Jay Powell & Co. are riding high, finally getting on the same page regarding economic trends. The only question now is whether it will be 25 or 50 basis points (bps).

The green light has been flashing for some time, but the Federal Open Market Committee (FOMC) continues to worry about going too fast. On that note, I continue to worry they will be too tepid out the gate, but I was thrilled Powell didn’t use the word “gradual” on Friday.

History Sends Powell a Message

The FOMC cut rates by 50 bps in September 2007, but it couldn’t get in front of a recession, which began three months later and morphed into the Great Financial Crisis.

Heat Map & Market Breadth

Last Friday, it was a party for the S&P 500, where green dominated the screen, and 62 names closed at new highs.

Market Breadth was exceedingly bullish.

Market Breadth	NYSE	NASDAQ
Advancers	2,101	2,973
Decliners	715	1,224
New Highs	161	176
New Lows	17	69
Up Volume	1.79 billion	3.19 billion
Down Volume	702.55 million	1.07 billion

Small-Caps Make Big Move

The iShares Russell 2000 ETF (IWM) looks great, with money flow surging and the Relative Strength Index (RSI) pointing to more upside. We should see a re-testing of the July high.

Dollar Swoons

The dollar’s (DXY) decline is good news for multinational companies in the S&P 500.

The S&P 500 (SPX) is finally back above its 50-day moving average and has to avoid peaking at a double top.

More Earnings

There’s a bounce in the number of S&P 500 companies reporting this week.

Nvidia (NVDA) is the biggie, but CrowdStrike (CRWD), and Dell Technologies (DELL) are critical, and retailers will give a greater insight into the state of the consumer.

There will be lots of economic data this week.  

Then, there is hope for peace in the Middle East. It’s an exaggeration, but it looks like cooler heads are prevailing.

Today’s Session

Durable goods came out this morning, the headline number surged 9.9% against consensus of +4.0%, but the most important component known as core capital goods was -0.4%.  This number is factored into the GDP report.

The key for the market is to maintain upside bias and hope Nvidia (NVDA) can grab the rally reigns.

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