The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Bears’ time
Like many prior days, premarket futures were bid small but the bears took over later on. The S&P 500 opened down about 40 points and wandered about that level for most of the day. Macro data showed economic strength and the weekly jobless data (218k vs 233k est & 232k prior revised from 231k) showed labor market strength. Yields climbed some and Fed Funds futures are not as certain as last week about 25 bip cuts in the next to FOMC meetings. Current prices suggest 22 bips of cutting in October and 39 total come December. Capital flow was pretty elevated at 120%.
Investment landscape-shifting headlines did not break and we continue to trade bearishly in a thin-news environment. This is different than for much of the year. A climbing tape went hand-in-hand with immaterial news cycles. For the last three sessions, the bears have benefited from quiet headlines. Perhaps this is an important shift in market psychology? I don’t think so but it a peculiar difference worth highlighting.
The bullish enthusiasm has certainly cooled off. It hasn’t reignited after three down sessions and a lack of substantial news. This is unusual over the last five months. I continue to think that the dip-buyers are going to go bonkers with the bargains they’re seeing but I’m not sure when they’ll go to work.
It’s not like them to be patient nor wait for a news catalyst. I wonder what they’re thinking.
See you tomorrow.
-Mike
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