Midweek Macro Note: Employment Friday, TOFU Trend Ahead?, Technicals, Earnings Review

In this Midweek Macro Note - our Chief Economist covers the employment Friday ahead, the potential for a TOFU - rather than TACO trend, technicals, and an earnings review #MacroEdge

Good Thursday evening MacroEdge Readers and Community, 

This evening, we’ll discuss the latest macro data of the week, the impact of the Trump/Elon crashout, the emerging TOFU trend, key technicals, and review earnings from a few notable names.

Tomorrow brings the release of revisions from the BLS to the April employment data, alongside the initial report for May. While this data is backward-looking, we highlighted last Sunday that employment trends are softening—but not yet at levels that pose a direct concern for markets. However, there are growing risks that these datapoints may shift more meaningfully through the rest of the year.

It’s likely the administration will now attempt to mend its relationship with Musk—though tomorrow could also signal a “shut up and disappear” request, possibly accompanied by an EV credit extension, Starlink funding, or similar incentives.

As this is our Midweek Macro Note, we’ll keep things brief—covering Employment Friday, the Trump/Elon Crashout, the TOFU Trend Ahead, Technicals, and a concise Earnings Review.

While tomorrow’s employment data is important, next week’s May CPI release may prove more consequential. Barring surprises from tariffs or oil, inflationary pressures may continue to cool—though crude appears to have at least found a temporary floor.

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Employment Friday

Tomorrow is employment day - which means our Redeye Macro Note will cover employment/market reactions/technicals for the last day of the market week. The ADP data on Wednesday came in softer than expected - and the lagging JOLTS data (for April) didn’t give us much signal about labor market direction - given that Indeed’s leading live job postings data continues to contract. 

With unemployment (in several categories) at cycle highs - including the important ‘Unemployed Americans Seeking Full-Time Employment’ and job postings continuing to fall gradually - it remains a soft labor market. Given the decline in construction spending, we continue to watch for any signs of weakness in cyclical sectors mentioned on Sunday evening - such as in construction and residential employment - for signs of broader troubles ahead that everyone tends to ignore when equity markets have even mom and pop investors dancing around with glee in the streets.