Stocks closed sharply lower on Friday, and for the week.

Friday's lower-than-expected Employment Situation report sank stocks.

The consensus called for 110,000 new jobs to have been created (100,000 in the private sector and 10,000 in the public sector). Instead, we got 73,000 (83,000 in the private sector and -10,000 in the public). The unemployment rate ticked up to 4.2%, as expected, up from last month's 4.1%.

The biggest job gains came from Health Care with 55,000 new hires, and Social Assistance jobs with 18,000.

The shocker, really, were the downward revisions to the last two months. May was revised down by -125,000 (from 144K to 19K), and June was revised lower by -133,000 (from 147K to 14K).

Technically, July's numbers were a marked improvement from last month. Especially considering June's reported 73,000 private sector jobs were reduced to just 3,000. So July's 83,000 private sector jobs was a notable gain vs. June.

The good news, if one were looking for it, is that the downward revisions are the past. (Much like Q1's GDP of -0.5% is the past, while Q2 was 3.0%.)

We'll have to see if that jobs improvement can extend to next month.

Friday was August 1^st, the deadline for a trade deal or higher tariffs. The U.S. signed a deal the other week with the E.U. (our largest partner), and Japan (our fifth largest partner). There's a working agreement with China (fourth largest partner). There's an August 12^th deadline on them. But it looks like negotiations are progressing well and Treasury Secretary Scott Bessent has hinted at an extension. President Trump gave Mexico (our second largest partner) a 90-day extension just last week. Those 4 countries alone make up over 50% of U.S. imports.

Canada (our third largest partner) will likely be hit with higher tariffs as no deal has been solidified as of yet. They account for roughly 12% of U.S. imports.

Combined, our top 5 trading partners make up about 62% of U.S. imports.

There have been other deals with the U.K., South Korea, Indonesia, Vietnam, and more.

Excluding Canada, all of the aforementioned countries (who we have deals with) represent nearly 65% of U.S. imports. With Canada, that number climbs to nearly 77%.

We got some big earnings last week. And most came in better than expected.

More are on the way this week with as many as 1,761 companies on deck to report, including marquee names like Palantir (today), Advanced Micro Devices (tomorrow), Uber, AppLovin and Disney on Wednesday, and Eli Lilly and Constellation Energy on Thursday, to name some.

We'll see if the market can stabilize after Friday's selloff. Or if there's more downside to come.

The market is due for some profit taking given its sharp rally over the last several months. And August is typically one of the worst months for stocks. September isn't so great either.

But this has been far from a typical year. And the AI boom isn't going anywhere either. So we shall see.

Q4, however, is considered the best 3-month stretch. So there's plenty to look forward to.

And I still contend we'll see a 20% gain in the S&P this year. And given it's 'only' up 6.06% YTD so far, it looks like there's potentially a lot more upside to go.

See you tomorrow,