Another rate increase 'should' be off the table, at least for September. Yes I realize the Writer's Strike etc. distorted the Jobs Report; Construction saw a bit more hiring (oddly in a way). However our view will support no Fed action for now, while the Fed 'moves quietly' still unwinding their Balance Sheet.

Market X-ray: trading was generally almost halted due to an influx of apathy Friday. That was generally 'relief' on the Jobs Report; mixed with trepidation's as we work a bit into September, with everyone seemingly seasonally aware.

The tone and breadth was generally higher, and should allow further renewed upside (at least attempts), provided we get through the next few days without a 'stealth' negative major news event (I'm thinking about the war for-instance).

A lot of analysts 'now' agree with our firm Oil forecast, but they somehow like Energy while also being favorably-inclined towards easing inflation? That just doesn't mix well; sort of like Oil and water. And the cost of delivering Pellegrino increases with higher fuel costs. I'm just focusing on charts since everyone knows where things generally are, as we wish you a fine holiday weekend.

Friday's market was indecisive in a sense; unable to draw conclusions from the Jobs number; and that's good enough for the moment. Loosening jobs of course encourages the idea of the Fed 'standing pat' for now anyway; so that is a plus. We frame this still as a mixed risk environment for September.

Bifurcation has been our view all year; and still is in a sense. Mega-cap risk is more earnings-dependent because they are in the top quartile of valuations in terms that are remotely plausible. But much of the smaller-caps are reflexively showing signs of life, even if their prospects largely depend on achieving goal levels that their CEO's pledged, but have yet to engender great optimism.

This really takes us back to a slightly diverse macro views. Whereas inverted yield curves would suggest harder landing; our 'softish' view prevails in what is a weird cycle in many aspects (different sectors behaving erratically). Plus, a key point on the low-price speculative techs relates to money managers (as I particularly point to hedge funds) desperate for performance; so leveraging in stocks where value may be overlooked is pretty much counter to seasonals at this point. Most hedgers were and are more negative that was correct for a slew of small-caps; but now those likely get accumulated (the survivors with a good chance of thriving after barely muddling through).

So it will help if the 'Fed is done'; although I noted there was inflation in some areas. Oil prices are dominant in that regard; and that might be why late-cycle behavior is somewhat evident (traditional in Oil, but this time blame Saudis). It is an inflationary aspect that pushes food price too; and we'll see. 

Bottom line: I think the Fed 'should' be done pushing the 'terminal rate'; but you can't be sure. The stock market is banking on a quieter Fed, not so much 'relief' (cuts) which is more a possible feature for next year. If the Fed is trying to avoid huge job losses, that need to 'chill' and stop offsetting their monetary policy ease of two years ago (overly retained as noted then); and be realistic, as opposed to proving a ridiculous goal of 2% inflation when Oil and climate, both, are combining to make that impossible without wrecking the economy.

More upside if the news backdrop doesn't interfere over the long weekend I'm hoping every enjoys safely.

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Market Briefing For Thursday, Aug. 31
Market Briefing For Wednesday, Aug. 30
Market Briefing For Tuesday, Aug. 29