MARKETS Stocks are trading higher Friday, with the S&P 500 on pace for a ~6% gain for the week as investors have been reacting to a favourable mix of Goldilocks growth data and a Fed policy pivot that has brought rates down by ~40bp, as well as a generally constructive third week of earnings season that has helped to lift several stocks that set-up into the quarter with meagre expectations.
Notably, this deflationary wage trend occurred even as the unemployment rate remained low and job openings remained high. Hourly earnings data from the Friday Payrolls report also indicated some cooling off. Cooling Manufacturing Sentiment:The ISM Manufacturing Index unexpectedly fell to 46.7 from 49.0 the previous month, reversing three consecutive months of sentiment improvement. Corporate sentiment has been somewhat out of alignment with actual activity for a while in the post-pandemic era.