Author: jsc

According to the latest Zillow update, home sales in September fell -18% MoM with a sharp deceleration in activity at the end of the month when mortgage rates were at highest levels.  or equities since April/May.

The S&P 500 (SPX) has rallied ~4% off the lows through yesterday’s close, but the buyers are likely higher. There doesn’t seem to be a shortage of skepticism for the recent bounce, which keeps the pain trade skewed to the upside.

The near-term technical resistance hurdle for the S&P 500 remains 3690 with the index currently above that level intraday.

We discuss SPX outlook as equities rebound following improved UK sentiment.

The sharp reversal in equity markets follows details that reveal the elevated CPI print came largely from stickier components like Owner’s Equivalent Rent.

Consensus is looking for headline CPI to come in at +8.1%.  Anything north of +8.1% will likely weigh on the SPX with Tech underperforming.

Terminal rate expectations remain the key to market sentiment as markets react to the latest NY Fed Survey of Consumer Expectations where 1-year inflation expectations dropped another 30bp to 5.4% to its lowest level in a year.

Higher Eurozone yields combined with a closed US Treasury market weigh on equity sentiment ahead of resumed trading tomorrow and Thursday’s CPI print, bringing CPI scenarios in focus. 

Today’s Jobs Report came in mostly inline, reaffirming outlook. Non-farm payrolls were up +263,000 in September vs. consensus for +250,000.

Catalysts ahead include tomorrow’s Jobs Report and next Thursday’s CPI print. Markets are in a ‘bad news is good’ phase with today’s weaker labor data helping to calm markets ahead of tomorrow’s official BLS Jobs Report.