The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Mud-slinging.
It was a normal day. Futures were about flat overnight and the index caught the usual premarket bid. The index opened up a little, dipped a little, then rallied a little. After lunch the S&P 500 returned to flat until dropping significantly after 3 PM. The reason? Trump and Musk started insulting each other on Twitter and Tesla stock dropped 15-plus percent, dragging the market down with it. TSLA, by itself cost the index 16 points. Anyway, the point is that petulant drama shook up the stock market. The bond market didn’t care, nor should it.
Tomorrow’s nonfarm payrolls data (+126 est vs +177k prior) is what deserves our attention. Either the number spurs investors to worry about a recession or it doesn’t. It’s just that simple. What number might do that? I’m guessing anything less than 80k. Whether my guess is good or not, the bond market will go a long way towards interpreting the payrolls data. If bonds react as though recession risk returns as a front-burner issue, that will be the narrative.
The equity market has thrown its concern about a recession out the window this past month. Anything that brings back that fear, whether justified or not, will be quite a bearish catalyst.
Nonfarm payrolls prints at 8:30 AM.
See you then.
-Mike
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