Financial Focus
August 7, 2026 

 
     GOOD MORNING!     Three factors combined to lift Treasury yields and weigh on stocks.  One, the Financial Times reported that Fed Chairman Kevin Warsh is willing to raise rates at the September FOMC meeting if inflation firms and market expectations shift further towards tightening in coming months.  Two, the price of oil gained as the markets waited to get details of a deal between Iran and Oman on the Strait of Hormuz.  And, a heavy corporate new issue calendar that included a massive ($25 billion) offering by Alphabet may pushed up Treasury yields as underwriters hedged against the offering and some funds may have been selling Treasuries to purchase the higher yielding bonds.  Higher oil and market rates plus a potential rate hike caused stocks to turn cautious.   
     

     The consensus forecast in this morning’s July employment report is for non-farm payrolls to increase by 80k and the unemployment rate to hold steady at 4.2%.  If the actual print comes close to the estimates, the markets’ reaction will likely be mute and then start to focus on next week’s inflation and retail sales reports, barring the unexpected happening in the Middle East saga.  Leading labor market-related data have been mixed, suggesting this morning’s report could be either stronger or weaker.  If stronger, the markets will add to bets of a rate hike at the September meeting.  If weaker, traders are likely either shave those bets or hang tight until CPI is released next Wednesday.  Early trading has a risk-on sentiment with Treasury yields leaning lower and stock index futures leaning positive.    HAVE A GREAT WEEKEND!