The show spotlights concerns about economic health as recession fears grow following a weaker-than-expected July jobs report. Yahoo Finance senior columnistWe're joined by Jared Bl to get you up to speed on the action from today's session.As we mentioned, a little bit off the lows of the session, but still a drop more than 1.5% for the dow down 613 points, the S and P 500 down 1.8%.
So that's one of the changes Julia was mentioning uh the Russell 2000 in weeks pass was the benefit of that rotation.All right, Jared for more on a rough day and chaotic week for or against joining us.Always good to have you on the show.In fact, you said uh to your clients, uh Mike a recession may already be underway.
And so it's not uncommon to still see positive job and GDP growth in the early innings of recession many times that can be revised away.You know, the September Fed meeting is still a ways away, more than a month away. So we have seen really depressed confidence levels, especially consumer expectations about the future.
Uh So, you know, pretty unusual to, to, to get through a period like that with a soft landing that persists.You know, we've been calling it a late cycle environment with elevated recession risks and, you know, perhaps um some just popped the champagne cork a little too early on the soft landing because we've seen other cycles where it looks like, OK, growth is just accelerated.
And then the question is, you know, is that even going to be enough and, and I'll give you one example of that, if you look at the five year inflation expectations in the bond market dropped almost 70 basis points since mid April. Unfortunately, the market cap just isn't big enough to really buoy the broad indices like the S and P 500.
But because of its already low share price compared to other dow components, the decline did not have a major impact on the blue chips a mere 37 points. Uh you know, there is a decision to be made and because it has by far the lowest stock price in the dow, it would seemingly be the stock that makes the most sense to get rid of.And arguably better barometers of the semiconductor sector that they could put in instead to replace Intel.I think if they wanted to do like a one for one switch and replace like with like so if you do that, NVIDIA is obviously the number one contender, a company that has about a $2.
Yeah, I do agree that at the end of the day, the Dow probably gets more attention than it deserves because it's historic, it's been around a lot longer.I mean, it's the one that trades 30,000, 40,000 hitting those milestones that are much higher than the S and P 500 the NASDAQ. I mean, so I know well known, well respected economist and she was saying the increase in the unemployment rate, the softening of la labor market.Josh, I mean, she, she, uh uh you know, our, our host this morning asked her, are we in a recession?Uh It's just that the economy is now going, it's not going in a good direction.
Um They do seem to have new concerns about this economy, Nancy, I think a lot of people thought we were for sure, just cooling here, but now maybe some, some concerns.Well, again, as, as your previous guest just said, the market does an excellent job of predicting recessions that don't occur.We do see the economy slowing and certainly there are a lot of indicators that show that it's slowing.
Um, and Nancy, um, I know that you look at small caps in particular and there has been a little bit of rotation in small caps recently, but of course, they fell more today than the broader market. Um So the cyclically unprofitable companies could be um either growth cyclicals or industrial cyclicals that are coming out of a challenging environment, but where their business is in proving and they're back on a path to improve profitability and better balance sheets.
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