More new highs for the S&P 500 (C-fund) and Nasdaq on Wednesday while small caps (S) lagged a bit and the I-fund led thanks to a sell off in the dollar following a weak ADP employment report. That data also let to yields falling sharply which gave bonds and the F-fund a healthy gain on Wednesday.
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After the weak weekly employment data, now comes the monthly jobs report for June today, which seems to be leaning toward the weak side based on that weekly data, but we know how those can go - they have tended to beat estimates and revise prior reports lower.
Estimates are expecting to see a gain of about 170K to 185K jobs for June and an unemployment rate of 4.0%. That was following the +272K jobs in May.
While we do see evidence of pre-holiday reversals in some of the charts, is today considered post holiday action, or still part of the pre-holiday action since it will be a very light trading day, barring any major jobs report surprises, or maybe even a political surprise?
There are rumors floating that President Biden may let the country know his fate going forward by Monday - whether he is pulling out of the 2024 race or not, or even if he will resign his current presidency. What will that do to the stock market? It's not something we deal with very often. I am writing this early on Thursday so there may be an update by the time you read this.
I know the market reacted with higher yields during the two days after the presidential debate as investors expected more spending and lower taxes out of Trump, which could be inflationary, but on Wednesday the weak employment data sent them back down. What would a resignation do, if that actually happens? The volatile moves in yields could be holiday related but again, is today still pre-holiday or post holiday? I suggest it's still pre-holiday but sometimes big news like this or even the jobs report makes it more of a "regular" trading day.
The other major concern I have, as I motioned the other day, is the price of oil which is flirting with $84 again, and over the last few years, that hasn't been a good number for the stock market.
OK, I wanted to make this quick today so I'll end it there and we'll let the jobs report give us more clues about the economy and the possible impact on interest rates, and perhaps we will know more about the political environment over the weekend.
The S&P 500 (C-fund) moved to new highs again on Wednesday. You can take the approach that it is too extended to stay bullish, or take the "if it ain't broke", approach and stay with the momentum. The PMO indicator did another touch and go earlier this week.
The S-fund (DWCPF) was up on Wednesday but the action wasn't all that bullish as it closed near the lows of the day. However, the modest gain did push it back above the 36-day EMA, which has been meaningful on this chart all year. It looks like it wants to bust out of that consolidation, but it has been disappointing investors for months now so it's difficult to trust.
The EFA (I-fund) had a big rally after the dollar got slammed on Wednesday. The bear flag broke to the upside, so is this just a case of a pre-holiday reversal, or is the I-fund back in action?
BND (bonds / F-fund) gapped up on Wednesday (yup, pre-holiday reversal) and that puts it back in the bullish looking flag after the pullback back from the top of the red ascending trading channel, to the bottom.
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.html
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 use additional methods and strategies to determine fund positions.
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After the weak weekly employment data, now comes the monthly jobs report for June today, which seems to be leaning toward the weak side based on that weekly data, but we know how those can go - they have tended to beat estimates and revise prior reports lower.
Estimates are expecting to see a gain of about 170K to 185K jobs for June and an unemployment rate of 4.0%. That was following the +272K jobs in May.
While we do see evidence of pre-holiday reversals in some of the charts, is today considered post holiday action, or still part of the pre-holiday action since it will be a very light trading day, barring any major jobs report surprises, or maybe even a political surprise?
There are rumors floating that President Biden may let the country know his fate going forward by Monday - whether he is pulling out of the 2024 race or not, or even if he will resign his current presidency. What will that do to the stock market? It's not something we deal with very often. I am writing this early on Thursday so there may be an update by the time you read this.
I know the market reacted with higher yields during the two days after the presidential debate as investors expected more spending and lower taxes out of Trump, which could be inflationary, but on Wednesday the weak employment data sent them back down. What would a resignation do, if that actually happens? The volatile moves in yields could be holiday related but again, is today still pre-holiday or post holiday? I suggest it's still pre-holiday but sometimes big news like this or even the jobs report makes it more of a "regular" trading day.
The other major concern I have, as I motioned the other day, is the price of oil which is flirting with $84 again, and over the last few years, that hasn't been a good number for the stock market.
OK, I wanted to make this quick today so I'll end it there and we'll let the jobs report give us more clues about the economy and the possible impact on interest rates, and perhaps we will know more about the political environment over the weekend.
The S&P 500 (C-fund) moved to new highs again on Wednesday. You can take the approach that it is too extended to stay bullish, or take the "if it ain't broke", approach and stay with the momentum. The PMO indicator did another touch and go earlier this week.
The S-fund (DWCPF) was up on Wednesday but the action wasn't all that bullish as it closed near the lows of the day. However, the modest gain did push it back above the 36-day EMA, which has been meaningful on this chart all year. It looks like it wants to bust out of that consolidation, but it has been disappointing investors for months now so it's difficult to trust.
The EFA (I-fund) had a big rally after the dollar got slammed on Wednesday. The bear flag broke to the upside, so is this just a case of a pre-holiday reversal, or is the I-fund back in action?
BND (bonds / F-fund) gapped up on Wednesday (yup, pre-holiday reversal) and that puts it back in the bullish looking flag after the pullback back from the top of the red ascending trading channel, to the bottom.
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.html
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 use additional methods and strategies to determine fund positions.
