A Telling Two Weeks to Come!

The next two weeks will be telling for equity market price action going forward.

This Week's Message: Concerned (Near-Term) About Complacency (video)

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This Morning's Log Entry

The April jobs number was just released and it was definitely good: 263k new jobs (vs 190k expected), 3.6% unemployment rate (down .2% from March) and 3.2% average hourly earnings growth (same as March). However, average hours worked and the labor force participation both legged just a bit lower.

This Morning's Log Entry

The Fed, per yesterday’s post-meeting commentary, shares our view on the state of general conditions. Powell’s comments regarding the present lack of inflation (transient), despite doing a bit of a number on stock prices (as I hinted it might in yesterday’s entry), were, all things considered, right on the money. That said, this morning’s strong productivity report suggests that there’s possibly room for certain pressures to run (notably) before we see above-Fed target (2%) inflation.

Quick Comment on Today's Action

The Fed left rates unchanged and, in their official statement, along with Powell at the presser, gave an overall upbeat assessment of general conditions. Powell stated that, in the committee’s view, the lower than expected inflation of late is transient and will likely not persist for too long going forward. I entirely agree.

Data of the Day: ISM Survey Speaks To What Most Concerns Me At The Moment

In this morning's log entry I noted that data this week has been "net positive". Well, the exceedingly important ISM (Institute for Supply Management) Manufacturing Survey results were released this morning, and they lower that net (relative to expectations) number just a bit.

This Morning's Log Entry: The Fed Announcement Today Will Be Telling

The week so far has seen no letup in this earnings season’s high percentage of bottom-line beats (relative to lowered expectations). Even top-line numbers, which have been relatively disappointing in terms of % beats, have shown a notable pickup in that category over the past few days.