Bull Market Resilience: A.I. and Select Sectors Powering Gains

Market Overview - The market has shown signs of recovery after a significant sell-off, particularly in technology stocks, with Nvidia breaking the $200 level [2][3] - SoftBank experienced a sell-off of over 10% but is also seeing some recovery [3] Economic Data - The ISM services prices came in hotter than expected at 70, surpassing the anticipated 68, indicating inflationary pressures [4] - New orders in the ISM report increased significantly to 56.2%, compared to the expected 51, suggesting a slight uptick in economic activity [5][6] - The ADP report showed an addition of 42,000 jobs, exceeding the forecast of 32,000, with a revision of previous job losses to a smaller decline [7][8] Labor Market Insights - The labor market appears to be more resilient than anticipated, with benchmark revisions indicating a normalization of job numbers [9] - Wage growth has stagnated month over month, but the overall labor market may not be deteriorating as much as previously thought [9][10] - Small businesses, which account for a significant portion of hiring, are facing challenges, potentially impacting overall employment trends [12][15] Earnings Season - Over 80% of companies have beaten earnings expectations, particularly driven by technology firms, which is above the five-year average [17][18] - Market cap-weighted earnings growth shows improvement, providing a positive backdrop for equities [19][20] - Nvidia remains a focal point as it approaches earnings, with concerns about its high trading levels prior to the report [21] Cryptocurrency Market - Bitcoin is consolidating around the psychological level of $100,000, with signs of buyer interest emerging [23] - A potential recovery above $110,000 could signal a risk-on sentiment for the broader market, while a drop below $80,000 would raise concerns [24]