There are 3 punches here the market is absorbing: uncertainties and fears of contagion relating to the Evergrande fallout, the S&P’s close below the 50-day moving average on Friday, and deadlock in Washington.
Japan’s index is closing in on February’s high, the highest level since the 1990 crash. China’s Shanghai Composite is also at its highest since February, now up nearly 5% on the month and 12% since the July low.
It’s important to note the ongoing differences between the ADP private payrolls survey and the official Nonfarm Payroll report due this Friday. Over the last 3 months, CNBC noted an average difference of 337,000 jobs between the reports.
U.S. benchmarks have continued their rebound from last week’s healthy pullback. After a quiet overnight session, the S&P is staring down the barrel at its all-time high. The Nasdaq has already set a fresh record for the second straight session.
A very minor shift in the Fed’s rate hike expectations has roiled risk assets and strengthened the U.S. Dollar. Via their dot plot, committee members now anticipate 2 rate hikes through the end of 2023.