- The S&P 500 showed resilience despite the stronger-than-anticipated employment figures in America, indicating that Wall Street is more focused on the possibility of avoiding a recession than the Federal Reserve staying tight for longer.
- The jobs number should have the Federal Reserve sticking with its quantitative tightening policy, which is not something that Wall Street likes.
However, there is a new narrative being kicked around Wall Street that the Federal Reserve won't be able to stop bullish sentiment and the bullish market. This is what the market is showing, and there seems to be no arguing with it. The stock market is also celebrating the fact that Apple had a decent earnings report overnight, which is 7% of the S&P 500 weighting.
Ultimately, this is a market that seems to be doing everything it can to break out, with the highs of the week serving as a nice target to break above. If the market does so, it is likely to go looking for another 100 points. On the downside, the 200-Day EMA and the 4000 level both could offer significant support. This market appears to be doing everything it can to go higher over the longer term, and despite the somewhat ugly week, the recovery on Friday provides a positive outlook.
The Market is Doing Everything it Can to Break Out
The market is likely to remain choppy, and investors need to look at it from a short-term perspective. The summer is typically a range-bound part of the year, and the lack of traction or fear out there to get the market to sell off drastically probably lends itself to more range-bound trading ahead. Furthermore, the summer tends to be somewhat lackluster, so this could come into play as well.
At the end of the day, the S&P 500 has shown resilience despite the strong employment figures in America, indicating that Wall Street is more focused on the possibility of avoiding a recession than the Federal Reserve staying tight for longer. The market is doing everything it can to break out, with the highs of the week serving as a nice target to break above. On the downside, the 200-Day EMA and the 4000 level both could offer significant support. Investors need to look at this market from a short-term perspective, as it is likely to remain choppy.
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