Good Morning,
I hope everyone had a great weekend. It looks like we have another beautiful fall week ahead here in Michigan!
Markets opened modestly lower this morning, coming off last Friday’s September jobs report, which came in much weaker than anticipated. The report showed a gain of just 29,000 jobs, less than a third of the consensus forecast.
Odds of a rate hike at the Fed’s late October meeting fell sharply following the report, with markets now largely expecting the Fed to remain on hold until at least December. With uncertainty surrounding the upcoming midterm elections and the war in Iran, the market reaction has been relatively muted.
The next major catalyst I am watching is the start of Q3 earnings season, which begins next week. I remain optimistic, particularly as consumer spending continues to show resilience, although that strength is also contributing to inflation remaining sticky.
The path forward with Iran, and ultimately the direction of oil prices, will likely become clearer after the midterms. Should crude prices begin to meaningfully decline, I believe it could provide the backdrop for a market rally into year-end.
Regardless, the setup remains one where I continue to view periods of near-term volatility as potential buying opportunities as we move further into Q4.
Please continue to reach out with any additional questions or comments.
Attached is this week’s Market Strategy Radar Screen Report from John Stoltzfus, Chief Investment Strategist at Oppenheimer Asset Management.
Have a great week!