Perhaps someone should remind the stock market that the summer is over, and it's time to get over those doldrums and put it into gear.

Interestingly, the default on slow sessions is to retreat into growth sectors, even as the drumbeats for rotation into cyclicals beat louder.

There were no significant decliners, per se, but I’m still concerned with the action in bank stocks over the last few weeks. I suspect profit-taking in Utilities (XLU), which are way ahead of fundamentals. Meanwhile, the massive stimulus package in China is good news for Material (XLB) names.

Economic Surprises Turn Lower

Economic surprises came in positively, but yesterday’s data was ugly, and the details were worse. Take employment, which fell off a cliff in the Richmond Fed Manufacturing Survey.

Consumer confidence is flashing some recession signals, including a plunging present situation assessment for the next six months.

And it needs to be repeated that ‘jobs plentiful minus jobs hard to find’ plunged at a pace always associated with an oncoming recession.

Wheels Down

We might have segued back into a bad news is good news environment, with Wall Street now cheering (and praying) that the Fed has the right stuff to stabilize this economy. At this point, a rocky, soft landing would be acceptable.

This is the data that Jay Powell feared.

Today’s Session

Futures are little changed this morning as the Street waits for upcoming data for clues to the state of the economy.

Mortgage applications crept higher and are now at their highest level since 2022, while the two-week average is near its highest level since 2020.

Mortgage rates dropped to their lowest level in two years to 6.13%.