Situation Awareness: Cautious. The tape closed a volatile week essentially flat, but the character has shifted decisively hawkish after Friday’s blowout jobs report — the market is now pricing a Fed rate hike, not a cut, into the September 15-16 FOMC. U.S. equity index levels (SPY/QQQ/IWM) are unavailable in today’s data, so lean on breadth and rates for positioning. With markets shuttered for Labor Day, this is a week-ahead briefing: the entire tape hinges on August CPI (Sept 11) as the deciding vote for the FOMC. Trade mode: selective and watchful — resist chasing until CPI clears the runway. Regime context — 49.91% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 206 bulls vs. 104 bears. The 5-day trend turned up modestly, with breadth improving two straight sessions (40 SMA +1.0pp, 20 SMA +4.0pp), signaling early stabilization beneath a capped index.
SIP: BBCP CURV TYRA ASAN
- What’s working: Continuation/2LYNCH is the only engine firing — 11 signals, clustered hard in memory/semis (SNDK +11.9%, MU +6.1%, COHR +6.6%, WDC +5.9%). Reversal scan thin at 1 (OXY). Delayed 9M dry.
- Leading sectors: market closed — no live sector/theme data. Signal clustering points to COMPUTER (memory/storage) as the clear leadership pocket; ELECTRNCS and MACHINE secondary.
- Key event: August payrolls shocked at +162K vs. 45K consensus with upward revisions — September hike odds jumped to ~58-60% from 49%.
- Market read: Friday’s rebound stalled as yields backed up; the underlying tape is two-speed — semis strong, software and rate-sensitives punished.
- DEP watchlist: No D9M signals today — defer to continuation names below.
- SIPS: SNDK, MU, WDC — memory-cycle continuation leaders with the strongest RVOL/momentum profile.
Today’s Market Narrative
Markets are dark for Labor Day, so the read that matters is the setup coming out of Friday’s session — and it’s a hawkish one. The August Employment Report detonated the “Fed on hold” narrative that had been building all week. Nonfarm payrolls printed +162,000 against a Briefing.com consensus of just 45K, July was revised up to +21K from -23K, and June lifted to +31K. The unemployment rate held at 4.1% (below the 4.2% expected), the workweek ticked up to 34.4 hours, and average hourly earnings rose 0.3%. The knee-jerk was textbook: good news for the economy, bad news for a market now confronting the real prospect of a rate hike.
The week itself was a study in volatility with no net progress. The S&P 500 eked out +0.1%, the Nasdaq Composite +0.4%, the DJIA slipped 0.3%, and both the Russell 2000 (+0.1%) and S&P MidCap 400 (+0.2%) hugged their flatlines. Two forces dominated: oil and rates. WTI crude surged roughly 10% earlier in the week on renewed U.S.-Iran hostilities and Strait of Hormuz fears, pushing above $90 and driving energy to a sector-leading +2.3%. Stocks then clawed back midweek as oil and yields stabilized and Fed Governor Waller’s dovish tone eased hike fears — before Friday’s jobs data slammed the door on that relief.
Beneath the surface, the split is stark. The PHLX Semiconductor Index gained 2.3% on the week, with NVIDIA, Dell and the AI complex carrying leadership. Software went the other way hard — the iShares Expanded Tech-Software ETF fell 4.5% on a string of ugly post-earnings reactions. Consumer discretionary (-2.1%), materials (-1.6%), real estate (-1.3%) and industrials (-1.1%) all bled, reflecting the rate-sensitivity pressure. That divergence is your map for the week: money is hiding in the AI/memory cycle and fleeing anything that hurts when the discount rate rises.
The takeaway for the holiday-shortened week ahead: this is not a market to chase in either direction until August CPI lands Thursday. Breadth is stabilizing (49.91% above the 40-day SMA, up from 48.94%), but that’s mid-range neutral, not a green light.
Macro & Policy
The story is Kevin Warsh’s Fed, and it’s a genuinely unusual one — the debate is whether the FOMC hikes on Sept 15-16, not whether it cuts. The CME FedWatch Tool now shows a 58.4% probability of a 25-bp hike to 3.75-4.00%, up sharply from 49.4% a day earlier, catalyzed by the payrolls beat. The target range has sat at 3.50-3.75% since December 2025, and Warsh has repeatedly hung “65 months of sustained, elevated inflation” on the Fed‘s prior leadership — a tacit shot at Powell, who still holds a vote. Three officials (Hammack, Kashkari, Logan) already dissented in favor of a hike last meeting; the question is whether four more join to form a majority. Waller signaled he could vote to hike absent clear disinflation in the August data.
That makes August CPI on September 11 the whole ballgame (consensus 0.4%). Warsh has told the market to think for itself — and if CPI pushes hike odds decisively above 60%, the burden shifts to the Fed to explain standing pat. Holding back would risk Warsh’s own credibility given his inflation rhetoric. Bottom line: policy risk is skewed hawkish into an event-heavy week.
