija board with a Bloomberg Terminal.
Come Friday, the number will print. Traders will react. By Monday they'll have forgotten it entirely and rallied on some other report they also haven't read. The circle of financial life continues, powered entirely by people who think the news matters right up until the next news.
Photo by Anne Nygård on Unsplash
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