We Could Be Two-to-Three Months Away from Seeing Nonfarm Payrolls Contract

Full policy commitment keeps stock valuation fears at bay

Highlights

• Full policy commitment keeps stock valuation fears at bay

• Stock market rally is broadening but concentration remains very high

• Dollar’s weakness is not a simple cyclical story

• U.S. 10-year yield is hovering around its familiar 4.2% resistance level

Key Takeaways

• Policy Support Eclipses Stock Valuation Concerns: This liquidity- and momentum-based bull market received a dose of both to close the week. Excessive valuations, tremendous complacency, and intense market concentration are no match for fiscal policy expansion, a President bent on promoting risk-on investing behavior, and looming Fed rate cuts.