Trump-Musk fallout provides entertainment ahead of US payrolls​

​​​A bromance ends

​The ‘bromance’ between Trump and Elon Musk has come to an end it seems, as most people suspected it would.

​The two men, who had been such close allies in the election campaign and in the early months of the administration, took to social media to vent their differences after comments from Trump in a press conference regarding Elon’s departure from the US government.

​Tesla’s shares were the big mover on the day, slumping to their lowest level in a month and suffering their biggest one day fall in history.

​Does it matter much for investors? For those focused on the longer-term picture, probably not. Tesla’s travails are of course important for shareholders, and given its status as an iconic stock it could have some short-term impact. But the main focus for most investors will continue to focus on the outlook for the global economy and earnings, and wait to see whether the tariff turmoil of the past two months has begun to have a sustained impact on activity.

​For Tesla shareholders, the outlook is trickier to parse. Musk has burnt a lot of goodwill among non-MAGA voters in the US, and indeed in other countries around the world. Can he recover at least some of this lost ground now, or are people permanently alienated from him and his car company? Sales data from the UK showed that sales were down 45% in May, a figure replicated in other key markets.

​The next earnings report comes on 22 July. Six weeks is a long time in markets, and the shares might be able to recover in the meantime, but they look bruised after yesterday’s drop.

​Payrolls still to come

​Of course, last night’s public argument was a great entertainment, but a distraction from the real business of the week, namely non-farm payrolls (NFPs).

​Last month’s 177,000 figure is expected to be followed up by growth of 130,000 according to a Reuters. Wednesday’s ADP report pointed to weak job growth, but the link between the two is tenuous at best, and should not be taken as a firm indication that today’s figures will be poor too.

​A lot of attention will be paid to the wage growth figures too. Reuters polling expects a mixed picture; pay packets are expected to rise 0.3% from last month’s 0.2%, but slow to 3.7% from 3.8% on an annual basis.

​This week has seen markets react positively to bad data, or at least look through it, perhaps on the basis that activity will recover in subsequent months now that tariffs have been paused. This is not a given for today however, and with the weekend looming stocks may drop as investors trim risk in the final session of the week.