Stocks slide as Trump’s tariff threats and possible weak jobs report loom

• Stocks did a 180 – endng the day LOWER.
• Trump raises the roof again on tariffs.
• Are we starting to see cracks in the foundation?
• Oil steady, bonds steady and gold steady.
• Try the Chicken Courdon Blue.

Oh boy…..

” Where do I begin to tell the story of how great a love can be, the sweet love story that is older than the sea… where do I start?” Love Story 1971

The stock rally fizzled again — and I say again because while some indexes are hitting "new highs," it's being driven by a handful of names (yes, here we go again). Beneath the surface, many stocks aren’t making new highs at all — in fact, they’ve been consolidating.

This is all happening ahead of key events: today it's the July Non-Farm Payrolls report, ongoing tech earnings from the latest batch of names, and of course, the newest headlines around Trump’s tariff push.

But let’s be honest — it’s also about how algos, traders, and some investors keep piling into certain stocks, pushing them to valuations that are not just priced to perfection, but in many cases, beyond perfection. Dare I say... irrational?

Here’s what I mean:

Stocks can be underpriced, with room to grow.

They can be priced to perfection — meaning valuations already assume everything goes right: strong earnings, no Fed surprises, steady growth, no geopolitical shocks. No room for error.

And then there's beyond perfection — where expectations aren't just high, they're euphoric. Investors are betting not only that everything will go right, but that it will exceed even the most optimistic projections.

That’s a high bar… and a fragile one.

Now, this isn’t a new theory at all, and investors should not be surprised – how long have I been saying that it’s over done? In fact, yesterday morning again – I ended my note with this:

“I am in a holding pattern – not adding to the runaway names (as I already own them) but am always looking for opportunities in names that are on sale. For now – my investment dollars are sitting in the gov’t mm fund earning 4.25% (it only represents 3% of the total portfolio – so I am invested) - Let’s see what happens next. Remember – I am thinking that a 4 – 5% pullback is not out of the question….the RSI on the S&P is now at 69.9763 – if we see it rally today – the RSI will pierce 70 again…and that just suggests more caution ahead….The Nasdaq remains just north of 70 and will clearly go deeper into overbot territory. Again, I would not chase, you are invested so you are participating…. remember – this is a long game, you make money when you BUY at the right price not when you SELL! Capisce?”

Ok – so all that excitement in the morning about META (+11%) and MSFT (+4%) failed to push the broader market higher….and by the end of the day – the Dow lost 330 pr or 0.75%, the S&P lost 23 pts or 0.4%, the Nasdaq down only 8 pts (0.05%) thank you META & MSFT, the Russell lost 20 pts or 0.9%, the Transports down 64 pts or 0.4%, the Equal Weighted S&P lost 71 pts or 1% while the Mag 7 rose 412 pts or 1.4%.

Now be careful… of the seven names in that index, only three actually advanced. META alone added 399 points, MSFT added 145, and AMZN chipped 63. But the rest? TSLA took out 105 points, GOOG dropped 90, NVDA shed 34, and AAPL gave back 25.

So, while the index appeared to surge, the reality is that just two names did the heavy lifting — META and MSFT. That’s not broad-based strength. That’s narrow leadership. And to me, that signals underlying weakness, not strength.

You can see it in the market breadth — advance-decline lines are diverging from the indexes, and fewer stocks are trading above their 50- and 200-day moving averages. In fact 150 stocks on the Nasdaq are making new LOWS. Momentum indicators like RSI are flashing overbought - what have I been saying?) while participation across sectors continues to fade. The equal-weight S&P isn’t confirming the move in the cap-weighted version (we discuss that at the beginning of the week) — and that’s a red flag.

When a market is this top-heavy, it doesn’t take much to tip it. One or two disappointments from the "Grand Marshalls” and the whole parade falls down. So, while headlines tout “record highs,” you need to pull back the sheets to see what’s going on! And there is A LOT going on!

Now remember the VIX? Remember how I warned you it was trading at levels that suggested nothing could go wrong? A level that screamed complacency — when assets are priced to perfection or even beyond? All it would take was one negative headline to flip the switch, send stocks lower, and send the VIX surging.

Well — here we are. In just the last two days, the VIX is up 22%, and the big names — the ones holding up the market—have finally started to pull back.

The broader market? That’s been churning for a while now, it’s just been masked by a small handful of high-flyers. This is what happens when the market is priced for perfection — there’s no margin for error. One crack, and suddenly everyone’s scrambling for the exit.