Treasuries sold off Friday on the report. The 10-year yield ran to 4.80% before hitting resistance, closing the week up 6 bps at 4.78%. The 2-year jumped to 4.38% (+5 bps on the day), and the 2s10s steepened to 40 bps. The Dollar Index firmed 0.3% to 99.16. Note the soft spots that keep a hike from being a lock: the 3-month payroll average is still just 71K, wage growth cooled to 3.1% YoY from 3.2%, and long-term unemployed rose to 27.0% of the jobless. Commodities: crude eased to $90.49, gold pulled back $22 to $4,517.80, copper steady at $6.67. Watch Iran headlines — Netanyahu’s rhetoric and Hormuz risk remain a live oil-shock wildcard.
Economic Calendar Today
- U.S. markets CLOSED — Labor Day holiday. No cash equity or bond trading, no scheduled data. The quiet is a feature, not a bug: it gives desks a full day to position ahead of a loaded week.
- Thursday, Sept 11 — August CPI (consensus 0.4%; prior 0.1%): the single most important print of the month. Decides the September FOMC hike debate. A hot number likely pushes hike odds above 60% and pressures rate-sensitive equities.
- August PPI (consensus 0.4%; prior 0.0%): the pipeline read that front-runs CPI.
- FOMC decision, Sept 15-16: the destination all of the above feeds into — a live hike meeting under a new, hawkish chair.
Earnings & Corporate News
Friday’s earnings tape reinforced the semis-vs-software split. On the winners’ side, Samsara (IOT) jumped ~14% after beating on Q2 EPS and revenue with 29.9% YoY revenue growth. DocuSign (DOCU) rose after beating by $0.07 and lifting FY27 ARR growth guidance to +8.5-9.0%, with its AI-native IAM platform now at 15.1% of ARR — a rare software bright spot. United Micro (UMC) gained 3.6% on August sales up 31% YoY, feeding the chip-cycle narrative. Small-cap earnings also delivered: Concrete Pumping (BBCP) gapped ~18% on strong results, a raised outlook and a new dividend, and Torrid (CURV) popped on a big EPS beat (+229% q/q) and better guidance.
The software carnage was severe. Lululemon (LULU) — technically discretionary — cratered ~20% below $100 for the first time in years after cutting FY27 guidance a second straight quarter; comps fell 9% with Americas down 12%. In software, eGain (EGAN) -21.7%, Guidewire (GWRE) -15.2% (despite a beat), Asana (ASAN) -12%, UiPath (PATH) -8.3%, and Zscaler (ZS) -3% (which also announced a 3% workforce cut) all sold off hard, and Adobe (ADBE) -3.1% weakened on its CEO transition news.
On the analyst and deal front: PATH was downgraded to Hold at Canaccord; AMBA cut to Hold at Craig-Hallum despite a beat; Shell upgraded to Overweight at Morgan Stanley. In M&A, Flex (FLEX) is acquiring EPC Power for $4.4 bln to bolster AI data-center power — another AI-infrastructure vote. Watch the credit bureaus: FHFA’s Pulte flagged bi-merge and “SAFER/SOUNDER” solutions targeting EFX, EXPGY, TRU — and the regulatory shadow already clipped FICO -16.5%.
WaveFinder Signal Summary
The scan environment is moderate, not rich — 11 continuation/2LYNCH signals, one reversal (OXY), and no Delayed 9M. Eleven continuation names is decent breadth but not a broad-participation green light, consistent with a 49.91% above-40-SMA reading that sits squarely mid-range. The concentration tells the real story: memory and storage dominate — SNDK +11.9%, MU +6.1%, WDC +5.9%, with COHR +6.6% in optics/electronics — a clean read on where institutional money is flowing as the AI capex and memory-price cycle runs hot.
Breadth is expanding, just gradually: stocks above the 40-day SMA rose to 49.91% from 48.94%, and above the 20-day SMA jumped to 23% from 19% — two consecutive up days off the week’s chop. That’s early-stabilization behavior, but with the index capped by rate fears and CPI looming, treat the improvement as permission to build a watchlist, not to lever up.
Today’s Watchlist
- SNDK — 2LYNCH continuation leader, +11.9% at $1,740 on RVOL 1.3; memory-cycle momentum, watch for follow-through on any hold above Friday’s range.
- MU — memory continuation at $1,016.59 (+6.1%); the cleanest liquid proxy for the AI memory-price surge Warsh himself cited as inflationary.
- WDC — storage continuation at $467.46 (+5.9%); confirms the COMPUTER-sector leadership cluster, pairs with SNDK/MU as a basket.
- OXY — the lone reversal signal at $60.04; energy is the macro hedge if Iran/Hormuz headlines reignite the oil bid above $90.
- BBCP — SIP standout, +18% gap on beat/raise/new dividend; watch for a tight consolidation setup after the gap digests.
- DOCU — lone software winner; IAM at 15.1% of ARR and raised guidance make it the relative-strength name in a wrecked group.
Action Codes of the Day
- T3A (Think 3 Days Ahead) — The week is defined by August CPI (Sept 11) and the Sept 15-16 FOMC hike debate; position ahead of the catalyst, not into the print. Hike odds at 58.4% mean every setup carries event risk.
- CRT (Controlled Risk Taking) — Choppy, two-speed tape (semis +2.3% vs. software -4.5% on the week) with breadth mid-range at 49.91% above the 40-SMA demands calculated, sized risk — take the memory-cycle continuations but keep leashes tight until CPI clears.