Yesterday was another lackluster session on the surface, but there was lots of drama behind the scenes. Oil continues to surge in anticipation of an Israeli retaliatory move against Iran, and the China trade took a break.

Market breadth was bearish except for up to down volume on the NASDAQ Composite.

Looking For Juice

The biggest individual movers were mainly attached to the oil component of the Artificial Intelligence (AI) electricity crisis theme. In addition, Constellation Energy Corp (CEG) fetched a massive target upgrade before the start of trading. We learned that the race for nuclear power is real, as Google (GOOGL) is officially in the race for extra juice.

Jobs Day

Is it me, or are these job days coming around faster? There is a lot of anticipation this morning, as the consensus is that 150,000 jobs were created in September, but whisper numbers are much higher, as various metrics see the tally as high as 225,000. This has become a farce. Today’s number will be revised several times, but we will still move the market based on this morning's face value.

AI isn’t a significant factor today, but it is casting a considerable shadow. Yesterday evening, it broke that the dockworker strike was suspended, pending a deal that will see a 62% pay raise, but no word on the future role of automation. Interestingly, the Challenger, Gray & Christmas Job Cuts report saw 120 warehouse workers lose their jobs to AI.  It's happening.

Today’s Session

Let's call it the “October Surprise.”  

The stronger-than-expected jobs report should have been expected, and so should an avalanche of downward revisions.  But as I have been stating, the data moves markets, and in this case, good news is good news for the soft landing for which we all root.

The Federal Reserve will still cut by 25 bps in part because Powell is also skeptical of today’s jobs report based on the way he answered the first question at the last FOMC question and answer period.

Ironically, the stock market would have soared on a “bad” number as well because it would have meant an even larger rate cut. The bottom line is the fix is in, and it is what I tell everyone I meet on the street, in elevators, in movie theaters, or anywhere I’m asked.

We’ll have greater details on the report in the note and Payne’s Perspective on Monday.