The market is getting a dose of bad (weak) economic data today. In the past when inflation was higher, bad was good as traders saw it as a slowing of the economy and with it inflation.
WIth inflation more tame / lower, and the Fed more focused on both jobs AND inflation, the deluge of bad news today is not good. Too much of a bad thing is now bad.
As a result, stocks have moved into negative territory with the Dow Industrial Average is down -0.78%, the S&P index down -0.5%, and the NASDAQ index down -0.68%.
Looking at the NASDAQ index on the daily chart, the price moved above its 50 day moving average both yesterday and closed above it (at 17595.89). Today the price moved higher with high price extended to 17791.58. The price has since moved lower and is now back below that moving average trading at 17488 down -111.0 or -0.62% currently.
If the buyers are to take more control, getting and staying above the 50-day moving average is essential from a technical perspective. Absent that, a rotation back toward the 38.2% retracement of the move up from the May low is the next target at 17353.82.
Today bad is bad:
- Initial jobless claims. Highest level since June 2023. BAD.
- your labor costs +0.9% versus was 1.8% expected. Prior quarter revised lower to 3.8% from 4.0%. BAD
- Construction spending -0.3% versus +0.2%. Prior month revised lower to -0.4% from -0.1%. BAD.
- ISM manufacturing 46.8 versus 48.8 estimate. Last month 48.5. BAD
- Employment 43.4 versus 49.0. New orders 47.4 versus 49.3 last month. BAD.
Will the Fed wait too long to cut and blow the chance for a soft landing?
