Shorts-cover rally across the market
“Soft Landing” was the most talked-about phrase before the market opened today after employment data continued to rise strongly despite economic weakness in the industrial manufacturing sector. Indices generally pulled back slightly at the open under volatility pressure before the shorts-cover rally began to take effect with VIX plunging sharply throughout the morning, pulling SPY and QQQ through the important gamma flip levels at 420 and 350 with money flow concentrating in the energy sector after the gasoline and oil reserves report.
Investor sentiment has also improved quite clearly as the debt ceiling increase agreement passed the House, controlled by Republicans, and advances to the Senate, controlled by Democrats, where there is more support for the agreement.
Job market continues to defy economic pressure
ADP continues to report job growth exceeding expectations while average wage growth has begun to slow. Accordingly, the US added 278,000 workers compared to the forecasted +170,000:
Most jobs come from mining and construction, contrary to the industrial economic conditions survey:
Almost only large enterprises lost jobs in the past month:
Base wage growth slows, a good sign for inflation control efforts:
In addition, unemployment claims returned below expectations at 230,000 claims contrary to FED expectations after the recent rate hike:
Crude oil prices rise again after the Biden administration withdraws oil from SPR for the 9th consecutive week
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