- Moving the markets
The S&P 500 bounced back from a three-day slump and closed higher on Thursday, as investors awaited the crucial jobs report on Friday. Google-parent Alphabet led the gains with a 5% jump, thanks to its new Gemini AI model that promises to revolutionize search and advertising. Chipmakers Nvidia and AMD also rose by 1% and 5%, respectively, as demand for their products remained strong.
The jobs report is the main event of the week, as it will reveal the health of the labor market amid mixed signals from other data. On Thursday, the weekly jobless claims came in lower than expected and the continuing claims dropped, suggesting that fewer people are losing their jobs. However, this also raised concerns about inflation and the Fed’s tapering plans, pushing the 10-year treasury yield higher.
Investors are hoping for a Goldilocks scenario on Friday, where the jobs report shows a moderate increase in hiring, but not too strong to spook the Fed. Economists forecast that 190,000 jobs were added in November, up from 128,000 in October. A weaker number could ease the pressure on the Fed to hike interest rates sooner, while a stronger number could dampen the market mood.
Meanwhile, the currency market saw some wild swings on Thursday, starting with the Bank of Japan’s hawkish comments that sent the yen soaring against the dollar. The USDJPY pair plunged and briefly flash crashed, as this chart shows. It recovered some of its losses, but still ended the day lower. The Swiss franc also surged to new highs, while the dollar index fell to its lowest level in three weeks.
Other markets were more subdued, with bond yields mixed, gold flat, and oil prices slightly higher. Oil snapped a five-day losing streak but failed to reclaim the $70 mark.
The bright spot of the day was the mortgage market, where rates fell for the sixth consecutive week and hit their lowest level since August.
How long will this last?
2. Current “Buy” Cycles (effective 11/21/2023)
Our Trend Tracking Indexes (TTIs) have both crossed their trend lines with enough strength to trigger new “Buy” signals. That means, Tuesday, 11/21/2023, was the official date for these signals.
If you want to follow our strategy, you should first decide how much you want to invest based on your risk tolerance (percentage of allocation). Then, you should check my Thursday StatSheet and Saturday’s “ETFs on the Cutline” report for suitable ETFs to buy.
3. Trend Tracking Indexes (TTIs)
The stock market rose steadily throughout the day, even though the values of different currencies fluctuated a lot.
Our Trend Tracking Indexes (TTIs) also increased and stayed above their trend lines, indicating a continued bullish environment.
This is how we closed 12/07/2023:
Domestic TTI: +4.06% above its M/A (prior close +3.54%)—Buy signal effective 11/21/2023.
International TTI: +4.47% above its M/A (prior close +4.15%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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