Stocks overcame a midday sell off while Jerome Powell was speaking yesterday, to close strong and at the highs of the day as the third quarter came to an end. Powell reiterated their outlook on interest rates, but briefly hinted that they may not go another 0.50% at the next meeting, sending stocks down temporarily before the end of quarter window dressing kicked in during the final half hour of trading.
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We got some late day end of quarter shenanigans as money managers padded their quarterly reports with some late buying yesterday, putting an exclamation mark on September's comeback, ending the month with decent gain considering the negative seasonal expectations heading into the month.
The strong month was mostly thanks to an aggressive interest rate cut from the Fed in September, and the stimulus explosion that pushed China's stock market up like a rocket over the last week.
Now we start a new quarter with the wind still at the back of the market as Fed liquidity will pick up this month in addition to their lower interest rates. Add a little political incentive as DC tries anything to keep Trump from getting in office again, and the economic picture will be spit shined cleaned. They may prove me wrong with a poor jobs report this Friday, but I wouldn't count on it.
We will get a couple of important economic reports this morning, but the imminent issue of the day is going to be whether the largest longshoremen’s union in North America was going to begin striking after midnight last night if a new contract was not reached with ports management. It could be a big deal. You may know by the time you read this, and perhaps they will get the government involved here to prevent any major supply chain issues.
The 10-year Yield was up and closed above 3.8% for the first time since September 1st. As I mentioned the other day, a move above 3.8% to 3.9% could shake up the stock market and it's getting close.
The dollar was up sharply yesterday but is still lingering below some stubborn resistance.
Here's another look at the election year seasonality calendar where October is typically bad news for the stock market. September bucked that trend, and perhaps with no incumbent, but rather a one time president going against the incumbent vice president is creating a situation we are not accustomed to, and not really represented on the chart.
Here is the 30-year seasonality calendar for October.
Chart provided courtesy of www.sentimentrader.com
We'll get the September Jobs Report on Friday. Estimates are looking for a gain of 120K to 135K jobs. The unemployment rate is expected to remain at 4.2%. Today we'll get the JOLTS job openings report, and the ISM manufacturing data.
Admin Note: In the coming weeks we may be working on a server and software upgrade that could disrupt the website periodically. It's something I am not looking forward to, but I've procrastinated long enough and it's time to get it done. The maintenance could take part or all of the website down at times, but it will not impact Premium Service email and text alerts. I'll keep you posted.
The S&P 500 (C-fund) had its highest close of the year again yesterday, but it wasn't an easy road as it had a Fed triggered false breakdown from the narrow F-flag in blue, before bouncing back to close at the highs of the day. There's still some overhead resistance, but that resistance is rising every day.
The DWCPF (S-fund) was up slightly but the consolidation continued for a 7th straight day since the post Fed rally to new 2024 highs a couple of weeks ago. The gaps below remain open, and overhead resistance is holding, but it's trying to build strength with this sideways action.
The EFA was down 0.33% The "ex USA ex China ex Hong Kong Index" was down 1.44%, so again the I-fund may be somewhere between the two. ACWX, which is my new "test" I-fund ETF, was down 0.59% yesterday, so we'll see which comes closest. You can see the final daily price and return posted on our site each evening.
We're still in limbo while the TSP transforms to the new components so we've been guessing at the return before the TSP posts the price is a little tough a the moment. Here's more information from tsp.gov.
BND (F-fund) cane down again to retest that 20-dy EMA. The red descending line that was broken on Friday, held as support on Monday.
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.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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[TD="width: 311, align: center"] Daily TSP Funds Return
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[/TR]
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We got some late day end of quarter shenanigans as money managers padded their quarterly reports with some late buying yesterday, putting an exclamation mark on September's comeback, ending the month with decent gain considering the negative seasonal expectations heading into the month.
The strong month was mostly thanks to an aggressive interest rate cut from the Fed in September, and the stimulus explosion that pushed China's stock market up like a rocket over the last week.
Now we start a new quarter with the wind still at the back of the market as Fed liquidity will pick up this month in addition to their lower interest rates. Add a little political incentive as DC tries anything to keep Trump from getting in office again, and the economic picture will be spit shined cleaned. They may prove me wrong with a poor jobs report this Friday, but I wouldn't count on it.
We will get a couple of important economic reports this morning, but the imminent issue of the day is going to be whether the largest longshoremen’s union in North America was going to begin striking after midnight last night if a new contract was not reached with ports management. It could be a big deal. You may know by the time you read this, and perhaps they will get the government involved here to prevent any major supply chain issues.
The 10-year Yield was up and closed above 3.8% for the first time since September 1st. As I mentioned the other day, a move above 3.8% to 3.9% could shake up the stock market and it's getting close.
The dollar was up sharply yesterday but is still lingering below some stubborn resistance.
Here's another look at the election year seasonality calendar where October is typically bad news for the stock market. September bucked that trend, and perhaps with no incumbent, but rather a one time president going against the incumbent vice president is creating a situation we are not accustomed to, and not really represented on the chart.
Here is the 30-year seasonality calendar for October.
Chart provided courtesy of www.sentimentrader.com
We'll get the September Jobs Report on Friday. Estimates are looking for a gain of 120K to 135K jobs. The unemployment rate is expected to remain at 4.2%. Today we'll get the JOLTS job openings report, and the ISM manufacturing data.
Admin Note: In the coming weeks we may be working on a server and software upgrade that could disrupt the website periodically. It's something I am not looking forward to, but I've procrastinated long enough and it's time to get it done. The maintenance could take part or all of the website down at times, but it will not impact Premium Service email and text alerts. I'll keep you posted.
The S&P 500 (C-fund) had its highest close of the year again yesterday, but it wasn't an easy road as it had a Fed triggered false breakdown from the narrow F-flag in blue, before bouncing back to close at the highs of the day. There's still some overhead resistance, but that resistance is rising every day.
The DWCPF (S-fund) was up slightly but the consolidation continued for a 7th straight day since the post Fed rally to new 2024 highs a couple of weeks ago. The gaps below remain open, and overhead resistance is holding, but it's trying to build strength with this sideways action.
The EFA was down 0.33% The "ex USA ex China ex Hong Kong Index" was down 1.44%, so again the I-fund may be somewhere between the two. ACWX, which is my new "test" I-fund ETF, was down 0.59% yesterday, so we'll see which comes closest. You can see the final daily price and return posted on our site each evening.
We're still in limbo while the TSP transforms to the new components so we've been guessing at the return before the TSP posts the price is a little tough a the moment. Here's more information from tsp.gov.
BND (F-fund) cane down again to retest that 20-dy EMA. The red descending line that was broken on Friday, held as support on Monday.
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.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.
