JOLTs instance "hard" converging towards improving "soft" data. At this pace, Fed gets 1.0 openings/worker ratio by Oct/Nov. Nasdaq 100 became "100% bid". Since 1996, 6 of 6 times, saw further gains.

After a tumultuous decline in the final weeks of September, market technicals were awful and sentiment and positioning bearish. But in each of the past two days, equities rallied strongly, adding >5% to all the major indices.

  • the ostensible fundamental catalyst has been the signs that the labor market is softening, but not necessarily in a way that spells recession
  • on Tuesday, the JOLTS (job openings) report showed the largest ever drop in job openings (ex-pandemic) with a 1.1 million or 10% drop
  • this brought the key (watched by Fed) openings/worker ratio to 1.67 from 1.97, or -0.30 in a single month
  • at this pace, the jobs market will fall to 1.0 by October/November. JOLTS has a severe 6 week lag
  • on Monday, the ISM manufacturing report showed a sharp drop in both the employment and prices component
  • Why is this positive? This is one of the 3 key things the Fed is looking for (other two are slower GDP and slower inflation).
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Is there a reason to believe this is more than a "bear market rally"?

Given the generally poor win-ratio for rallies in 2022, investors are naturally viewing the gains over the past two days as just another "bear market rally." But there are a few factors to consider and these could argue investors should respect these gai...

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