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⚡TODAY IN 10 SECONDS
Markets are shut today, but Friday left plenty to trade: August payrolls printed 162,000 vs. 53,000 expected, rate-hike odds jumped to 58% on FedWatch, and the S&P fell 0.41% to 7,718.60, with eight of eleven sectors red.
Memory ignored all of it, with Micron closing above $1,000 for the first time and SMH up 2.61%, so this week's idea is Applied Materials.
FOCUS OF THE DAY
Secret #8: Never Stop Studying The Market
Friday should have been simple. Payrolls ran near three times consensus, and September hike odds jumped nine points to 58%. Higher rates hurt expensive growth stocks, so growth should have led the tape down. It did not: $SMH closed up 2.61% while eight of eleven sectors fell, and Micron closed above $1,000 for the first time.
The answer was never on the chart; it was in the supply data. TrendForce tracked DRAM contract prices up 93% to 98% quarter over quarter in Q1 and 58% to 63% in Q2, Micron's best memory is allocated through year-end, and Dell has a $95 billion AI backlog. A shortage sets its own prices. The Fed gets no vote.
Find all 10 Secrets to Success at the bottom of today's issue.
📰 HEADLINES
August payrolls beat by nearly three times. The economy added 162,000 jobs against 53,000 expected, unemployment held at 4.1%, and June and July were revised up by 55,000. FedWatch hike odds rose to 58% from 49.4%, and the 2-year hit its highest since January 2025.
Memory ran straight through the macro. Micron rose 6.10% to $1,016.59, its first close above $1,000, Seagate added 6.34%, and $SMH gained 2.61% while the S&P fell 0.41%. The driver is contract pricing, not a forecast: DRAM is up 58% to 63% quarter over quarter, and Micron is sold out at the leading edge.
One regulator took a sixth of Fair Isaac. FHFA Director Bill Pulte ordered Fannie Mae and Freddie Mac to approve VantageScore 4.0 for every mortgage lender at once. $FICO fell 16.68% to $932.26: originations are over 60% of Scores’ revenue, and VantageScore advertises 99 cents a pull against FICO's $10.
🎯 IDEA OF THE DAY
Applied Materials builds the machines that make chips. Fiscal Q3 revenue rose 25% to $9.1 billion, and Q4 is guided to $10.25 billion on AI, DRAM and packaging. It closed Friday at $454.71, up 4.31%.
Why not just buy Micron? Micron closed at a record; Applied closed 37% below its June 30 high of $723. Memory makers get paid the moment DRAM prices rise. Equipment makers get paid later, when those buyers spend the windfall on capacity. Friday was the first session the tape linked them.
The trend since June is still down, and a hot core CPI hits high-multiple semis first, so the entry sits below Friday's close and may not trigger.
🔔 HEADING INTO THE OPEN
Bird's Eye: The hike got priced at the front of the curve and nowhere else. The 2-year rose to 4.37%, its highest since January 2025, while the 10-year moved a basis point to 4.78%. That is a flattening, not a bond selloff: Friday repriced Fed policy, not long-run growth. Favor cyclical earnings over long-duration multiples.
Ground Level: The losers were consumer names on a strong labor print, worth respecting. Discretionary was the worst sector at minus 1.33%, Lululemon fell 17.38% to $100.61, and Oxford Industries fell 15.72%. Jobs are being created while the companies selling to those workers cut guidance. Distrust retail strength until spending agrees.
Under The Hood: Two prints decide the week, and the second decides the Fed. PPI lands Thursday 8:30 AM ET, CPI Friday 8:30, headline expected at 3.4% year over year and core 0.2% month over month. A 0.3% or hotter core pushes hike odds past 70% and hits the semis that just ran; a 0.1% core makes the priced 58% a fade.
😂 MEME OF THE DAY
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