"Strong Enough" Economy Holds Bull Thesis, "Rotation" Out of A.I. Good for Indices

Market Overview - The market is experiencing a normal consolidation phase following a relief rally, with potential government shutdown resolution expected soon [2][3] - Economic data, including job losses estimated at 50,000 for October by Goldman Sachs, may not significantly impact market sentiment [3][4] Economic Indicators - An uptick in unemployment towards 4.5% may not disrupt the bullish outlook, supported by double-digit EPS growth over the past four quarters [4][12] - The labor market's weakening could have mixed implications for corporate margins and future EPS estimates, currently projected at 14% for 2026 [10][12] Sector Performance - There is uncertainty regarding whether the market will revert to AI tech stocks, as recent price actions indicate a shift in sentiment towards speculative tech [5][13] - Companies like Palantir and Meta have seen sell-offs post-earnings, indicating potential challenges in the tech sector [7][13] Future Catalysts - Upcoming economic data and Nvidia's performance next week are anticipated to be significant catalysts for market direction [8][9] - The market may require a rotation into other sectors to maintain a healthy uptrend, as evidenced by recent sell-offs in data center compute leaders [7][13]