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...
Gold Outperforming Stocks YTD As Dollar Has 5th Monthly Decline
With global stock indices - and the S&P - both just shy of all time highs, even as bond yields stubbornly refuse to validate the "equity upside" story, Bloomberg's macro commentator Richard Breslow, looking at recent yields and spreads writes that "in reality, these spreads just can’t be doing what they’re doing if the tapering and rate-hike stories were truly being given credibility" and has a troubling thought: "what is bond yields have been right all along"?
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...