The market went into the weekend with a whimper…sort of. Eleven sectors finished higher, but Technology (XLK) took it on the chin. It underscores how hard it is for the market to finish in the plus column with growth names not participating.

The session was still had an opportunistic feel, as investors didn’t herd into traditional havens but found opportunities in cyclical names. Of course, it is hard to say where the business cycle is these days, but we know parts of the economy will be flushed with cash.

I am concerned whether money can flow from mega-cap tech and other large-cap winners into the rest of the market. Last year, when those names faltered, buyers headed for the hills.

Green on the Screen

There was a lot of green in Friday’s session, as buyers found desperate niches for themselves.

Overall, it was a strong week.

• Advancers swamped decliners.
• New highs climbed above new lows.
• The increase in ‘up volume’ underscored the strong conviction among buyers rather than sellers.

This week sees several potential market drivers:

• Economic data will conclude on Friday with the jobs report.
• Jolt's report will set the tone.
• Automatic Data Processing (ADP) has been known to alter the whisper number for the U.S. Bureau of Labor Statistics (BLS) release.
• The Federal Open Market Committee (FOMC) press conference could be lit. Will Powell temper his victory lap or be even bolder?
• The Institute for Supply Management (ISM) manufacturing data is critical since regional Fed reports have been worrisome.
• The final Michigan Consumer Confidence Report will also have an influence.

Every time we get the jobs report, there is hope it will be conclusive. A major issue has been the massive revisions, and more recently, details have belied the notion the labor market is strong.

Mega-Caps Reporting for Duty

The top five names in the market are responsible for 70% of this year’s rally, and four reports this week.

Insatiable Government Spending

Today, the Treasury Quarterly Refinancing outlines how much money the federal government wants to raise in the next fiscal quarter. The total crossed one trillion and relied heavily on ten-year bonds back on August 1st, which sent the stock market reeling and bond yields soaring. Yellen learned her lesson. The November lst report was released more on short duration and a much lower amount to be raised. It sent the stock market rally into a higher gear, and it hasn’t looked back since.

How Much Does the Quarterly Refinancing Announcements (QRA) Matter – a tale of the tape.

August

• The Ten-Year bond yield surged to 5.0%.
• The S&P 500 (SPX) slipped from 4,600 to 4,100.
• The U.S. Dollar (DXY) rallied 5%.

November

• The Ten-Year bond yield swooned to 3.89%.
• The S&P 500 (SPX) rallied 16%.
• The U.S. Dollar (DXY) tumbled 6%.

It goes without saying, this will be a most consequential week.

Today’s Session

It’s quiet and bias is to the upside, but this week, the market will not be on autopilot.  Yes, good news will be good news, and there is a chance bad news will be good news. But I am not sure how much longer that lasts, especially if bond yields continue to climb higher.

I see more pressure on stocks if the Ten – Year yield ticks up from here.

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