The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Old habits
US equity investors went to work pushing prices higher. The open was tepid, +8 points. The tape jiggled around about an hour, briefly falling to flat, then recovering. From 10:30 AM on, the bulls controlled the market and the S&P has recovered most of the losses from Friday and Tuesday. Treasury yields fell some across the curve and Fed Funds futures price a 25-bip cut on Sep 17th with 97% probability. Total Fed cuts for the year price at 60 bips.
This morning’s economic data contained a lot of different datapoints but the market didn’t react significantly to them. ADP (+54k vs +68k est & +106k prior revised from +104k) was a bit weak. Weekly jobless (237k vs 230k est & 229k prior) was a bit weak also. PMI data was a bit weak too. ISM services were a bit stronger. Prices paid were a bit lower.
It was a slightly mixed bag of results. The main conclusion to this data is that the big picture narrative is unchanged. We’re waiting on nonfarm payrolls data (+75k est vs +73k prior) to really influence us though.
Today was pretty unremarkable if you step back some. The headlines were inconsequential and the local bottom appears to have printed on Tuesday at noon. Yesterday was a bit of a confirmation and today became continuation. I think the equity investors, who were willing to act ahead of nonfarm payrolls, just stuck with the standard playbook. Easy as A B C.
I think it was just that simple for most of today’s buyers.
Whether they are smart or foolish will be determined by tomorrow’s action.
I suspect they’ll be vindicated but ya’ never know.
See you tomorrow.
-Mike
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