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“Once you consent to some concession, you can never cancel it and put things back the way they are.” – Howard Hughes

Morning stock market summary

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Stocks are poised to trade higher for the fourth day in a row this morning continuing the positive momentum from yesterday’s trading and a strong session in Europe. Movement in the fixed-income space is also helping as the 10-year yield drops below 4.70%.  There’s still a lot of economic data to get through today, and after what has already been a busy day of earnings, there’s still a ton of reports after the close including the biggest of them all – Apple (AAPL) – after the close today. On the economic calendar, we just got a slug of data.  Non-farm productivity came in higher than expected, Unit Labor Costs were lower than expected, and both initial and continuing jobless claims were higher than expected.

We’ve all become painfully aware of the typical “Powell Pattern” on Fed days where the S&P 500 finishes near its lows of the day following an afternoon swoon that seems to always take place right after the Fed President starts speaking.  Yesterday, the S&P 500 went in the opposite direction as the Powell pattern was completely reversed.

When the closing bell rang yesterday, the S&P 500 tracking ETF (SPY) was up 1.07% making it the best Fed Day since July 2022 when SPY rallied 2.60%.  In the nine meetings between yesterday and July 2022, SPY declined an average of 0.78% on Fed days and was only up three times.

The fact that the market finished higher on a Fed Day yesterday was surprising enough.  Even more impressive though was the fact that it finished near its highs for the day.  When the closing bell rang, SPY was down 0.2% from its intraday high.  That was the closest it finished to an intraday high since the May 2022 meeting, and in the eleven meetings between yesterday and May 2022, SPY’s average close relative to the intraday high was a decline of 1.5%. Did Powell get up on the right side of the bed yesterday?

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