Bonds, Tesla and Nvidia Keep the Mood Upbeat Ahead of Friday's Jobs Report
As the market struggles with whether a slowing economy is good or bad, earnings season will soon be upon us with big reports indicating where we may be heading.
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The market saw classic "holiday" trading on the day before the Fourth of July celebration. It was just a half-day session, but the action was very upbeat, with names such as Tesla TSLA and Nvidia NVDA leading and driving the S&P 500 and Nasdaq 100 QQQ to new all-time highs. News that Nancy Pelosi added to her position in Nvidia helped the bullish cause.
Under the surface, things were not relatively as buoyant. The DJIA lost ground, and the Russell 2000 IWM gave back intraday gains. Breadth was more than two-to-one positive, but the big news was that new 12-month highs jumped sharply to over 625 names.
A jump in bonds helped equities. Interest rates fell on some weak employment news and increased belief that a Fed rate cut could come as early as September. The June jobs report will be delivered on Friday morning after the holiday, which could help keep things running if the numbers are weak.
Bonds have been increasingly volatile of late as the market struggles with the issue of whether a slowing economy is good because it is anti-inflationary or bad because it means more unemployment and slower sales.
Expectations for earnings season will start heating up quickly, and the response to the big reports will give us insight into where the market may be heading. I’m still waiting for greater rotational action, but it has been messy and random so far, driving many traders to the sidelines.
Enjoy the holiday. I will see you on Friday.
At the time of publication, Rev Shark had no positions in any securities mentioned.
