Ugly Data = Pretty Rally – Breadth Finally Shows Up

Market Movement - The market experienced a volatile start with the Nasdaq initially down due to reports of Meta potentially investing billions in Google's custom AI chips instead of Nvidia, leading to a 5% drop in Nvidia's stock while Alphabet gained 1% [1] - By the afternoon, the market rebounded significantly, closing with solid gains across all major indexes, indicating a broad-based recovery rather than reliance on the largest tech stocks [2][6] Economic Indicators - Macro data released was largely negative, including weak ADP jobs, poor retail sales, cooling housing market, and low consumer confidence; however, this bad news increased the likelihood of a rate cut in December, now estimated at over 80% following dovish comments from John Williams [2] - The 10-year yield fell below 4%, the dollar weakened, and stocks rallied as a result of the negative economic data, suggesting a potential year-end market rally despite ongoing uncertainties [2] Trend Tracking Indexes (TTIs) - The domestic Trend Tracking Index (TTI) showed a significant increase of 5.32% above its moving average, with a "Buy" signal effective from May 20, 2025, indicating a bullish market outlook [7] - The International TTI also performed well, closing at 8.60% above its moving average, with a "Buy" signal effective from May 8, 2025, reflecting a recovery in global markets [7]