Welcome to the Daily Contrarian, our morning evening look at events likely to move markets. It is Sunday, Aug. 3 and we are posting this unprecedented early briefing due to your host’s travel schedule.

Hot off the press: Read how the Contrarian Investment Portfolio produced a positive return for the third straight month and how (and why) it is being positioned a bit more defensively...

State of Play

Stocks dropped precipitously on Friday, capping a volatile week and starting the month off on a sudden risk-averse setting. New tariffs were to blame along with President Trump firing the Bureau of Labor Statistics commissioner, apparently for rigging non-farm payrolls.

As we eye or board of indicators for signs of direction at 2015 ET:

* Cryptos are moving higher, shrugging off reports that China is (again) banning digital currencies. Bitcoin +1%. Ethereum +3%. XRP +6%

* Stock index futures are not moving at all. S&P, Nasdaq, and Russell are all hogging the break-even point;

* Not much to report in commodities land yet either. WTI crude oil is down 0.5% to trade around $67/barrel. No movement elsewhere;

* Bonds are seeing a few bids at the short end of the curve. The 2-year yield, the most sensitive to Fed interest rates, is down 4 basis points to 3.68% (yields move inversely to prices).

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Known Events

Earnings are the main story of the week, ex-tariffs and anything else that comes out of the White House of course.

First up tomorrow morning:

* Furniture supplier Wayfair (W )

* Tyson Foods (TSN ), a substantial portfolio holding

* Semiconductor manufacturer onsemi (ON )

After the close at 1600 we will hear from:

* Palantir Technologies (PLTR )

* Hims & Hers Health (HIMS )

* MercadoLibre (MELI )

Other highlights this week include AMD (AMD ) on Tuesday, Shopify (SHOP ) on Wednesday, and D-Wave Quantum (QBTS ) on Thursday.

* We’ll also get a look into the US travel sector with Marriott (MAR ), Wynn (WYNN ), Hilton (H ), and TripAdvisor (TRIP ).

* Uber (UBER ) and Lyft (LYFT ) report Wednesday

* Fast-food chains McDonald’s (MCD ), Burger King owner QSR (QSR ) and Wendy’s (WEN ) are scattered through the week

So much for the look ahead. These events might move markets a bit but investors’ concerns now are clearly elsewhere…

The Bottom Line

We got a stark reminder last week that President Trump can still upend the prevailing mood on Wall Street. Some of the tariff announcements, like the 30% levy on Switzerland, seemed to come completely out of left field. Investors by now are used to some unpredictability from the White House when it comes to tariffs, but not when the moves are this nonsensical.

Then there was the jobs report. As discussed Friday, the headline numbers were not terrible but along with downward revisions to previous months bad enough to increase the likelihood of interest rate cuts. That “happy medium” would normally be a good thing. Except then the reaction from the White House was anything but normal.

According to the Wall Street Journal editorial board, the move to fire the BLS head means “Trump seems to understand that the jobs report signals trouble.” That may not even be true. It may be more due to Trump’s impetuous nature than real concerns about the labor market. But it doesn’t matter because the impression that Trump and the White House are suddenly concerned about the labor market — rather than crowing about its achievements — is now absolutely real. Judging by Friday’s market activity, it’s not just the WSJ editorial board drawing this conclusion.

Silver Lining?

One thing we’ve learned about Trump is he can reverse course on crazier policies as quickly as he decides on them — especially if the market sends him a clear signal that it doesn’t like the policy. According to that pattern, we may be a day or two (tops) away from saner messaging from the White House.

The fact that previous months of non-farm data was revised lower (and that quite dramatically) does speak to a slowing labor market. This has yet to affect jobless claims however as these have actually been dropping in recent weeks. Job openings are mostly holding up, according to the latest JOLTS report.

Retail sales data continues to show growth despite higher prices. And let’s not forget that earnings have been pretty stellar across the board — including cruise line companies that capture discretionary spending by middle class consumers. None of the ‘big three’ public cruise lines — RCL , CCL , NCLH — lowered guidance in their latest quarterly earnings.

In Conclusion

There are indications that hiring is slowing, but there is also data to support continued growth in the labor market, Importantly, there is little indication that layoffs are increasing.

Countering that is strong retail data and healthy outlook for discretionary spending, judging by what the cruise lines have been telling us at least.

Finally, perhaps as a tie-breaker, we point you to the M&A market. Corporate dealmaking is suddenly quite hot. That actually says a lot about two very important risk metrics: corporate risk appetite and capital markets. The first speaks to the underlying demand for expansion and investment. The second to the financing that makes the whole thing possible. When both are healthy, as they are now, it is hard to see how public equity markets will remain down for very long. That, at least has been the pattern.

It’s true that the underlying setup for markets just doesn’t feel very good right now. But we have seen — just a few months ago — how misguided these feelings can be. That’s not to say the whole thing will turn around right away. Indeed, we may need to see a little more selling before investors pile back in for the next leg of the bull market. Ultimately, however, the long-term picture remains constructive.

Housekeeping

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