Hedgie's Market Edge - August 4, 2025

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Well folks, that was quite a week. Just seven days ago, I was writing about markets climbing walls of worry and enjoying summer calm. Then Friday's jobs report landed like a punch to the gut, and suddenly everyone remembered that economic data actually matters. Sometimes the market has a way of humbling even the most prepared among us.

The S&P 500 dropped 2.4% to close at 6,238, wiping out most of July's gains and reminding everyone that what goes up can indeed come down. But the real story wasn't just about stock prices falling. It was about a fundamental shift in how we're thinking about the economy and what's coming next.

THE JOBS REPORT THAT CHANGED EVERYTHING

Let me explain why Friday's employment report was such a big deal. The headline number showed only 73,000 new jobs were created in July, well below the 104,000 economists expected. But that wasn't even the worst part.

The government also went back and revised the previous two months downward by 260,000 jobs. Think about that for a moment: nearly a quarter million jobs that we thought existed actually didn't. It's like finding out your bank account has $2,600 less than you thought it did.

Here's where it gets really concerning. Full-time jobs actually fell by 440,000 while part-time jobs increased by 237,000. When you lose your full-time job at the factory and pick up two part-time gigs at retail stores, the government counts that as job growth. But your family budget knows the difference between a $25-per-hour manufacturing job with benefits and two $12-per-hour retail jobs without them.