Stock Market Oblivious To Weak Economic Data

The S&P 500 rose today despite a batch of weak economic indicators over the past two days. Investors perceive that bad news is good news if it increases the chances of a Fed rate cut on September 17. Indeed, the odds of that happening are now 97.6%, according to the CME FedWatch Tool. That's a sure thing. We've been at 40% and are now raising that to a still skeptical 60%. We might have to join the consensus if Friday's employment report doesn't surprise to the upside, as we expect.

Today's JOLTS report for July showed a downtick in job openings, but this series remains relatively high (chart). The ratio of job openings to the number of unemployed workers was 1.0 during July. The paces of both hirings and quits haven't changed much over the past year, suggesting that the labor market hasn't changed much either.