Another impressive bear market rally, bitcoin holds $19k

Back-to-back gains for stocks were powered by another round of strong earnings and a mixed round of economic data that suggests the economy is softening. ​ After the close, traders will pay close attention to JB Hunt earnings as they will provide an update on what shipping trends to expect this quarter. Netflix will report and everyone wants to know if they are able to post strong subscriber growth numbers. ​ ​

This is an impressive bear-market rally that will likely get faded as the Fed is nowhere near ready to downshift its tightening pace. ​

The banks have given Wall Street some reasons to be optimistic, but now the focus shifts to Netflix and sectors that are quickly making their way into a recession. ​

US Data

Today’s round of economic data was mixed but still supported the Fed’s mission to fight inflation aggressively. ​ Stronger factory data should support easing inflation drivers. The September industrial production data should lead to further momentum going forward.

The NAHB housing market index showed the cooling of the housing market continues. ​ Builder confidence has now fallen for 10 straight months and is at the lowest levels since May 2020. ​ Not counting the COVID lows when the country shut down, we haven’t seen builder confidence this low since August 2012. ​ ​ ​

Crypto consolidates

Bitcoin almost made a run towards $20,000 but most investors remained skeptical that this week’s risk rally was going to be short-lived. ​ Crypto is locked into consolidation mode and that will continue until investors are convinced of the risks of the Fed over-tightening and sending the economy into a severe recession are gone.

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