I hope everyone had a lovely Thanksgiving holiday and a restful weekend. The last few weeks have been quite volatile in markets, and it necessitated an active and flexible tactical trading stance and this has paid off.
I warned that we were sitting at the edge of a FCI cliff scenario in my note The Cliff. I tactically faded the equity selloff last Friday, however as noted in , I didn’t know if it had legs to be sustainable without FCI dynamics changing. I liked what I saw this week, and like we have done many times this cycle, we may have edged away from the cliff. We may be at the early days of another powerful FCI loop episode.
Next week should be eventful, on Monday we get both S&P and ISM Manufacturing PMIs. Tuesday is light with Redbook and Auto sales. Wednesday has MBS apps, the monthly ADP series, import/export prices, industrial production, and ISM services. On Thursday we get Challenger job cuts and claims. On Friday we get PCE for September and updated UMICH as well as consumer credit report and used car prices.
Let’s dig in.