Despite the payrolls beat, "hard" data in the US economy closed the week lower for the 5th week of the last 6 to the lowest since May 2015... as The Dow surges for the 9th day in a row to the 8th record close in a row...
Because...
Via Dana Lyons' Tumblr,
This week has seen yet more examples of poor internals despite new highs in the major averages.
It took stocks only a few minute to "price in" the latest political shock out of Washington, and as of this morning Emini futures no longer care that Mueller has a grand jury, trading 0.08% in the green with European stocks and Asian shares all little changed as investors await the looming July jobs report, which is expected to show a slowdown in hiring from 222K to 180K but will have little impact on either the Fed's thinking or the market.
While hard data has been hovering at 2-year lows, soft data has been rebounding recently... until today - The ISM Services index saw its steepest m/m decline this month since the financial crisis.
Mueller headlines spooked stocks at the end of the day but the machines had one message for investors...
From Art Cashin of UBS:
We've noted over the last two weeks that the Dow Industrials have been diverging from most other indices and particularly the Dow Transports. An important part of the divergence has been the relative narrowness of the rally in the Dow. In today's WSJ, Justin Lahart took note of the narrowness: