The big three indexes closed lower on Friday, but the small-cap Russell 2000 and mid-cap S&P 400 continued to climb, hitting new YTD highs in the process.

But almost all of the major indexes (sans the Dow) were higher for the week.

Friday's Employment Situation report by the Bureau of Labor Statistics (BLS) came in weaker than expected at 22,000 new jobs last month (38,000 in the private sector and -10,000 in the public sector) vs. the consensus for 77,000 (75,000 private and 2,000 public). The unemployment rate ticked up to 4.3% as expected, up from last month's report of 4.2%. Average hourly earnings on a y/y rate eased a bit to 3.7% on a y/y basis vs. last month's 3.9% pace.

Adjustments from previous months were mixed with June revised down by -27,000 to -13K (originally 14K), while July was revised upward by 6,000 to 79K (originally 73K).

Stocks immediately cheered the weaker-than-expected news, as it helped solidify a rate cut at the September 17^th FOMC Announcement. Although, most of the gains gave way as the day went on. Nevertheless, the weaker-than-expected jobs report was viewed as a positive since it is likely to finally prod the Fed to resume their rate-cutting cycle, which in turn could help buttress future employment.

There has been plenty of skepticism over the reported job gains over the previous 12-24 months. Last year, the BLS released the largest revision to the previous period's employment numbers (April 2023 to March 2024), in 15 years, slashing -818,000 job gains from the records, or a reduction of job gains of roughly -68,166 jobs per month.

On Tuesday, 9/9, the BLS will release their preliminary estimates for the latest period (April 2024 to March 2025). The estimates range from another downward revision of between -470K to -740K, further underscoring the weaker labor market many analysts had suspected all along.

If true, that should also fortify the Fed's lean toward cutting rates next week. And could further increase the Fed's rate-cutting expectations from just 2 rate cuts this year (presumably by 25 basis points each), to 3 rate cuts by year's end (a rate cut at each of the next 3 meetings in September, October and December).

In addition to Tuesday's employment revisions, we'll also get another look at inflation on Wednesday, 9/10, with the Producer Price Index (PPI ? wholesale inflation), and Thursday, 9/11, with the Consumer Price Index (CPI ? retail inflation).

This will be the last look at inflation the Fed will get before their 2-day FOMC meeting on September 16-17. The next Personal Consumption Expenditures (PCE) index, (the Fed?s preferred inflation gauge) doesn't come out until a week later on 9/26.

In other news on Friday, we heard after the close that AppLovin and Robinhood will be added to the S&P 500 on Monday, 9/22. To make room, Caesars Entertainment and MarketAxess will be removed.

Stocks are currently sitting at or near all-time highs or YTD highs.

Even though September is considered one of the worst months for stocks (particularly the latter half), I'm expecting more gains by year's end and another 20%+ gain for the S&P this year, mirroring the 5 years of 20%+ gains we saw in 1995-1999 during the dot com tech boom back then. I'm expecting the current AI-driven tech boom to produce 5 years (or more) of 20%+ gains as well, with this year expecting to be the third year in a row of 20%+ gains.

See you tomorrow,