{"id":70836,"date":"2024-10-06T23:21:22","date_gmt":"2024-10-07T06:21:22","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=70836"},"modified":"2024-10-06T23:28:44","modified_gmt":"2024-10-07T06:28:44","slug":"strong-jobs-report-shakes-lethargic-trading-the-market-breadth","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2024\/10\/06\/strong-jobs-report-shakes-lethargic-trading-the-market-breadth\/","title":{"rendered":"Strong Jobs Report Shakes Lethargic Trading – The Market Breadth"},"content":{"rendered":"\n

Stock Market Commentary<\/strong><\/h2>\n\n\n\n

A strong September jobs report<\/a> woke up the stock market from lethargic trading. The numbers handily beat expectations and reset expectations for future rate cuts<\/a> and economic growth. Surprisingly, the good news was not bad news; the market has typically been antsy about getting lower interest rates. Instead of fearing a longer path to rate cuts, the stock market celebrated with broad based gains. This awakening from lethargic trading sets up the stock market for an October rally absent a significant pullback.<\/p>\n\n\n\n

The maximum drawdown so far this month is 1.1% whereas the average maximum pullback is around 3%<\/a>. The market survived a lot of bad news converging into the beginning of October. Thus I cannot imagine what fresh catalyst gets the ball rolling for a seasonal pullback. Earnings season starts this week, but I cannot even remember the last time earnings results created a significant negative impact on the stock market as a whole.<\/p>\n\n\n\n

The currency market is moving in the stock market’s favor and even leaning against lethargic trading. The Japanese yen (FXY) continues to weaken as if traders are rushing right back into carry trades. My favorite forex indicator of market sentiment, AUD\/JPY<\/a>, has been in rally mode since mid-September. Last week AUD\/JPY broke out to a new 2+ month high. AUD\/JPY even quickly rebounded from a post-election pullback. Heavy fiscal and monetary stimulus from China is bound to help Australia as well. So I am now getting strong market cues from AUD\/JPY. <\/p>\n\n\n

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The Australian dollar vs Japanese yen (AUD\/JPY) is slowly breaking out to a 2+ month high.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n