Technical analysis: US jobs data flips 28 weekly signals to sell, Volkswagen stock jumps on restructuring plan

The US employment report caught the consensus badly wrong: 162,000 new jobs against 53,000 expected, unemployment steady at 4.1%, average hourly earnings up 3.1% year on year. In a market that had spent months betting on easing, a number that strong produced the opposite of what instinct suggests: the odds of a rate hike on 16 September climbed back towards 58% from 49% the day before, and the US ten-year yield moved close to 4.8%.

Across our universe the reaction reads better in the signals than in the indices. SPY lost 0.39% with buy-side volume at 30.75%, less than a third of the tape; QQQ held a 0.18% gain because technology makes up half of that basket and rose 0.70%, while financials, worth 0.24% there against 12.59% on the S&P 500, gave up 0.79%. The small-cap basket, IWM, gained 0.28% on the day yet turned to sell on the weekly close.

The most interesting split of the day was not between sectors but inside one. Memory and semiconductors ran hard: Sandisk up 11.90%, Astera Labs up 9.75%, Nebius up 7.48%, IREN up 7.27%, Marvell up 7.05%, Micron up 6.10%, Western Digital up 5.86%, CoreWeave up 5.68%, AMD up 4.69%, Super Micro up 4.54% and Intel up 4.51%.

In the same sector, software fell: Autodesk down 8.26%, Adobe down 6.73%, Dassault Systèmes down 6.49% and Netflix down 5.35%. Four of those rank among the six widest moves in our whole universe relative to each name's typical swing, and all four are declines. The explanation is the same one driving yields: long-duration software valuations pay first when the cost of money rises, while the memory cycle runs on an engine of its own that has nothing to do with the central bank.

Tesla lost 5.92%, the widest move among the mega caps, on two things at once: the Austin Cybercab event held behind closed doors, with no livestream and no appearance by the founder, and a probe opened by the US road safety regulator into how the vehicle was self-certified and why the company considers the ordinary safety standards inapplicable. Apple gave up 2.51%, weighed down by reports of production problems and by the leadership transition, on the eve of its 9 September event.

Against the grain, Nvidia added 0.84% on the back of its 12.93 billion dollar acquisition of Hugging Face, and Nvidia stocks were among the few large caps to close green. Palantir stock, by contrast, closed down 4.49% even after announcing an expanded strategic alliance with PwC US: the rally on that news had come the previous day, and Friday handed most of it back. Alphabet fell 1.17% and ServiceNow 2.97%.

Milan lost 0.24% on a day of rising yields, which for a bank-heavy market is the worst possible backdrop. The heaviest drag came from Eni stock at minus 3.29%, a move that sits oddly against elevated crude and points to something specific to the name rather than macro. Behind it, DiaSorin fell 1.82%, Brunello Cucinelli 1.70%, MFE 1.43%, Ferrari stock 1.26% and Saipem 1.25%.

Banks gave ground in an orderly but broad way: Banco BPM stock down 1.20%, UniCredit stocks down 1.15%, Intesa Sanpaolo essentially flat at minus 0.03%. That is worth noting, because on the same day the European banking sector closed up 0.30%: the Italian names underperformed their own continental sector. At the top of the board, Prysmian stock rose 2.05%, STM stock 1.85% in the wake of European technology, Stellantis stock 1.80% with continental carmakers, and the utility block held up with A2A up 1.72%, Hera up 1.58% and Snam up 1.07%.

The continent's protagonist was Volkswagen, up 6.47% after the board approved the largest restructuring plan in eighty-nine years, the sharpest single-day move Volkswagen stocks have posted this year. It is the widest move of the European session and one of the six outsized moves across our whole universe. Alongside it came the other two German names joining our cohort today: BMW up 1.68% and RWE up 0.72%.

At the bottom of the German board, Rheinmetall fell 3.38% and Deutsche Telekom 1.22%. In France Dassault Systèmes lost 6.49% in the broad software slide and EssilorLuxottica 2.06%. In the United Kingdom Prudential fell 1.54%. Broadly flat were SAP at plus 0.05%, Deutsche Bank at plus 0.06%, Siemens at plus 0.76% and Siemens Energy at plus 0.77%.

The oddest feature of the weekly close is not in New York: thirteen of the twenty-one new buy signals are Brazilian. Six are financials — Banco do Brasil, Bradesco, Itaú, Itausá, Bradespar, BB Seguridade — three are steel and mining through Usiminas, CSN and Vale, two are utilities with CPFL and Cemig, and EcoRodovias and Hypera complete the picture.

Friday's moves themselves were contained — EcoRodovias up 3.66%, Ultrapar up 2.66%, Hypera up 1.89%, Itausá up 1.53% — but the weekly picture describes a defensive rotation after eleven straight sessions of gains on the local index: flows shifted out of the commodity heavyweights and into banks and utilities.

The four exchanges finished the week almost still: DAX up 0.13%, FTSE 100 down 0.06%, CAC 40 down 0.08%, FTSE MIB down 0.24%. Our signals, however, separate them sharply.

Three are on the buy side and one on the sell side. Milan has been a buy since 7 April, now in its twenty-third week, and the trade is worth 12.20%, comfortably the best of the four; London since 7 April at 2.18%; Frankfurt since 13 April at 5.10%. Paris is the only sell, dating from 24 August, now in its second week. Measured from their own records, Frankfurt is 2.13% away, Milan 3.79%, Paris 5.66% and London 8.18%.

XLK — the Technology Select Sector SPDR, the US technology ETF — closed up 0.70% and was the best American sector of the session, the only one above half a point. XLF — the Financial Select Sector SPDR, the US financials ETF — lost 0.79% as yields rose, and XLY — the consumer discretionary ETF — 1.33%, the worst of the eleven.

In Europe, EXV3 — the iShares European technology ETF — gained 1.38% and EXHG — the European auto ETF — 1.11%: these were the two sectors that led the continent, and both are on the buy side on our weekly horizon. GLD — SPDR Gold Shares, the most heavily traded gold ETF in the world — slipped 0.84% as yields climbed, though it remains up 2% over the month. XLE, the US energy ETF, lost 0.87% and still stands as the best sector of the month at plus 11.78%.

The cohort was born on Friday 4 September's close: 21 new buy signals, 14 of them tradable. Since it is brand new we publish it in full; from tomorrow we will report only what changes. No new sell signals appear in this card: the week's twenty-eight reversals concern names already under coverage, and you will find them in the theme cards.

Setup quality is medium across all fourteen and the suggested opening is cautious on each: none of these signals deserves a full position on day one. The caveat always applies and we repeat it: past data does not guarantee future results.

Four companies in our universe report over the next seven days, and two of them arrive in opposite conditions.

Tuesday 8 September

GameStop Short

Thursday 10 September

Adobe Long

Oracle Long

Avio Short

SPY, the S&P 500 ETF, closed down 0.39% and QQQ, the Nasdaq 100 ETF, up 0.18%: a second consecutive session in which the Nasdaq beats the broad basket. The reason lies in composition and is easy to read: technology is 50.54% of QQQ against 32.91% of SPY and rose 0.70% on Friday; financials are 0.24% against 12.59% and fell 0.79%.

Both baskets sit inside their own congestion zone, resting on the floor. The geometry, though, is very different. SPY is in its twenty-third week of a buy signal worth 13.35%, with all three profit-taking windows banked, and stands just 1.19% from its record; QQQ is in its fifth week, still 1.66% below its entry level, and sits 4.13% from its own record.