Without a surprise in the non-farm payroll numbers that could “disrupt the current disruption” caused by the FED and Trump, Wall Street went ahead with the continuation of the risk off mode started Wednesday. In fact, if there is something that could be interpreted from the job numbers is that the U.S economy is for now resilient, with a strong labour market where inflation got an uptick, given that wages grew more than anticipated to a 3.2% annual rate.
This means apart from the trade war topic, there is really no justification to an easing cycle, but more to occasional interventions, just like Powell referred. The question is how will investors react in the next few days, considering that there is an adjustment to expectations that is due and also that August is the second worst performing month for the Bulls, not to mention the probable recession in the earnings front, if companies cannot shake off the contraction that is (still) expected for this earnings season.
Photo by Banter Snaps.