09/10/25
Stocks were mixed yesterday with large caps rallying, but small caps slipped lower as bond yields moved up. The action was mostly quiet as we brace for today's PPI wholesale price data, and tomorrow's CPI consumer prices report. Bonds and the F-fund were down with yields rebounding.
It wasn't a surprise, but the big news yesterday was that the BLS finally released the jobs revisions for March 2024 through March 2025 and they reduced the number of jobs created during that time by 911,000. We saw similar negative revisions in the prior two years so the labor market was not nearly as strong over the last three years as was reported. Is there any question as to whether the Fed knew this already, since we all knew it?
More: https://www.zerohedge.com
And this was just through last March so who knows how much have they been off in the last 5 months since?
You would think that if the Fed knew this they would be more concerned about the labor market and would have been cutting interest rates by now but again, tariff inflation, 3% GDP, and all time highs in the stock market have been a good counter argument to not cut yet. They've been in a tough spot, but now they are going to start cutting aggressively - at least the probabilities say so.
Check this out: The current Fed Funds Rate is 4.25% to 4.50%. If we go out to the end of next year (2026), these are the expected Fed Fund rates per the CME Group:
It is telling us that there is about a 94% probability that the rate will be 2.25% to 2.50% or lower by the end of 2026. And about a 50% chance that it will be 1.75% to 2.00% or lower. That's a big drop and a big potential boost to the economy, so we know why people may not be selling stocks. The question here is, are they expecting this because they anticipate a major decline in the economy?
Also, there's no guarantees because we came into this year expecting up to six 0.25% cuts and so far there have been none.
Despite those negative job revisions, stocks were mostly higher yesterday as it was rear-view mirror data, although small caps dipped on higher yields, and the charts and indicators have been telling the story. Investing on the questionable fundamentals has likely left investors behind. The problem is, while the index stock charts have looked good, we have had some indicators flashing warning signs for months. It just hasn't produced any trouble for the stock market yet.
Oracle was up nearly 30% after hours yesterday, after reporting earnings. This should help tech again today, although the PPI data could have the final say on that.
The S&P 500 / C-fund made another new closing high yesterday, although it is still below Friday's intraday highs. Retracing that breakdown candlestick is typical, but it's what happens once it is retraced that will be more telling. We are seeing a rising wedge-like formation, which tend to be bearish, but bearish tendencies have been ignored repeatedly in the market recently. Let's see what the inflation data does to this formation in the next two days.
The Dow Transportation Index closed below its 50-day EMA for the first time in many weeks, after breaking below a bearish flag earlier in the month. It's still hanging around support and above that 200-day average, and the 50-day EMA recently crossed above the 200-day average, but notice that the 200-day EMA is still moving down. This market leader is in a critical spot.
Late yesterday President trump asked the EU to impose 100% tariffs on India and China to pressure Russia into ending the Ukraine war. Interesting, and never a dull moment.
The DWCPF* (S-fund) was down on the move up in yields yesterday, and of course yields will be very active when the PPI and CPI data is released this week, so we could see some volatility here.
* There is a bad quote that occurred on DWCPF on September 3rd of 20,000 and it has distorted the chart, so until they fix that, this chart will be a 5-minute chart spanning just a few days.
ACWX (I-fund) was down but it is just stalling at the prior high.
The dollar is holding firm inside that channel and the I-fund will do much better if this breaks downward instead of to the upside.
BND (bonds / F-fund) pulled back to fill in a small open gap, and so far the breakout line held as support, but that big open gap below 74 is still going to be a potential pullback target.
Thanks so much for reading! We'll see you back here tomorrow!
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
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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 were mixed yesterday with large caps rallying, but small caps slipped lower as bond yields moved up. The action was mostly quiet as we brace for today's PPI wholesale price data, and tomorrow's CPI consumer prices report. Bonds and the F-fund were down with yields rebounding.
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It wasn't a surprise, but the big news yesterday was that the BLS finally released the jobs revisions for March 2024 through March 2025 and they reduced the number of jobs created during that time by 911,000. We saw similar negative revisions in the prior two years so the labor market was not nearly as strong over the last three years as was reported. Is there any question as to whether the Fed knew this already, since we all knew it?
More: https://www.zerohedge.com
And this was just through last March so who knows how much have they been off in the last 5 months since?
You would think that if the Fed knew this they would be more concerned about the labor market and would have been cutting interest rates by now but again, tariff inflation, 3% GDP, and all time highs in the stock market have been a good counter argument to not cut yet. They've been in a tough spot, but now they are going to start cutting aggressively - at least the probabilities say so.
Check this out: The current Fed Funds Rate is 4.25% to 4.50%. If we go out to the end of next year (2026), these are the expected Fed Fund rates per the CME Group:
It is telling us that there is about a 94% probability that the rate will be 2.25% to 2.50% or lower by the end of 2026. And about a 50% chance that it will be 1.75% to 2.00% or lower. That's a big drop and a big potential boost to the economy, so we know why people may not be selling stocks. The question here is, are they expecting this because they anticipate a major decline in the economy?
Also, there's no guarantees because we came into this year expecting up to six 0.25% cuts and so far there have been none.
Despite those negative job revisions, stocks were mostly higher yesterday as it was rear-view mirror data, although small caps dipped on higher yields, and the charts and indicators have been telling the story. Investing on the questionable fundamentals has likely left investors behind. The problem is, while the index stock charts have looked good, we have had some indicators flashing warning signs for months. It just hasn't produced any trouble for the stock market yet.
Oracle was up nearly 30% after hours yesterday, after reporting earnings. This should help tech again today, although the PPI data could have the final say on that.
The S&P 500 / C-fund made another new closing high yesterday, although it is still below Friday's intraday highs. Retracing that breakdown candlestick is typical, but it's what happens once it is retraced that will be more telling. We are seeing a rising wedge-like formation, which tend to be bearish, but bearish tendencies have been ignored repeatedly in the market recently. Let's see what the inflation data does to this formation in the next two days.
The Dow Transportation Index closed below its 50-day EMA for the first time in many weeks, after breaking below a bearish flag earlier in the month. It's still hanging around support and above that 200-day average, and the 50-day EMA recently crossed above the 200-day average, but notice that the 200-day EMA is still moving down. This market leader is in a critical spot.
Late yesterday President trump asked the EU to impose 100% tariffs on India and China to pressure Russia into ending the Ukraine war. Interesting, and never a dull moment.
The DWCPF* (S-fund) was down on the move up in yields yesterday, and of course yields will be very active when the PPI and CPI data is released this week, so we could see some volatility here.
* There is a bad quote that occurred on DWCPF on September 3rd of 20,000 and it has distorted the chart, so until they fix that, this chart will be a 5-minute chart spanning just a few days.
ACWX (I-fund) was down but it is just stalling at the prior high.
The dollar is holding firm inside that channel and the I-fund will do much better if this breaks downward instead of to the upside.
BND (bonds / F-fund) pulled back to fill in a small open gap, and so far the breakout line held as support, but that big open gap below 74 is still going to be a potential pullback target.
Thanks so much for reading! We'll see you back here tomorrow!
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.
