In today's episode, Tyler breaks down this morning's economic news and its impact on our market. While our major indexes tried to rally throughout the day, only the Dow Jones finished positive. All eyes are now on Friday's jobs data. Lastly, Tyler covers the latest sector performance and provides an update from the VRA Commodity Watch. Tune into today's podcast to learn more.

Dont look back because the market is closed. Good Wednesday afternoon, everyone. Tyler Herriage here with you for todays VRA investing podcast. Hope you all had a great day out there today. We started out today a little bit mixed for our markets today, and we finished similarly here with just one out of our four major indexes higher on the day, but certainly a much better day than the 2% down day that we saw yesterday, which I believe was only the third 2% down day of the year. You know, never good to see a day like that, but good to see a little bit of a bounce back today. And doesn’t mean our markets didn’t try to rally today. At one point today, all of our major indexes were higher today.

We were unable to hold onto those gains, though. But the, I hesitate to say the exact reason for that move, but at least a part of it was an interesting occurrence this morning as we got back the latest jolts data, which is the job openings and labor turnover data. The results we got from this reading were a little bit of a bad news is now good news for our markets, which if you can start to see a trend of that happening, you just don’t want to see good news and the market reacting poorly to it. That’s not what you want to see, much rather see the market reacting favorably to bad news. And it’s tough to say that that isn’t what we got today as this jolts data came in weaker than expected, well below expectations here. Expectations for 8.1 million. We came in at 7.6.

[00:01:57]:
You know, another miss here on jobs data from the BLS and similar to what we’ve seen from the BLS’s jobs reports is revisions here. That is the real story is the previous month’s data was revised lower as well from 8.18 to 7.91. That is just really poor data, I guess, that we’re getting from the BLS. No surprises. If you’re a regular listener here, we talk about this here often. You know, it gives a little bit of COVID for the administration. I mean, think about what we just saw over the last year where they revised jobs data lower by, I mean, some, by some metrics, a million jobs. Basically, we were just lied to about a million jobs being created.

That’s what we’re getting from the BLS in this day and age. But what we saw from the reaction, and that’s what matters for our markets. It’s not the news that matters. It’s the market’s reaction to the news here. And shortly after that data came out of our major indexes again turned positive there we were unable to hold onto those gains, but bond prices did hold on to their gains as yields continued their move lower today, down nearly 2% on the ten year yield at a 3.76. Now getting back close here to its recent lows from early August at a 3.66. And really these are some of the lowest readings we’ve seen so far in the ten year. So going forward, this puts even more emphasis on Friday’s jobs data.

Now, one month doesn’t make a trend, but if we did get a repeat of last month’s week jobs data, we would expect the odds of a 50 basis point cut from the Fed at their September 18 meeting to rise significantly here. But it’s kind of a win win scenario here. After all of these revisions that we’ve seen, not a whole lot of people trust this data, and rightfully so, right? So if we get a hot number, first of all, very few people are going to believe it and our markets will likely head higher. If it’s another miss, then the expectations of 50 basis point cut will rise significantly, which the market should like. And we saw more of the probability towards the 50 basis point cut today. It’s now nearly even according to the CME’s Fedwatch tool, which keep in mind is just a tool. You know, we don’t put too much stake into it here, but we like to report on it. We’re now nearly even with a 55% probability of a 25 basis point cut and a 45% probability of a 50 basis point cut.

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Just a month ago, or excuse me, just a week ago it was 62% in favor of 25 and 38 in favor of 50. So you can see these are narrowing here. And if we get a weak jobs number on Friday, then we’ll likely get more favorability towards the 50 basis point cut. That’s what we’ve been talking about here for a long time. The Fed has been overly restrictive here and they need to make a major move. And we got more dovish talk out of Fed speakers today. I believe it was Rafael Bostic who said essentially that the Fed is offsides here and needs to cut rates aggressively. So just like we’ve talked about over the last month, expect the Fed to roll out these dovish speakers after the Jackson hole meeting after Jay Powell gave the all clear to do so.

And that’s what we’ve seen so far. So, you know, stay tuned. We’ll be reporting on the jobs data Friday as well. But one thing that we have seen along with this action, and again, the 2% down day yesterday is that sentiment has started to take a hit. Interestingly, yesterday, despite the big down day, the fear and greed index actually rose. We started the day at a 63, finished at a 65, but today the pullback finally took place. Plunged today down from that 65 to now a 53, which is neutral territory here for the fear and greed index. It’ll be interesting to see where the AAII investor sentiment survey comes in.

