Neuralink implants are almost needed to interpret Friday's Jobs number, as it was not exactly tremendously impressive, as superficially presented. For sure the easy-take would be that it puts Fed policy upside down with growing jobs and economic prosperity. Hey hang-on; could there be political spin to it?

I wish the data was as not distorted; but that's also why average hourly wage data was noted by some; and I'll note the 'seasonal adjustment' factors, that suggest something more like 2.5 million 'fewer' jobs (I'm not an economist of course; but some of the data smacks of excess optimism to say the least.. )

I'm just saying - from a constructive or bullish perspective - that the 'real' Jobs overview isn't nearly quite so dramatic as the official BLS report; but close to the ADP report a day earlier. Hence this is not a 'boom amidst recession' so many were looking for, or such divergences from trend. It plays to the White House spin doctors (and I wish they were right for the sake of working Americans); not to the Fed or a market that wants a friendlier monetary policy environment going forward.

The overall trend is slow recovery with a bit of a dip; and perhaps that why a majority of stocks were off Friday midday, while cap-weighted Indexes rose.

Market X-ray: inflation is dropping (not quite like a rock); Jobs are okay but not great such as reported; and a rate-cut matters; more to the bond market than stocks. Now you have the Fed (or White House?) trying to manage business cycles, which actually is slowly growing as outlined all along.

There is not a lot of wage pressure (part-time remote workers part of this); at the same time this is the overall 'softish landing' talked of for many months. It may be that time for capital inflows has seasonally cooled-off; especially for a few of the major tech mega-caps. S&P 5000 is a target and could be sort of a short-term top. Meanwhile the FOMCO mega-cap thrust extends itself.

S&P 5000 is a target and could be sort of a short-term top. Given mega-cap performance in the year thus far, I suspect higher numbers later in the year; at the same time smaller-cap non-participants have potential especially as a realistic Fed gets friendlier a couple months ahead.

That is a reason why the Jobs emphasis is political; it's not accurate; and it's a bearish argument to keep the Fed tighter; though you won't hear such an interpretation espoused by many of Washington's leaders on Sunday shows. I do think there is still risk here related to 'commercial property' or banks that are too heavy in that sector; but again we're fine if they can avoid problems (I doubt that in a way given delinquencies and so on with commercial lending).

So yes there's room for allocations to increase; but that's not the key. Mostly it might be 'if' money managers gradually 'trim' mega-cap gains (retaining the core holdings of course), and funnel some funds into innovative disruptive or typically small-cap stocks. Mostly money flows in-and-out of mega-caps given the market will take the volume; not because investors are really enthused.

A lot of this has been rally-chasing; and the market 'must' broaden if there's a bullish case to be made for later in the year and beyond. That's where a Fed responding to reality, not to politically-spun uber-optimism on the economy is going to play a role. What's priced-into the market is a question for those who are too bullish for the S&P; which can only markedly improve from here over 5000 near-term if broadening-out occurs. My bias at the moment is shakeout a bit and then see a comeback, but with better overall small-cap participation.

Bottom line: Holding together ahead of a Fed-funds-rate recycling process will be the key; although I'm anticipating a shakeout in the wings. The 'Jobs' number does not derail the ultimate Fed move; because it appears mostly politically-spun to minimize seasonal adjustments.

If taken at face-value the report is actually a bearish argument; so fortunately if we're right and Friday's hot jobs number was a head-fake, that's the bullish alternative; including allowance for a shakeout. Geopolitical issues pending.

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