August 8, 2022
Good morning,
Fed speakers spent the first four days of last week tying to push back against the market’s dovish interpretation of the recent rate hike. Friday’s blowout employment data for July finished the job for them. Fixed Income market participants reset their expectations back up to a +75-basis point rate hike at the next Fed meeting in September.
While a +528,000 jobs in July, more than twice any number in Bloomberg’s economists’ poll was shocking to say the least, the equity market’s ability to shrug it off by the end of its trading day may have been the surprise of the week. It seems that our rally, a bear market kind or not, can take a stiff punch without crumbling. It climbs back into the ring again for Wednesday’s CPI report, and of course meaningful tape resistance lies just ahead at the S&P 500 level of approximately 4200 (4145 was last week’s close).
Be well,
Mike