Investors bought stocks over the last two trading days for better or for worse. I say that because the bids returned once expectations of a September Fed rate action faded. But those expectations only decreased because of recently soft economic indications. So are we really better off or are we worse off? Dissipating energy in this stock market rally, if we can even call it that, will probably indicate we are worse off. And the upside is capped because that is the truth. And I got news for you, there's still a decent chance the Fed will raise interest rates in two weeks.
The five-day chart of the SPDR S&P 500 (NYSE: SPY) illustrates the market reaction to recent data. Stocks had been pressured into Friday's monthly jobs report because of the costly implication the data could have provided to the capital needy.
