![]() Interestingly, last week’s rally in large cap stocks came despite bond yields rising for the fifth straight week. Without the inflationary feedback loop of higher wage growth leading to ever-higher prices, inflation is more likely to be brought under control in the coming months. Whatever the headline CPI number we get this Thursday, if wage growth stays low it could effectively take the 1970s stagflation scenario off the table. The monthly wage growth of 0.2% came in below expectations and hinted at a possible lessening of inflation pressures. Friday’s unexpectedly strong NFP jobs report suggested that the economy may well be able to avoid a recession without necessarily stoking more inflation. The late week bounce also closely coincided with Friday’s bullish alignment of the Sun, Moon and Jupiter.Īfter last week’s recovery, the market is showing signs of accepting higher inflation even if it means living with the Fed funds rate above 5% well into next year. ![]() This mostly bullish outcome was somewhat unexpected, although the intraweek lower lows fulfilled the bearish influence of the Mars-Ketu-Neptune alignment. The broader markets were weaker, however, as the Russell 2000, the Dow and the NYSE Composite were all lower on the week. Despite falling to new lows early in the week, the S&P 500 gained a half of one percent on the week to 4308 while the Nasdaq-100 gained almost 2%. ![]() (8 October 2023) US stocks rebounded last week as Friday’s strong jobs report provided more evidence for a soft landing in the face of ongoing inflation risks. ![]()
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