What a perfect way to cap off a fantastic week. Stocks appeared ready to tank as key support levels were being tested early on. They held, and buyers emerged. It was the kind of week that typically attracts even more buyers.

Advancers swamped decliners.

Buyers are split into two camps: those chasing winners and those looking for bargains, even among names that laid eggs at earnings time and offered subpar guidance. There is an argument that earnings reactions were too adverse for a while.

Small-caps and mid-caps enjoyed the best day on Friday.

Meanwhile, new highs beget new highs, which soared above new lows.

Market Breadth	NYSE	NASDAQ
Advancers	2,335	3,183
Decliners	477	1,052
New Highs	343	238
New Lows	10	54
Up Volume	2.16 billion	2.83 billion
Down Volume	446.79 million	1.25 billion

Sea of Green

All eleven sectors in the S&P 500 rallied on Friday, with Utilities (XLU) extending their remarkable run.

Powell’s Moment

This week, it's all about the rate cut; everyone has a strong opinion. I’m still in the 50-basis points (bps) camp because the jobs market is far worse than government data shows, and cheerleaders continue to ignore it.  

The stakes are enormous.

Today’s Session

The Empire Fed Manufacturing report came in better-than-expected and continues to edge higher.

Prices moderated but prices paid were still significantly higher than received.  The number of employees is still at a negative read, although the workweek improved.  The report won’t phase the Fed one way or another.

Rate Cut Mania

I have to say it is amazing how many experts are now calling for a 50-bps rate cut this Wednesday, including a number that pushed back against me for suggesting the same over the past few months.

I understand the Street is worried because the last three rate cutting cycles, that began with 50 bps, were associated with recessions. The thing is the rate cuts didn’t cause recession.  On the contrary, the Fed was too late to stave off downturns.

Why be late again?

• January 2001
• September 2007
• March 2020

Comments

You can't look at the economy thru the rearview mirror. But that's what the FED does. Why do you think all of a sudden they get it right. They will cut 25 not 50 as they should. BUT BUT BUT a rate cutting cycle has begun. Mike T. on 9/16/2024 7:33:39 AM

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