That data will come out tomorrow. But what was also interesting today that we didn’t see yesterday either, was an increase in the put call ratio. Now, I won’t say that it was crazy high or anything, but we did spend most of the day above a one with a high reading of a 1.07. So again, not excessively bearish, but anything above a 0.7 is seen as bearish. Anything above a one is leaning towards that excessively bearish side. You know, if we were to start to get some readings of a 1.151.2, even a 1.3, that’s the sign of a bottom that needs to be bought. We’re not quite there yet, but we do remain extremely bullish on this market. And I’ll go ahead and jump ahead a little bit here that, you know, our major indexes have had this, this shakeout here that took place in August, or, excuse me, the end of July and into early August.

[00:07:38]:
And we do think that those lows will hold for the year. And any pullbacks between now and then need to be continued to be looked at as a buy the dip opportunity. That’s how we’re looking at it here. And quickly, we have moved into nearly oversold levels for tech, which is an area where we would really be looking to buy the dip. So let’s go ahead and jump in to, to our market action here. We were led today by our one positive major index, the Dow Jones, up just slightly, 0.09% to 40,974. But I gotta point out, we were led by the transports. And that’s what you want to see from the Dow.

The transports up nearly four tenths of 1%. After that, some red on the screen here. The S P, down .16% to 5520. Small caps also down just under two tenths of 1% to 21 45. And lastly here, the Nasdaq, down three tenths of 1% to 17,084. And I have to point out here as well, that we are again very close to oversold levels for both tech and the semis here. So, yes, again, could there be a little bit more pain ahead? Sure, but we think it would be short lived. And again, another buy the dip opportunity.

But I got to point out the semiconductors managed to finish positive on the day. Now that is talking about Sox. That is the semiconductor index versus SMH, the semiconductor ETF, which did finish lower on the day, but Sox finishing up. Let’s just get a quick refresh on my screens here. Finished up a quarter of 1% on the day. So technically, semis leading the way here, which is exactly what you want to see. I’m sure that that has something to do with the weightings in Sox versus SMH, but again, we like to see that here. Sox bouncing off of its 200 day moving average.

[00:09:48]:
We want to see those levels hold going forward. And some news broke just before the close that the, the subpoena that Kip talked about yesterday with Nvidia. Nvidia is saying that they didn’t receive a subpoena that was reported by Jim Cramer. So take, take what you will from that, it was interesting to see the stock didn’t quite rally because they reported that just before the close, the stock didn’t quite rally back to positive. It was higher earlier in the session, up just a fraction of a percent in after hours now. So we’ll see how that story plays out from here. Next up, looking at our internals on the day to day, much like yesterday, better numbers than you might expect for a day with three out of our four major indexes lower on the day. We had advancing stocks beating out declining stocks on the NYSE.

Kind of a narrow beat there, but hey, we’ll take it. Slightly negative, though on the Nasdaq. Similar story from 52 week highs to lows coming in nicely. Positive on the NYSE, nearly four to one positive there, but did come in slightly negative on the Nasdaq, but no crazy big beat here or anything. Then volume, the reverse of our other two indicators, coming in slightly negative on the NYSE, but did manage to come in positive on the Nasdaq. So mixed day overall, but certainly not bad numbers here. Next up, looking at our sectors on the day to day, our leader, if you saw yields down, this won’t surprise you. Utilities, they are the biggest borrowers in the nation, so they are affected heavily by yields.

XLU, the utility ETF for the S and P 500 led today and hit an all time high. Next up, consumer staples, also an all time high. And lastly, real estate, excuse me, real estate here. Also hitting an all time high today. Now, as we report often we prefer to look at the home builders as opposed to the real estate sector because it’s mostly made up of reits. We did finish slightly lower for the home builders here, though, on the day. Then for our laggards on the day, energy led the way lower. You’ll see why here in just a second when I get to our VRA commodity watch, followed by materials and tech.

[00:12:12]:
All right, so for our VRA commodity watch, mixed day here as well. Gold now higher on the day by 0.15% to 25 26. Silver up bigger, 0.85% to $28.58 an ounce. Copper essentially flat on the day. Now 0.08% to $4.08 a pound. And then I oil hitting its lowest levels of 2024 today on a price per barrel down, let’s see here, 1.88% now to $69 a barrel. Certainly been some interesting action in oil lately. And lastly here for today, bitcoin now essentially flat on the day, was down lower.

Got to go down to 55,700 earlier in the session. Now back up, still down about a quarter of 1% at $58,066 of bitcoin. Folks, that is all that we have time for here today. Please be sure to subscribe to receive our VrA podcast every day at the market close. You can sign up@vraletter.com click the podcast link at the top and we’d love to have you with us. Thanks again for tuning in. Until next time, we’ll see you back here tomorrow for the close.