Reply To: Traders Market Weekly: Jobs, Inflation and PMI Pressures


Moving the Market

— Disinflation in July PCE Price Index

— Fed Chair Powell’s speech at Jackson Hole

— Rising Treasury yields

The mega caps are weighing on index performance with the Vanguard Mega Cap Growth ETF (MGK) down 2.5% versus a 1.9% loss in the Invesco S&P 500 Equal Weight ETF (RSP) and the S&P 500.

The S&P 500 communication services (-2.9%), information technology (-2.5%), and consumer discretionary (-2.5%) sectors are the worst performers thanks to their mega cap components.

Separately, the 10-yr note yield is off its high of the day, unchanged at 3.03%. The 2-yr note yield, on the other hand, is near its high of the day, up four basis points to 3.42%

The advance-decline line shows decliners outpacing advancers by a 5-to-1 margin at the NYSE and a greater than 3-to-1 margin at the Nasdaq.

The stock market has been volatile since Fed Chair Powell’s speech. There was a knee-jerk sell off, followed by a bounce and then another sell off.

The speech itself left an impression that the Fed is not entertaining the notion of a pivot to a rate-cut cycle anytime soon. Notably, Mr. Powell acknowledged that efforts to reduce inflation “will also bring some pain to households and businesses” but that failing to restore price stability would mean far greater pain.