So for example - last night AMZN disappointed in their guidance – the stock is down 7.6% and if that holds – AMZN will go negative ytd, COIN missed on earnings and this morning it is down 11%, (it is up 52% ytd), MSTR beat on earnings but the stock is down 4% in the pre-mkt (it is up 38% ytd). If you look at some of the other sexy names – you see weakness…. PLTR is down 2.5% in the pre-mkt, NVDA – 2.3% in the pre-mkt…. GOOG – 2%, TSLA down 1%, AMD is down 3.25%.....(but it is up 45% ytd) …So all I am saying is go slow…. a price correction is coming.

Now take a look at AAPL….it is down 17% ytd – in contrast to its peers….last night they gave a robust report and offered upbeat guidance and the stock is up 2% this morning…it should be up more…..but the overall tone is negative, so today’s action will be muted…..But in my mind – this is an opportunity to add to AAPL – it’s on SALE! They made $94 billion in 3 months up 10% y/y. double digit growth in iPhones, Macs and Services around the world!

And then we have the latest drama surrounding tariffs – yesterday Trump announced a new round of sweeping tariffs and all that does is raise concerns about economic growth – here and abroad…..Honestly – it’s nothing really new, it’s just that we are nearing the DEADLINE. It was the 1st but now it’s the 7th, or maybe the 5th…. who really knows – its ‘fluid’, a moving target!

And then we have the July NFP report…. new jobs created? The expectation is for 104k – down significantly from last month at +147k which was 4ok MORE than last months expectation…..So if today’s number is weaker than the expectation – remember – you have to average it with the trend…and the trend has been strong. Today’s number will have to come in at sub 50k jobs to disrupt the trend. Unemployment is expected to be 4.2% (in line with where it has been), Avg hourly earnings +0.3% m/m and 3.8% y/y – slightly better than last month.

Oil is off $1.50 from yesterday’s high – this morning it is trading at $69. No change in the story…. prices are elevated due to uncertainty around geo-political issues. (Think Russian sanctions)

Gold is down $3 at $3,345…. Recall on Wednesday we traded right down to the trendline, where it found support (3,340). My gut says that we are now in the $3,340/$3,415 trading range.

Bonds did nothing yesterday… The 10 yr is yielding 4.35% while the 30 yr is yielding 4.88%. – both below ‘anxiety’ producing levels.

US futures are giving it all back…. Dow futures down 440, S&P’s down 65, Nasdaq down 290 pts while the Russell is down 36!

European markets are all lower…. again, not a surprise…. France down nearly 2%. Italy and Euro Stoxx down 1.6%, Germany lower by 1.6%.

The VIX is up 11% this morning…..so that makes sense that stocks are under pressure.

The S&P closed at 6339 down 24 pts….and unlike yesterday morning – when it looked like we would blast right up and thru 6400 on the opening bell and we did – we traded as high as 6427, it appears as if we are going to blast right DOWN thru 6300 on the opening bell. Again no one should be surprised. It’s August, It’s Liberation Day #2, and it’s about Trump once again blasting and threatening JJ over rates…so buckle up….

I remain in a holding pattern until I get more clarity….. –I am thinking that a 4 – 5% pullback is not out of the question…. Again, I would not chase, you are invested so you are participating…. remember – this is a long game, you make money when you BUY at the right price not when you SELL! Capisce?

Chicken Courdon Blue

This is classic and delicious.

You need – thin sliced cutlets…. (you can even pound that thinner if you need to), ham, fontina cheese, butter, Italian seasoned breadcrumbs, olive oil, eggs and flour.

Lay the cutlets flat on a cutting board. If needed, gently pound them thinner for even cooking. Season with salt and pepper.

Assemble the Filling:

On each cutlet, place one slice of ham and one slice of fontina cheese. Fold the cutlet over like a book.

Set up your assembly line. 1 plate of flour, 1 bowl with beaten eggs, 1 plate of seasoned breadcrumbs.

One by one, dredge each stuffed cutlet in flour, dip in the egg wash, then coat fully with breadcrumbs. Press gently so the crumbs stick well.

In a large sauté pan, heat ½ stick of butter and a generous drizzle of olive oil over medium heat. When it is hot and shimmering, place the cutlets in the pan (don’t overcrowd). Fry until golden brown, about 3–4 minutes per side. Flip carefully and cook the other side.

Place on a towel-lined plate. Let rest a minute or two before serving.

These are great hot out of the pan, but also perfect to wrap up and take on the go. Just cool slightly, grab, and run. Delish!