The Nasdaq and the S&P 500 closed higher yesterday, thanks in part to Alphabet's 9.14% gain (and hitting a new all-time high in the process), and Apple's 3.81% gain.

Google was lifted after it was reported on Tuesday afternoon that they would avoid the most severe penalties for being found guilty in last year's antitrust case related to their monopoly in search and advertising. The DOJ had recommended that they divest their Chrome browser, and their Android operating system. Instead, it will be barred from executing exclusive contracts to use their browser, but does not restrict them from making payments to become the default search provider.

Apple was lifted as well as they are reportedly paid $20 billion a year from Google to be Safari's default search provider on the iPhone.

In other news yesterday, MBA Mortgage Applications were down -1.2% w/w with purchases down -3.1%, while refi's were up 0.9%.

Factory Orders came in at -1.3% m/m vs. last month's -4.8% and views for -1.4%.

The Beige Book report showed "little or no change" in economic activity compared to the prior month's report.

And the Job Openings and Labor Turnover Survey report (or JOLTS for short) came in at 7.181 million job openings vs. last month's 7.357M and views for the same.

But the real jobs report everybody is waiting for is Friday's Employment Situation report by the Bureau of Labor Statistics (BLS).

After Fed Chair Jerome Powell?s Jackson Hole speech the other week, where he said it might be warranted to cut rates at the September meeting, citing increased risks to the labor market vs. inflation, the importance of the jobs report has grown even larger.

Make no mistake, inflation is still too high. But the Fed acknowledges that the "base case" remains that the recent price increases (which are showing up in moderate rises in inflation) will be a "one-time" shift due to tariffs, rather than ongoing increases marked by persistent inflation.

But a rate cut later this month (September 16-17), is not a done deal. Although, the likelihood of a 25 basis point cut, according to the CME's FedWatch tool, stands at 95.5%. Nonetheless, the Fed maintains it will remain data dependent.

But short of a gangbusters employment report, it looks like a rate cut is coming in two weeks. But will it really be just 25 basis points? Or will it be 50 basis points, which is how they kicked off their rate-cutting cycle in September 2024? Moreover, will this be the beginning of a rate-cutting cycle, or a one-and-done cut followed by another lengthy pause? All eyes will be on Friday's jobs report.

In the meantime, we've got a busy day of economic reports today with Weekly Jobless Claims, the Challenger Job-Cut report, the ADP Employment report, the Productivity and Costs report, the PMI Composite report, and the ISM Services Index. We'll also hear from Fed policymakers John Williams and Austan Goolsbee as they speak at their respective engagements.

Should be a busy day.

See you tomorrow,