President Trump spoke on the phone with President Xi yesterday. Still, the evolving beef between former bros (Trump & Elon Musk) overshadowed the long-awaited conversation between the world’s two most powerful men.

Shares of Tesla (TSLA) had a sell off, and the broad market slumped into the close.  There was never a sense of panic in the market, but it felt surreal, and at the same time seemed inevitable. The two most opinionated and pugilistic men on the planet went on social media.

It was the ultimate sideshow.

Tesla’s Wheels Come Off

Ten of eleven sectors finished in the red, but only consumer discretionary endured a significant decline. This sector was mainly Tesla (TSLA) (15% of the sector), which dropped more than 14%.

Ironically, consumer-facing names enjoyed strong outings, including Dollar Tree (DLTR) which was presented as the poster child of the danger from tariffs, only a day earlier. Yesterday, Dollar Tree (DLTR) was the number one percentage gainer in the S&P 500. The top ten advancers included Norwegian (NCLH), Airbnb (ABNB), and Live Nation (LYV) shares.

Yesterday's kerfuffle provided cover for those who were eager to take some chips off the table, and some were rotated into small caps.

Today’s Session

The jobs report came in better than expected at 139,000.

• Consensus: 125,000
• Whisper: 110,000

Average hourly wages increased by +0.4 % M/M and +3.9% Y/Y. This dovetails with the fascinating phenomenon of higher incomes and higher savings, which bode well for the economy.

I was disappointed in the labor force participation. This is a bifurcated economy masked by those with many wealth gains in recent years.