It was the 44^th new high for 2024, and Ryan Detrick at Carson Group is modeling for 57 new highs by the end of the year.

Market Breadth

The move, however, came with little fanfare. Market breadth was even across the board for the NASDAQ Composite but decidedly bullish on the New York Stock Exchange (NYSE). Overall, the volume was incredibly light.

Market Breadth	NYSE	NASDAQ
Advancers	1,611	2,094
Decliners	1,179	2,099
New Highs	159	168
New Lows	28	137
Up Volume	1.90 billion	2.52 billion
Down Volume	1.01 billion	2.13 billion

Breaking Out but Not All Boxes Checked

After breaking out to a record high last month, I waited for the S&P 500 to return and retest that old resistance point. That would have been a classic charting setup that would have added more credence to the next leg higher (assuming it held).

I'm not sure that a retest will happen now, but it could be because this liftoff is missing more substantial volume (see circle), more robust money flow, and a quicker Rate of Change (ROC).

Still, there is an old saying about not fighting the tape, and I won’t.

Did Powell Strongarm the FOMC Crew?

Reading between the lines of the past couple of Federal Open Market Committee (FOMC) statements, it seems clear Powell wanted to cut rates in July but let everyone know he’d hold off. Still, if he wished to cut 50-basis points (bps) in September, he didn’t resist.

It may be moot, as the market has only baked in five 25bps cuts over the next twelve months, down from ten a week ago.

CPI Could Alter the Narrative

The Consumer Price Index (CPI) report is out this morning, and maybe the bond market knows something the stock market is ignoring – inflation isn’t dead. Bond yields have been on a tear, and there is no doubt that closing above 4.10% would be a huge red flag for inflation.

I’m watching for used cars and Owners' Equivalent Rent (OER) in the CPI report.

Check Out My Townhall Special Today

Today’s Session

Dual Pain

Chair Powell might need a couple of Excedrin tension headache pills today. The Fed’s dual mandate is taking a dual hit as jobs data was worse than expected and inflation read came stronger than expected. They both are moving in the wrong direction.

Inflation

Headline inflation growth eased to 2.4% from 2.5%, while core turned up to 3.3% from 3.2%.  The Street was looking for more favorable numbers.

Labor Market

The spike in initial jobless claims says it all. I continue to say we are in a labor crisis, masked by specious government data and a financial media that is not objectively telling the story.

Markets are taking the news in stride, which is encouraging and scary at the same time.

Comments

With Greed and global uncertainty staring me in the face it's clear to me that inflation has not gone away, nor will it in the next 18-24 months. Paul K on 10/10/2024 11:01:13 AM

Stagflation coming soon at an economy near you. Mark on 10/10/2024 1:33:27 PM

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