Shockingly aggressive revisions in US jobs data paint a less rosy picture of US economic health over the past 24 months. These revisions not only suggest expectations for lower interest rates but also indicate a troubling shift for labor statistics departments,

A weaker dollar and settlement of US tariff negotiations is supporting an uptick in sentiment and increased capital flows towards emerging markets and China. While domestic Chinese stories remain plagued by the economic overhang, many global Chinese manufacturing and technology firms have low valuations versus global peers.

With continuing claims hitting YTD highs and trending higher over the past quarter, the question becomes whether this could be a leading indicator of greater deterioration in US economic data statistics. Worsening jobs numbers could help support the Fed/Trump's rationale to reduce interest rates in September.

Market volatility is at YTD lows and liquidity is running rampant causing quant equity strategies to give back a portion of their YTD returns.

There has been a repetitive pattern in US equity markets over the past weeks; equity index futures trade flat to slightly up or down by a few basis points overnight, have a bit of price swings around the open, then settle with a modest positive day. In fact, there were only 1-2 "big" down days since July 1st. These market conditions have served long-only and long biased strategies well and resulted in extremely low market volatility.

The momentum factor has lifted over the past two years and its relentless trek higher is exemplified in the equity markets with winning stocks continue to trek higher with little consideration for fundamentals. 

Non-professional individual investors have often been perceived as less sophisticated than career financial professionals. Typically, the trading behaviors of these individual investors act as contrarian indicators, as their decisions are often influenced by less concrete fundamental factors.

The relentless melt up for risk assets continues with today's monthly equity options expiration serving as a technical gravitational pull for equity prices. On the macro side rates and FX markets were roiled by Powell replacement talk and commodities have caught a bid.

If the US consumer credit downtrend were to continue, some overvalued areas of the stock market linked to US consumer spending could be vulnerable to a pullback.

The market is sending mixed signals: a "risk-on" frenzy is driving expensive U.S. stocks, while professional investors are looking for value in Europe and betting on a weaker U.S. dollar.