Considering how much was made of the previous sessions mid -day slide, it was no surprise to see ES continuing its slide and almost entirely wipe out ISM gains. Some follow through was inevitable as Europe was coming off holidays with region soft eco’ #’s(inline) to help the late U.S day sour sentiment drag. The ADP# falling short of expectations didn’t help, but it was hardly a surprise considering how labor data has come in. Also, consensus for NFP# has declined to ~160K this week, although even a lower # might be the ‘real’ market expectation following ADP. The U.S PMI was a nice surprise ‘relief’ indicating the economy is not falling off a cliff, still an improvement sequentially in Initial claims/ NFP is what the market ‘longs’ really want.
As noted the previous 2 days, each sell-off and ‘market is falling apart at seams’ chatter had no merit here. Today’s dip to a low of SP1393 and close of 1402 continues to reinforce the premise . .” A little digestion of 3% uptick since Monday’s low is in order, but mentality should revert to buying the dips, which eventually would allow for SP 1400 to be reclaimed”. We do have the consecutive closes over SP1400, but it's not a done deal to say it's reclaimed to see new highs, just yet. Still, holding SP1293 is a positive.
Our Shadowlisted retail names continue to roll as Consumer links outperform broader market, fresh highs hit by LULU, PVH, VFC….. UA RL KORS FOSL not far away.
A ‘ Eurozone’ wildcard this week for upside risk exists if ECB meeting reveals an openness to rate cuts, Spain deal if done right.