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“Fear incites human action far more urgently than does the impressive weight of historical evidence.” – Jeremy Siegel
So much for the ‘million job print’. While economists were expecting to see a print of one million jobs, the actual print was barely even a quarter-million at 266K. Not only that but last month’s print was revised lower by nearly 150K. In reaction, the 10-year yield has plummeted below 1.5% and Nasdaq futures are surging up nearly 200. These reactions may be a little bit too much of a knee-jerk, so we’ll see how things play out as the day goes on.
Read today’s Morning Lineup for a recap of all the major market news and events including a recap of overnight earnings reports and economic data as well as the latest US and international COVID trends including our vaccination trackers (which continue to show a significant deceleration in vaccine uptake), and much more.
Just when it looked like things were going to start getting ugly for the Nasdaq yesterday morning, it not only stabilized but reversed higher to finish the day in positive territory. It was the first time since late March that the Nasdaq was down over 1% intraday but finished the day higher. It’s always tempting to try and read into these types of moves and see them as a significant event. The reality, though, is that they are too common to be considered all that significant. In the last year alone, there have been 16 other times where the Nasdaq was down over 1% intraday but finished the day higher, and in the last ten years, it’s happened more than 60 times.
Looking back at prior occurrences over the last year and ten years, the frequency of positive returns over the next week (~62%) for the Nasdaq is just as common following these occurrences as it is for all one-week periods over the same time period. That being said, while the frequency of positive returns is similar, the magnitude of the Nasdaq’s median move following these reversals is moderately higher (1.1% vs 0.55%).