NFPs again above expectations yet prior readings revised solidly lower, brought about the initial S&P 500 spike that was decisively sold into. Not wor
th celebrating that there won‘t be Sep rate hike after all. Yields though welcomed the figure, and 10y surged back to 4.20%. Financials with industrials held especially well – and materials with energy doing fine was also to be expected – the worst of thedownswing is over.
As much as Thursday‘s job was rejection of any breakout above 4,529 – 4,535 zone, Friday was about closing below 4,515. This key support held, but given that market breadth improvements are concentrated in tech, the close of 4,519 can still be thoroughly tested when realizations of still tight Fed, perhaps raising in Nov and definitely not cutting any time soon, come back into focus.
Russell 2000 still isn‘t leading the upswing, and actually had been rejected at $190. Also the still very much inverted yield curve is hanging over as Damocles sword.Friday is more of a serious wobble than outright reversal. Financials and industrials need to join in correcting to give the downswing more power, but it‘s understandable that they didn‘t in the goldilock / maybe down the road accelerating economy .
4,515 still remains unbroken on a closing basis, and it takes a fresh push in yields that would help Nasdaq dive below, and take value and cyclicals alongside. 4,492 is still closer than 4,535 given that Friday can be taken as „pivot celebration“, without the pivot.10y yield isn‘t done rising, but would be rejected and sliding to 4% right next, all within a larger move well above 4.50% next year.
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