Verizon to cut 15,000 jobs amid growing competition pressures - WSJ
The Dow is now up 5.8% for the trailing month, leading all the major indexes. It still trails the S&P and NASDAQ YTD, but has been a major beneficiary of the strong earnings season, and was not seen to have excess valuation. It is also a more conservative list of names, established companies with bulletproof balance sheets, good dividend rates, and should hold up well if the current labor concerns grow into real recession fears.
The government shutdown is expected to be resolved by the end of the week, possibly tonight when the House votes. Today, we’re seeing airline stocks trade up on the prospects. For investors and the Fed, a return of economic data will be a real relief, but it will take time. Expectations are that the Bureau of Labor Statistics will release a schedule of when to expect new reports, not the data, early next week.
There are several signs that a risk-off sentiment continues. Gold and silver continue to rise. Silver is a dollar away from the all-time high reached last month. Gold is pushing back to $4,200/oz. Copper has been moving higher all month and is forecast to have tight supplies for a few years. Crypto is lower again with Bitcoin down to $102.2K, still waiting for regulatory clarity. Conservative sectors such as consumer staples, healthcare, and financial services have been moving up as tech has softened.
While there seems to be growing concerns about labor, both weak hiring and high layoff data, we’re still not seeing much improvement on the bets for a December cut. Some market pundits are now forecasting that not only will the Fed cut, but it will cut 50 bps. If that happens, it may initially bring fears about the Fed seeing a recession in the cards, but it will be supportive of high P/Es and lead to fund flows out of money market accounts.
Momentum remains positive, but today is another example of how a good day must include participation by Mega Tech.