October 4, 2021
Good morning,
Friday’s 1% gain in the S&P 500 wasn’t a bad way to start the quarter. However, the market is a forward looking beast with no memory, so what’s ahead? It’s payroll week and it is starting this morning with yields up slightly on the US-10yr at 1.47% (having settled down a little from 1.55% high last week) and Futures on the lower edge of unchanged off <10bps (2-3 S&P points). This Friday’s employment numbers for September will effectively be either an endorsement of a taper in a month’s time – or a shockingly poor employment report. You would think taper is largely priced in, so Friday may hold a positive surprise for stocks or be business as usual.
Following a tough month, U.S. and Global trend evidence still leans bullish as it has for quite a while now. Yes, there are some chinks in the armor that we’ve mentioned before – namely a very high number of new lows being made (bad breadth), and a moving average model that flashed a negative signal. But the process is a balance of evidence one, and at this point the probability of a Q4 rally is still greater than a trend change from a bull market.
Be well,
Mike
Robertson Stephens paid no fee to obtain recognition but has paid licensing fees to reference its appearances on the Newsweek, USA Today, and FA Magazine rankings lists. See Awards Disclosures
