09/05/25
Stocks opened higher on Thursday but it was quiet during the first hour of trading before things picked up and the indices went off to the races. We did get some preliminary employment data that was on the weak side, helping push yields lower and increased the chances of a Fed rate cut this month, and the stock market ran with it. The S&P 500 closed a few points off its all-time high.
It is surprising how often the market moves the day before big news is about to come out. Yesterday started out quiet and you wouldn't think that is a typical reaction on the eve of a major economic report that could have a major impact on interest rates and the stock market. But no, the rally picked up strength as the day wore on and the S&P 500 nearly made another new all time high, so it was as if FOMO was running investors' sentiment.
The August jobs report will come out this morning (Friday) before the opening bell and estimates are looking for 63K to 78K jobs being added, and an unemployment rate of 4.3%, which would be a tick above the prior month.
We know how off these estimates can be and any major surprises could be costly. A big number could put the September interest rate cut in jeopardy, which would be a big disappointment since the market is currently pricing in a 97% chance of a 0.25% cut.
Too small of a number all but guarantees a cut, but it would instill concern about the economy and confirm that last month's disappointing jobs data was not an anomaly.
Remember when stocks sold off on Tuesday after yields spiked higher? That spike is now gone and we actually had the lowest close on the 10-Year Treasury Yield since late April. Today's jobs report could put the nail in the coffin for yields (which would be fine with the stock market) or it could bounce back off some support that connects the recent lows. The jobs report is going to be crucial.
The S&P 500 / C-fund rallied and it was rather odd considering what is at stake today. I have bifurcating views on these kind of days where stocks move up or down sharply before big news. Either the data was leaked and we are getting some front-running of good news. Or someone is sending us a smokescreen to get us small investors leaning the wrong way. We have already seen a modest double top pullback in the S&P so if the data is good, 6500 won't be tough to crack, but it is still considered resistance until we get a few closes above it.
The Dow Transportation Index is not fully participating in the rally as it is well off the July highs compared to the S&P 500. It is still holding at the 50 and 200 day averages, which is good news, but it is underperforming, and as the market leader that is economically sensitive, it needs to start leading on the upside.
Oil and the Transports often move together, unless oil is up on geological reasons like we saw in June. Otherwise, weakening oil and Transportation stocks often means economic concerns. Both are lagging.
Admin Notes:
It's time for the annual NFL Survivor Contest! It's free! Please go here for details: The deadline to sign up is the kick off of the first game on Sunday.
The DWCPF (S-fund) had a big day and it was actually down in early trading yesterday. This first chart is a one day, one minute chart showing the strength on Thursday, but that is because...
... they still haven't fixed that weird quote that we got on September 2nd, and reversal on the 3rd. If they don't fix this, it will be a useless chart for a while.
ACWX (I-fund) had a good day and it looks like the bottom of that trading channel is going to hold again. The dollar was up yesterday and UUP is still in a very tight range for the last month and looking for direction. If there is one technical question mark, it is that yesterday's rally in the ACWX finished filling in Monday's open gap, and sometimes that leads to some resistance.
BND (bonds / F-fund) blasted off yesterday with the 10-year yield making new multi-month lows yesterday. Another big move before big news. Is this leaked jobs data, or is the big money trying to get people leaning the wrong way before the jobs report?
Thanks so much for reading! Have a great weekend!
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
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Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We may use additional methods and strategies to determine fund positions.
Stocks opened higher on Thursday but it was quiet during the first hour of trading before things picked up and the indices went off to the races. We did get some preliminary employment data that was on the weak side, helping push yields lower and increased the chances of a Fed rate cut this month, and the stock market ran with it. The S&P 500 closed a few points off its all-time high.
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It is surprising how often the market moves the day before big news is about to come out. Yesterday started out quiet and you wouldn't think that is a typical reaction on the eve of a major economic report that could have a major impact on interest rates and the stock market. But no, the rally picked up strength as the day wore on and the S&P 500 nearly made another new all time high, so it was as if FOMO was running investors' sentiment.
The August jobs report will come out this morning (Friday) before the opening bell and estimates are looking for 63K to 78K jobs being added, and an unemployment rate of 4.3%, which would be a tick above the prior month.
We know how off these estimates can be and any major surprises could be costly. A big number could put the September interest rate cut in jeopardy, which would be a big disappointment since the market is currently pricing in a 97% chance of a 0.25% cut.
Too small of a number all but guarantees a cut, but it would instill concern about the economy and confirm that last month's disappointing jobs data was not an anomaly.
Remember when stocks sold off on Tuesday after yields spiked higher? That spike is now gone and we actually had the lowest close on the 10-Year Treasury Yield since late April. Today's jobs report could put the nail in the coffin for yields (which would be fine with the stock market) or it could bounce back off some support that connects the recent lows. The jobs report is going to be crucial.
The S&P 500 / C-fund rallied and it was rather odd considering what is at stake today. I have bifurcating views on these kind of days where stocks move up or down sharply before big news. Either the data was leaked and we are getting some front-running of good news. Or someone is sending us a smokescreen to get us small investors leaning the wrong way. We have already seen a modest double top pullback in the S&P so if the data is good, 6500 won't be tough to crack, but it is still considered resistance until we get a few closes above it.
The Dow Transportation Index is not fully participating in the rally as it is well off the July highs compared to the S&P 500. It is still holding at the 50 and 200 day averages, which is good news, but it is underperforming, and as the market leader that is economically sensitive, it needs to start leading on the upside.
Oil and the Transports often move together, unless oil is up on geological reasons like we saw in June. Otherwise, weakening oil and Transportation stocks often means economic concerns. Both are lagging.
Admin Notes:
It's time for the annual NFL Survivor Contest! It's free! Please go here for details: The deadline to sign up is the kick off of the first game on Sunday.
The DWCPF (S-fund) had a big day and it was actually down in early trading yesterday. This first chart is a one day, one minute chart showing the strength on Thursday, but that is because...
... they still haven't fixed that weird quote that we got on September 2nd, and reversal on the 3rd. If they don't fix this, it will be a useless chart for a while.
ACWX (I-fund) had a good day and it looks like the bottom of that trading channel is going to hold again. The dollar was up yesterday and UUP is still in a very tight range for the last month and looking for direction. If there is one technical question mark, it is that yesterday's rally in the ACWX finished filling in Monday's open gap, and sometimes that leads to some resistance.
BND (bonds / F-fund) blasted off yesterday with the 10-year yield making new multi-month lows yesterday. Another big move before big news. Is this leaked jobs data, or is the big money trying to get people leaning the wrong way before the jobs report?
Thanks so much for reading! Have a great weekend!
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We may use additional methods and strategies to determine fund positions.
