A change in focus/Stock market really matters for the economy/MSG/7-11

It was August 1st when I believe we saw a major change of market focus when stocks sold off on the unexpected jump in jobless claims and was followed the next day by a selloff after the payroll miss. And in reverse, we rallied over the past week plus on better than expected claims and retail sales data (along with the reversal of the yen carry trade flush). The catalyst wasn't anymore what the Fed will do, it was old fashioned economic and earnings fundamentals that finally mattered again. 

With regards to the Fed, we've already priced in about 200 bps of rate cuts over the coming 12 months so who really cares if they will cut 25 or 50 bps in September (will likely be 25 bps unless the unemployment rate for August jumps again) and it seems that 'buy stocks because the Fed is done hiking rates and then shifted to the Fed is going to cut rates' trade has played out. That all said, I would not be surprised if Jay Powell this week tried to walk back some of those rate cuts by telling us that his approach to policy right now will be methodical and measured as he digests the incoming data. And that the only way we get 200 bps of cuts is if the economy rolls over, not just because inflation has slowed. We'll of course see.