November 7, 2022
Good morning,
The S&P 500 Index was down -3.35% last week, which was the first half of what I have called the current rally’s testing period. Recall the 4 events of the 2-week testing period: the Fed comments last Wednesday, Jobs data last Friday, the mid-term election tomorrow and CPI data on Thursday. The surprisingly hawkish comments from the Fed last week, set the market back by -4.6% through last Thursday’s market close. The test had “fail” written all over it after only one event. Friday’s employment numbers were a mixed bag and had something for bulls and bears. The market seemed to take the jobs data as a neutral event but got some help from rumors of the demise of China’s Covid-zero policy. I would suggest that the takeaway from the first week of testing is that our rally is on life-support but not dead.
Futures are up a smidge this morning (+.25%) which is a little surprising since it has had to shrug off the reiteration by China of its Covid-zero policy and crush the rumors that helped fuel Friday’s rally. Add to that some downward earnings revisions and some bad tech company-specific news (mostly layoffs), and there is every reason to expect the market to be lower this morning.
Let’s get past election day tomorrow – see you Wednesday morning.
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
