ISM Manufacturing PMI data came in lower than expected at 48.7 indicating another concern in the overall US economy. Events to strengthen the dollar would likely be a higher JOLTS number and a higher NFP from both the private and public sector.

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Gold
Gold is now the top bullish setup on the EdgeFinder at +11. With weaker ISM PMI on Monday, the US is expecting a lower JOLTS report this morning which would mark the fourth straight month of falling job openings. If JOLTS misses, we could see more demand in the gold market. Right now, price is resting on a key support level on the 1D timeframe around a rising trend line. -Frank

The SPX500 has still not gave in to added pressure from a broader decline in economic outlook. With earnings season coming to a close, the only things left standing in its way for the week are JOLTS, Services PMI and NFP. Although we have seen pessimism in the US economy in the past, the market is quick to recover the losses it incurs from bad news.

-Frank

USD/CHF
One reason why the market may be holding up for now is the lack of bullish sentiment around the dollar. And investors want to look for an alternative to where they should put their money. The fact that US interest rates might be capped at 5.5% means that demand in bond yields and dollar are not as strong as they used to be.

We got softer private payroll numbers and a much higher Services PMI report this morning. This PMI number was the highest reported since last October 2023. There is surely mixed economic figures coming out as the stock market chugs on to all time highs in the NASDAQ. Friday's NFP is expected to come in higher than last month, but a miss could signify an overall cooling jobs market. Stocks may be able to keep running if there is no clear sign of a jobs decline. If NFP does come in higher, gold might get weaker and stocks may move higher.

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Today's unemployment number came out higher than expected for the second week in a row. Wednesday's ADP NFP was softer as well indicating a slowdown in the private payrolls. Tomorrow is NFP, and analysts expect a higher number than last month. But the signs so far this week are pointing to a cooling jobs market.

Gold is still our best bullish reading on the EdgeFinder at +11. The reason behind the metal's bullishness is coupled with the fact that we're seeing a cooling jobs market. Obviously, NFP could change the narrative on Friday, but for now it looks like the economy is not as healthy as analysts hoped.

Investors want signs of a rate cut which coincides with a softer NFP, but it might not be for bullish reasons in the stock market. If the Fed feels forced to cut because of a worse economy, that is not a healthy reason for stocks. But it is for gold which trades as a hedge against the dollar and yields which continue to fall. -Frank

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As the market sits at all time highs, investors may start to question whether the rally is sustainable or not. Regardless of jobs numbers this week, it seems that NVDA is a key factor in the S&P's strength which is now a $3 trillion market cap and is the second biggest company in the world.

NVDA's bullish sentiment is revolved around the 10/1 stock split on Friday which could drive even more demand into the company. Although the stock won't become cheaper on a value basis, it will be less expensive for investors to participate in the trade. -Frank

The dollar remains weaker against the euro as rates seem capped and a rate cut could be the next move from the Fed. EURUSD is now a +10 which up 2 points from yesterday. Regardless of the reason for the cut, this means dollar weakness.

The Fed would like the luxury of cutting as in the economy shows signs of health. However, the signs of a cooling jobs market is not what the Fed wants. And if NFP comes in lower, it's going to look even more bearish for the dollar. This could cause more demand to the bullish side on EU. -Frank

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Retail is now 90% long USOil which is due to its heavy drop in price this week. Falling oil prices could be a result of it being an election year, so I would not bank on oil seeing heavy upside this year. The indices are majority shorted by retail which is another sign for bullishness in stocks for now.

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Jobs data was perceived as bullish this morning as May added more jobs than expected although last month was revised lower by 10K. Unemployment also ticked up to 4% for the first time in two years with a slight increase in wages. Higher wages may also indicate that we could be looking at higher inflation in next week's CPI report. There is almost no fear in the market right now even with many metrics indicating an economic slowdown. The hype around an interest rate cut is still in play.

The S&P broke out of a falling wedge and is now at all time highs. It's hard to say how much further the market will move, and every dip continues to get bought back up. Sellers have not appropriately stepped in yet, so we may continue to see dip buying opportunities in the near future. -Frank

Gold reacted negatively to the labor data this morning possibly due to the fact that NFP was higher. Maybe gold traders are not confident in a rate cut after seeing a "resilient" jobs market. The two year yield is higher today which also indicates a lack of confidence on the rate cuts. Gold is now on support on the 1D timeframe and is looking to possibly test back under the $2,300 level on support. -Frank