The AI bulls ushered in the first hard threshold after the sharp rise at the end of July! Kalshi runs off Wall Street to issue July non-farm warning

The Zhitong Finance App learned that the US Bureau of Labor Statistics is scheduled to release the July non-farm payrolls statistics report on Friday morning local time. According to Dow Jones's unanimous expectations, economists generally expect 85,000 new jobs for the month. However, real money bettors of the prediction market platform Kalshi, a world-renowned paid forecasting platform, believe that actual non-farm payroll employment data may fall below this level. For the stock market bulls, especially those in the semiconductor sector, the “low growth but not stalled” non-agricultural labor market is something they really want to see.

Speculators of prediction markets companies (prediction markets companies) such as Polymarket and Kalshi seem to think that the probability that US employers will add more than 80,000 new jobs in July is only 47%; at the same time, they also believe that the probability of adding more than 70,000 new jobs in that month is about 60%.

The contract on the Kalshi prediction platform requires traders to predict whether the July employment data will be higher than a set of given values. The contract will be settled in cryptocurrency or stablecoin according to official data published by the US Bureau of Labor Statistics.

Although unlikely, it is not impossible for the actual data to exceed the market's unanimous expectations. There are still speculators who seem to think that the probability of US employers adding 90,000 jobs in July is 41%, while the probability that the number of new jobs will reach six digits is slightly higher than one-third.

However, speculative forces on forecasting platforms also seem to believe that the probability of this figure falling below 60,000 people is one-third. This also shows that the central expectations of market speculators are still close to the 70,000-80,000 range, but they are clearly wary of tail risks below 60,000.

Last month, paid punters on the Kalshi platform agreed that the probability of employers adding more than 125,000 new jobs in June was 63%, higher than the 115,000 expected by the market. However, the official data released by the US government is far below this level, showing that only 57,000 new jobs were added that month.

The US Bureau of Labor Statistics will release the July employment report on August 7; according to the Reuters economist survey, economists expect an average of about 83,000 to 85,000 new non-farm workers, and the unemployment rate is about 4.3%. The median forecast from other survey reports is roughly 82,000 to 90,000, and more optimistic Wall Street agencies such as Barclays forecast about 100,000 people. Compared with an increase of only 57,000 people and an unemployment rate of 4.2% in June, the unanimous expectation is essentially betting on a “low growth but not stalled” moderately growing labor market.

Just the right soft landing for agriculture — that is, a moderate slowdown in new jobs, only slight changes in the unemployment rate, and wage growth continues to cool down, which can not only reduce the pressure on inflation and the Federal Reserve to raise interest rates further, reduce real interest rates and discount rates, but also not trigger a recession, a decline in corporate profits, or a reduction in AI capital expenditure. After the non-agricultural sector increased by only 57,000 people in June, the market was relieved precisely because the cooling of the labor market weakened expectations of recent interest rate hikes.

Non-agricultural agriculture has become a “life and death line” for tech stock bulls: a moderate cooling of employment is the ideal fuel for an AI-themed rebound

For global stock bulls, the most favorable outcome is not that the stronger the non-agricultural sector, the better, but the addition of about 70,000-100,000, and the unemployment rate stabilized at 4.2% to 4.3%, or the “Golden Girl Portfolio” where the salary growth rate is too hot: it can not only prove that US consumer and corporate profits have not slipped into recession, but it also does not force the Federal Reserve to strengthen the interest rate hike path, thereby reducing real interest rates and equity risk premiums, and is particularly beneficial for AI computing power infrastructure themes and semiconductor AI application stocks that have been around for a long period of time and are most sensitive to valuation — that is, AI application stocks for AI computing power infrastructure and semiconductors assets.

If the number of new jobs significantly exceeds 100,000 and wages accelerate again, the market will interpret this as demand is still overheated, and the probability of interest rate hikes in September, and the yield on US dollars and US bonds may rise again; by the end of July, the market had already included a probability of about 64% for the September interest rate hike, while the yield on 30-year US Treasury bonds once rose to around 5.24%, and there is no room for high-valuation growth stocks to withstand the second round of interest rate shocks. Conversely, if the key market threshold of 60,000 is added and accompanied by rising unemployment, falling working hours, and a sharp drop in previous value, bonds may initially rise, but the trading logic will soon switch from “favorable interest rates” to “profit decline,” and cyclical stocks, financial stocks, and global export markets will be under pressure.

Therefore, the non-agricultural industry is testing whether the violent rebound at the end of July was a technical repair after the end of the consolidation, or the first hard threshold for a new round of upward risk appetite. On August 3, Iran's negotiations hoped to push crude oil down about 5% and US bond yields to fall. S&P 500 and NASDAQ rose 1.48% and 2.13% respectively, indicating that what bulls currently rely most on is the resonance of “cooling oil prices+falling interest rates+strong technology profits”; once non-agricultural farmers are too strong, they will raise interest rate anchors again and reduce AI valuations, and too weak will shake profits and credit quality.

The market continued to embrace a bullish trend in August. What is really needed is not a single favorable factor, but rather a moderate cooling of employment, a continued decline in oil prices, and resilience in corporate profits; only in this way can the mandatory settlement and clearance of leveraged positions and extremely crowded positions in July turn into a healthy trend of capital and additional positions; otherwise, the current rebound may only make up for the high volatility generated by extreme deleveraging.