Last week provided an abundance of data to evaluate as to the future impact on the economy.
Last Friday the jobs report reflected much higher job gains than expected. Initially the indexes dropped on the thought that the Federal Reserve would interpret those numbers as inflationary.
A deeper dive reflected that most of the jobs were in the public sector, the unemployment rate remained at 3.8% and that wage gains were lower than one would expect.
Quickly the markets turned from an over 200-point loss to a 200-point gain on the Dow.
The S&P 500 stock index bounced off 4200, which is a technical level of concern.
That all came on top of the conflict in Israel and the removal of the Speaker of the House.
Not to forget about the lack of funding for Ukraine and news of Iran being implicated as assisting Hamas in attacking Israel.
This has created fears of rising energy prices.
While there seems to be little correlation with the conflict, but natural gas prices have moved to $3.35 per Mcf which won’t help consumers with their heating bills this winter.
None of this news will be lost on the Fed as to any impact on inflation.
With the next meeting convening in mid-November, there will be time for reflection.
Moreover, there will be other issues to be evaluated.
My thoughts on the reversal last Friday was that the market just was far too oversold.
It was much more of a technical bounce than anything fundamental.
Such moves seem almost surreal to many investors. Markets moving solely due an imbalance.
Can you say supply and demand?
This runs counter to the thought that markets are logical.
In fact they are, but it has way more to do with where the balance falls with buyers and sellers.
I still feel the last quarter will find strength but there will be major hurdles to jump over.
If there was ever a wall of worry, the next several months will provide all the climbing investors can stand.
Many will disagree but that is exactly what makes the sauce of buyers and sellers.
You need a balance which got out of hand last week.
Then again, pessimists will be looking for that Black Swan.
