The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Ping pong
S&P futures were about flat overnight and started to fall around 2 AM. It’s unclear if there was a news headline that spurred the risk-off action but the downside momentum took hold and that was all she wrote today. Weekly jobless data (221k vs 233k est & 242k prior) was surprisingly strong, which momentarily inspired some bullishness. However, it’s only a matter of time before the DOGE firings and private sector layoffs start showing up with unemployment claims. The S&P 500 opened down about 70 points, climbed to -30 in the late morning, thanks to comments from Commerce Secretary. The tape rolled over at noon and printed the intraday lows at 2:30 PM. The S&P was -130 points at the time and about 20 points below the 200-day moving average. We bounced a little from there and chopped around into the close. Treasury yields came in on the front of the curve and the Fed Funds market now prices in 75 bips of cuts for the year.
OK. The market is bouncing from negativity to optimism day in and day out. It’s unclear whether the world is economically slowing. It’s unclear if a slowing path is a fait accompli. The Fed Funds market is telling us that the economy will probably need some Fed help by year-end. That doesn’t happen if everything is chugging along nicely.
The stock market is starting to agree. Some of the Mag 7 are leading the market lower too. Here’s the latest Mag 7 snapshot.
There’s no deep insight to reveal. The stock market is wrestling with one question. How much slower are things going to get?
The answer is unclear. A bear market will show up it’s a recession. A correction will show up if it’s a slowdown. The bull will turbocharge back into existence if a miracle happens and growth doesn’t skip a beat.
Everything else is smoke and mirrors.
We’ll all pay close attention to February nonfarm payrolls data tomorrow (+160k est vs +143k prior) but don’t expect it to tell us much. The economic weakness, that may or may not be coming, would not have hit that labor data yet.
See you tomorrow.
-Mike
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