Take a deep breath as market fundamentals remain supportive - Invesco

[Abstract Financial Data Visualization with Digital Stock Market Graphs]
AlexSecret

Investors don't need to zoom out too far to see the big comeback for stocks over the past week. The Nasdaq (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]) has rebounded, the S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) is back near records, while the Dow (DJI [https://seekingalpha.com/symbol/DJI]) breached the 50,000 level and then some [https://seekingalpha.com/news/4548573-sp500-nasdaq-composite-dow-jones-stock-market-news]. A bounce for other assets has also ensued, with gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) returning to above $5,000/oz [https://seekingalpha.com/news/4549237-gold-reclaims-5000-as-chinas-central-bank-extends-gold-buying-spree-for-15th-month], and bitcoin (BTC-USD [https://seekingalpha.com/symbol/BTC-USD]) trading around $70,000 [https://seekingalpha.com/news/4548629-crypto-linked-stocks-rebound-as-bitcoin-ether-rout-eases].

_Snapshot:_ The next big test will be a slew of economic data [https://seekingalpha.com/news/4548932-wall-streets-major-averages-are-mixed-ahead-of-key-economic-data] scheduled for release this week, much of which has been delayed by the last government shutdown (with another partial shutdown on the horizon). Among the data deluge are key items like retail sales data (Tuesday), non-farm payrolls (Wednesday), and the consumer price index (Friday). Expect traders to position themselves accordingly, with the numbers influencing the interest-rate cut path of the Federal Reserve.

"Every silver lining has a touch of grey. That line from the 1987 Grateful Dead captures the mixed signals that defined this past week in global markets," Invesco's Brian Levitt and Benjamin Jones write in a new Seeking Alpha article [https://seekingalpha.com/article/4867843-finding-silver-linings-in-market-selloff]. "Lost in the carnage of the software sector selloff and the unwind of several other momentum-driven areas of the market is the fact that nearly 20% of the S&P 500 Index hit new highs last week. To put it further into perspective, roughly two-thirds of the stocks on the New York Stock Exchange are still trading above their 200-day moving average."

REASONS FOR OPTIMISM? "First, the most recent reading of the ISM Manufacturing Purchasing Managers' Index, which is seen as a leading indicator of the US economy, outperformed expectations [and] the prices paid measure remained essentially unchanged over the prior three months. For a stock market and a Federal Reserve seeking steady activity without reignited inflation pressure, that combination is about as favorable as one could hope for. Next, corporate results generally added more reasons for optimism, [like] continued strength in companies tied to semiconductors and to the construction of advanced data centers."

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