The Friday Review

What we are reading:

July payrolls came in negative for the first time in five months, the prior two months were revised down by a combined 103,000, and wage growth slowed. Also in the roundup: the yen giving back half its intervention gains, a CRA rewrite from two of the three banking agencies, the Fed's first attempt to measure private credit, the end of the broadcast ownership cap, Carvana's push into new cars, and what China is buying with a tenth of America's AI capex.

📉 Nonfarm payrolls fell 23,000 in July against a consensus of a 80,000 addition, and June was revised down from 57,000 to 20,000. Average hourly earnings rose 3.2% against inflation running at 3.5%. Our read is that genuine weakness is starting to show and it is concentrated at the lower end of the income distribution: retail trade shed 19,000 jobs, warehouse clubs, supercenters and other general merchandise retailers lost 21,000 between them, and the number of workers on temporary layoff jumped 153,000. https://www.wsj.com/economy/jobs/july-jobs-report-unemployment-0d7c08a7

💴 The yen has given back nearly half its gains from the first joint US and Japan intervention since 1998, trading at 158.45 Friday morning after reaching 155.23 on Monday. It sat near 164, a four-decade low, before the operation, and the market is now pricing the odds of a second round. https://www.straitstimes.com/business/companies-markets/yen-surrenders-nearly-half-its-gains-from-us-japan-intervention

🏘️ The OCC and FDIC proposed a CRA rewrite that lifts the small bank exemption from $412M to $1B in assets, adds an intermediate tier up to $10B, and caps overhead at community development grant recipients at 15%. The Federal Reserve declined to join, leaving the three banking agencies split as they were in 2020. https://www.bankingdive.com/news/cra-update-occ-fdic-no-fed-anti-redlining/826847/

🔦 The Dallas and New York Feds are launching a joint pilot survey of the $1.3T direct lending market, segmented by borrower EBITDA above $100M, $30M to $100M, and below $30M, with first findings due in Q1 2027. Participation is voluntary and the results are explicitly walled off from supervisory use, making this the first official attempt to measure a market that has no public price discovery. https://watcher.news/news/fed-private-credit-market-survey/

📺 The FCC voted 2 to 1 to scrap the cap limiting any one company to 39% of US television households, a rule in place since 2004. Nexstar's pending $6.2B acquisition of Tegna would put the combined company above 60%. https://www.nbcnews.com/business/rcna587641

🚗 Carvana has bought seven Stellantis dealerships and turned its Casa Grande, Arizona store into the top-selling Stellantis dealer in the country, moving 998 units in June against the 30 to 50 a month it sold before the acquisition. Customers walk the lot and then buy online. https://www.wsj.com/business/autos/carvana-new-car-sales-ddbd12d8

🌙 Chinese tech firms are forecast to spend less than a tenth of what their American counterparts will on data centers this year. Moonshot AI's K3 scores 95% of Anthropic's Fable 5 on common benchmarks at 70% lower cost to run, and Alibaba's $53B three-year AI commitment is a rounding error next to Amazon or Alphabet. https://www.economist.com/finance-and-economics/2026/08/03/how-china-gets-better-bang-for-its-buck-than-america-in-ai