With the Dow closing lower, snapping a four-day win streak, as treasury yields also sank after weak ADP jobs data, Josh Schafer joins us now with the trading day takeaways. Josh.

Hey Josh, yeah, I want to start with that weak economic data. I feel like that was the main story of the day and a day where the indexes really didn't go anywhere, right? So we started 8:30 this morning, we get fresh data from ADP and it shows that private payrolls grew by their lowest monthly number in over two years, Josh. So, 37,000 jobs added in the private sector. ADP chief economist, Neil Richardson, told me this morning the key to this print was a hesitancy to hire that they're seeing right now from private companies. Essentially saying with all the uncertainty out there, you have weak consumer sentiment, you, of course, have trade war uncertainty just weighing on firms and saying, you know what, maybe I just won't do anything right now. I'm gonna sort of press pause, if you will. Another area of the economy where we saw pause this morning, this is from the ISM Institute for Supply Management services PMI entering contraction territory below 50 for the only the fourth time, you can see, we've been on pretty consistent high prints here. Only the fourth time in the last five years we've seen this. Now, Jefferies U.S. economist Tom Simons made sense of this saying, contraction, by technical speaking because it was below 50, largely again, he felt like pause was the key word. You're just seeing firms in the services sector saying I want to wait and see. I want to see how all of this plays out. New orders came down, prices paid went up, a feeling of perhaps stasis in some of this main data right now.

So, ADP below consensus, ISM services below consensus, any good news in any of this data today?

Yes. There was some good news, Josh. People are still making money. So what we're looking at here is wage growth for job changers, job stayers. Job changing means, of course, you go to a new job. Job staying would mean you stay at your job. We're well off the highs here that we saw in 2022 during that Great Resignation, right? But you're still looking at about 7% year-over-year wage growth for people that change their jobs and 4.5% for people that stay at their jobs. Richardson, making the point this morning, again, that's ADP's chief economist, it hasn't moved that much. If wages were coming lower, that would start to be one of the key concerns, right? But they're not. They're sort of staying steady, and she said, if you have steady wages, people aren't getting laid off, that gives the Fed maybe a little bit of room to say, okay, look at this data, let's wait and see. Continue to do that wait and see to potentially cut rates. But right now, it is a sign of some strength in what is a cooling labor market.

Which, uh, yeah, should be good for consumer spending.

Right. Exactly, right? We need money to be able to go and spend it.

Yep. Takeaway number two, Josh. It has been a week of S&P 500 target raises. This was the third raise that we've seen this week alone, this one coming from Barclays, moving up to 6,500, which I should note, we're not that far from, right? So, Benu Krishna, over at Barclays, not necessarily calling for the type of rally we're seeing from the team at Deutsche Bank. So I spoke with Krishna this afternoon, he said the key piece that he really saw driving up his target a little bit, not earnings, he kept his earnings estimate the same, he said, with peak tariff uncertainty gone, he thinks the market can now trade at a little bit of a higher valuation. So that valuation goes up a little bit, these calls are often just simply price-earnings ratio times my earnings estimate and then you get to 6,500 versus their prior call of 5,900.

And did he give you any kind of color under the hood, what he likes, what he doesn't like?

You know, it was interesting, Josh, he still likes Big Tech. And so, he's been pretty big on Big Tech over the last two years at this point, and what Krishna told me, look at last earnings season, right? That's where a lot of the earnings growth was, it still came from that MAG 7 cohort, and he said MAG 7 still trading at a lower valuation than we saw pre-Liberation Day, pre-February, that sell off. Maybe there's more room to run in the multiple for some of those Big Tech stocks, which have already been rallying a decent amount.

All right. Thank you, Joshua. Appreciate it.