Jobs Report

Bloomberg reported that private payrolls rose by 71,000 in July, which is less than forecast.  The S&P 500 declined 13 points on the news.  In addition, bond yields continue to move lower; a sign the economy continues to struggle.

Today’s stock market close will be an important indicator of the short-term market trend. A close below 1100 on the S&P 500 would put the short-term upward trend in jeopardy.

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Economic Briefs

 Supply Chain Strengthening

The ISM Service Index came in at 54.3 for July, a number that’s better than expected.  The index was at 53.8 in June and was expected to sink back to 53 in July.  The ISM is the Institute for Supply Management, so its indices for both the service and manufacturing sector signal growth in the supply chain when they rise.

Jobs Are Up

The ADP employment report shows that 42,000 jobs were added in July and Friday’s Nonfarm Payrolls could surprise to the upside.  July’s rise in private employment was the sixth consecutive monthly gain.  However, over that period increases have averaged a modest 37,000, with no evidence of acceleration. read more

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Dodging the “Death Cross”

The S&P 500 recaptured 1100 on Friday.  This is a positive short-term development.

Prior to last week’s rally, the S&P 500 was in jeopardy of violating the long-term uptrend.  In early July, the S&P 500’s 50-day moving average crossed below its 200-day moving average.  This is known as the death cross.  The crossing of the two moving averages is a bearish signal and often predicts further market declines.

Thankfully, earnings season kicked off with a slew of strong earnings reports.  The market rebounded and is within striking distance of the 50-day moving average, crossing back above the 200-day moving average. read more

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