Morning Commentary
Kiss me hard before you go
Summertime sadness
I just wanted you to know
That baby, you the best
-Lana Del Rey
The market is getting that summertime sadness. For me, this is always a melancholy time of last-minute summer vacations and knowing that the easy commute gets longer as the school year starts and those bucolic evenings end earlier. Meanwhile, half the summer rally is gone because things are going too well to slow inflation naturally.
Other Reactions
While equity indices struggled to climb off the session lows yesterday, other knee-jerk reactions eased during the session. The 75-basis points (bps) hike probability spiked to 75% but finished the session at 68.5%
The ten-year bond yield spiked to 3.15 before closing at 3.10.
Heat Map
Financials (XLF) caught a bid, but there were a few green shoots among names in the S&P 500.
Thus, 4,000 failed, and the 50-day moving average had no opposition. While the former is symbolic, there is no doubt 3,900 must hold.
U.S. Consumer
There is lots of focus on U.S. households, which continue to spend. In fact, the Redbook weekly sales report saw another gain – making it three in a row.
The question is how much of this increased spending is inflation adjusted, and how much is a greater reliance on credit cards. Visa (V) tells us that the U.S. payment volume increased by 11% last month, driven by credit +17%, and less on debit +7%.
I suspect the Fed doesn’t want any spending increases at all.
Today’s Session
Okay, the market will give it the old college try today, which is something of a ‘must hold’ session at least with respect to the near-term direction.
ADP unveiled their new job report with major over halls that attempt to be more in line with BLS.
The initial read of 132,000 is significantly below the 288,000 expected, so this work will get a big review Friday morning, as some firms are looking for the BLS number to surpass 400,000.
One of the main takeaways is small business cannot compete. With average wages up only 5.4% versus 8.3% at large firms, it no wonder small businesses lost 47,000 workers to large businesses gains of 54,000.
Right now, the street likes the number, which if replicated on Friday eases pressure on the Fed to go nuclear.
I like the action, but its early – want to see S&P 500 back above its 50-day moving average at the close.
Tweet |
3/28/2024 1:39 PM | Fruitful Quarter |
3/28/2024 9:50 AM | LISTEN TO THE MARKET |
3/27/2024 1:40 PM | Mostly Higher |
3/27/2024 9:32 AM | U-TURN? |
3/26/2024 1:08 PM | Everything Is Up |
3/26/2024 9:42 AM | TAPPED OUT (I HOPE YOU AT LEAST GOT A T-SHIRT) |
3/25/2024 1:33 PM | Not A Mutiny |
3/25/2024 9:35 AM | STAYING THE COURSE…BEYOND TECH |
3/22/2024 12:56 PM | Toll on Americans |
3/22/2024 9:38 AM | A TAD TIRED |
3/21/2024 1:55 PM | Building on Gains |
3/21/2024 9:30 AM | A COMFORTING FED |
3/20/2024 1:33 PM | Pivotal Moment |
3/20/2024 10:00 AM | HERE COMES THE FED |
3/19/2024 1:33 PM | Picking Up Steam |
3/19/2024 9:35 AM | RUMBLINGS IN THE BOND MARKET |
3/18/2024 1:48 PM | Mag 7 is Back |
3/18/2024 9:39 AM | THE PARTY IN SAN JOSE WILL BE LIT |
3/15/2024 1:38 PM | Realtors Settle |
3/15/2024 9:33 AM | AN UNEASY PAUSE |
3/14/2024 1:43 PM | Sticky Inflation |
3/14/2024 9:48 AM | GOING TO A GO-GO |
3/13/2024 2:16 PM | Taking a Breather |
3/13/2024 9:51 AM | ALL SO EPIC |
3/12/2024 1:42 PM | Marching Higher |
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