I figure unemployment won't be too bad, but think durable goods might not be as happy as wished for, and same with home sales. All that said, my guess is unless China gets into troule overnight, bad news will still be good news, until it becomes obvious it isn't. Totally irrational, IMO...
It's hardly "irrational." The market is banking on rate cuts. Good economic news with rising inflation isn't the impetus for an accommodative Fed. Hence credit markets need some reassuring "bad" news.
I thought I read somewhere that the Fed never cuts until things are already bad enough that profits sour, and the end result is that usually when they cut, it ends up a signal that its too late, and the market drops anyway. Sorry, don't recall WHERE I read that, and don't know if its actually supported by history or not.
I've shown this chart before. It basically shows (IMO) that the FED doesn't start cutting after a plateau, until AFTER the market pulls back from a substantial high. If that thesis holds true, we've got a while to wait for the market to have any kind of a reasonable pullback showing signs of weakness. I put up a chart on dur goods under trading. It basically shows that dur goods YOY has been decreasing for the past 1.5 years, while S&P has been rising. No correlation between weak Dur goods data and rate cut IMO.
AFTER? LOL, its a game of be careful what you wish for then, because if you get it, you must already be dead.
This topic of a fed rate cut is a wall street put, remember the Greenspan put? It was brought into focus to keep the rally moving, the rational is if the economic data is weak, we get a rate cut rally rally, if the data is strong it just means the economy is strong, super who needs a rate cut rally rally. Its a win win situation. The problem now is our relationship with our primary lender China. I think this is going to cause some unforeseen trouble.