{"id":75518,"date":"2025-08-03T01:12:21","date_gmt":"2025-08-03T08:12:21","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=75518"},"modified":"2025-08-06T10:02:58","modified_gmt":"2025-08-06T17:02:58","slug":"bears-break-in-breadth-plunges-further-amid-economic-political-shocks-the-market-breadth","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2025\/08\/03\/bears-break-in-breadth-plunges-further-amid-economic-political-shocks-the-market-breadth\/","title":{"rendered":"Bears Break In: Breadth Plunges Further Amid Economic and Political Shocks – The Market Breadth"},"content":{"rendered":"\n

Stock Market Commentary<\/strong><\/h2>\n\n\n\n

Finally the bears break in on all the fun the bulls have had for months. The stock market got overwhelmed with a flood of bad news that was just too difficult to ignore or look through (for now). The July jobs report<\/a> was not just weak but also it included a massive and historic downward revision: “Revisions for May and June were larger than normal. The change in total nonfarm payroll employment for May was revised down by 125,000, from +144,000 to +19,000, and the change for June was revised down by 133,000, from +147,000 to +14,000.” Suddenly, the economy looks a lot weaker, and the pressure will increase on the Fed to lower interest rates despite mounting inflationary pressures from tariffs.<\/p>\n\n\n\n

The U.S. Bureau of Labor Statistics (BLS) matter-of-factly explained the revisions as the result of “additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.” The President preferred a political explanation and unceremoniously fired the head of the BLS, accusing her, with no proof, of manipulating the numbers to make Republicans look bad<\/a>….even though, ironically enough, these bad numbers will get Trump the rate cuts he has been demanding since he got into office. A market already teetering from recalibrating over the economy’s true state also needs to recalibrate on how to interpret ever more politicized government data and research.<\/p>\n\n\n\n

As if the jobs report was not bad enough, the market got slammed by the August 1st deadline on certain reciprocal tariffs<\/a>. For example, Canada received a 35% tariff, and transshipped goods got a 40% tariff. The increasing costs of tariffs look more real than ever…and incrementally harder to overlook.<\/p>\n\n\n\n

Geopolitical tensions added a bonus headache for markets and an even wider opening for bears to break in. A war of words between President Trump and former Russian President Dmitry Medvedev, now deputy chairman of Russia’s Security Council, over the war in Ukraine escalated into Trump announcing the movement of nuclear submarines<\/a>, presumably closer to Russia. While this saber-rattling will likely settle into the background in due time, I am guessing financial markets on Friday were more vulnerable than usual to such provocative headlines. Recall that I think World War Three is now over three years old so none of these tensions surprise me. Also take heed that if a nuclear war breaks out, selling stocks should be one of the last things you worry about…I will sure not spend time writing about deeply oversold market conditions.<\/p>\n\n\n\n