Posts

Time to Buy Cyclicals?

What’s in Today’s Report:

  • Time to Buy Cyclicals?
  • Do I Believe in the Breakout?  (No)
  • EIA & Oil Market Update
  • Abbreviated Jobs Report Preview

Futures are marginally higher mostly on momentum from yesterday’s rally, although a small reserve rate cut in China is also helping global stocks rally.

Economic data continued to underwhelm, as Japanese Household Spending (0.8% vs. (E) 1.0%) and German Industrial Production (-0.6% vs. (E) 0.4%) both missed estimates.

Today focus will be on two key events, the Jobs Report (E:  Jobs: 160K, Unemployment: 3.7%, Wages: 0.3%) and a speech by Fed Chair Powell (12:30 p.m. ET).  Short term momentum in the markets is clearly higher right now, so to extend this week’s rally, both events just need to be “Goldilocks” in so much as the job number hits our “Just Right” range, while Powell simply leaves the door open to more accommodation in September, and beyond.