Morning Commentary
Yesterday was akin to whistling past the graveyard as the session never got going because there was too much anxiety. The good news is the market didn’t collapse ahead of today’s session, which is chock full of economics and Jay Powell’s speech at the Brookings Institute.The Russell 2000, up +0.31%, was the best-performing large equity index. The S&P 500 saw five sectors higher, with Technology (XLK) bringing up the rear.
Up volume overwhelmed the down volume, still hinting at bets Powell will not slay the market today.
Market Breadth |
NYSE |
NASDAQ |
Advancers |
1,823 |
2,332 |
Decliners |
1,338 |
2,298 |
New Highs |
46 |
85 |
New Lows |
68 |
189 |
Up Volume |
2.53 billion |
2.90 billion |
Down Volume |
985.51 million |
1.66 billion |
Heat Map
Value stocks continue to dominate growth stocks.
Not all growth is struggling, however, small-cap value is significantly outperforming small-cap growth. So, small is where the action is for the moment.
Data and Chatter
Lots of economic data out today.
Time |
Release |
Period |
Cons |
Prior |
8:15 |
ADP Employment Report |
November |
200K |
239K |
8:30 |
Wholesale Inventories |
October (P) |
|
0.60 |
8:30 |
GDP |
3Q22 (2nd) |
2.8% |
2.6% |
9:45 |
MNI Chicago PMI |
November |
47.1 |
45.2 |
10:00 |
JOLTs |
October |
10.03m |
10.07m |
1:30 |
Jay Powell Brookings |
|
|
|
Keep an eye on JOLTs. That green line below (openings) needs to move much lower; by the same token, the blue line (quits) needs to move higher.
The Fed discount meeting minutes were intriguing. Nine of 12 regional banks voted for a 75-basis points (bps) hike, but three (Kansas City, New York, and Philadelphia) wanted 50-bps. Perhaps Powell will talk 50-bps today.
Portfolio Approach
We are adding a new position in Energy to our Hotline Model Portfolio.
Today’s Session
The updated GDP saw third quarter growth increase to 2.9% from 2.6%, while the street was looking for 2.7%. The release took a little air out of the market.
The headline reads better, but final domestic demand was subdued. Business investment is a key highlight, but residential fixed investment, and even consumer spending is worrisome.
It’s doubtful this will alter what Jay Powell planned to say today.
ADP Jobs Report
At 127,000 the ADP jobs report came in significantly below consensus of 200,000. Moreover, the composition of the report has a number of red flags. Job leavers getting 15.1% raise versus stayers 7.6%, but apparently fewer folks are leaving. Remember JOLTS at 10:00am.
Change by Industry
Goods
Services
Manufacturing down 100,000 is jaw dropping. Conversely, leisure up 224,000 reflects a more active society, but these are the lowest paying jobs in the BLS report.
Buckle Up!
Tweet |
5/12/2025 1:22 PM | Strong Gains |
5/12/2025 9:47 AM | MAJOR PROGRESS WITH CHINA |
5/9/2025 1:15 PM | Friday Fluctuations |
5/9/2025 9:25 AM | SO MUCH EXCITEMENT |
5/8/2025 1:49 PM | First Trade Deal |
5/8/2025 9:37 AM | POWELL SEES NOTHING |
5/7/2025 12:53 PM | Powell Under Pressure |
5/7/2025 9:48 AM | THE LUXURY OF BEING GREEDY |
5/6/2025 1:20 PM | Anxiety Continues |
5/6/2025 9:45 AM | ANXIETY RETURNS |
5/5/2025 1:18 PM | Market Consolidating |
5/5/2025 9:41 AM | MID-CAP MUSCLE |
5/2/2025 1:19 PM | Labor Market Resilience |
5/2/2025 9:57 AM | BACK TO THE STARTING LINE |
5/1/2025 1:31 PM | Big Tech Resilience |
5/1/2025 9:52 AM | MAMA SAID |
4/30/2025 1:35 PM | Midday Recovery |
4/30/2025 9:52 AM | BIG HITTERS ON DECK |
4/29/2025 1:49 PM | Fluctuating |
4/29/2025 9:48 AM | BUY SIGNALS & RECESSION TALK |
4/28/2025 1:22 PM | Earnings Angst |
4/28/2025 10:03 AM | BIG TEST |
4/25/2025 1:16 PM | Quiet Friday |
4/25/2025 9:57 AM | HYSTERIA TO HOPE |
4/24/2025 1:12 PM | Solid Session |
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