Friday's August nonfarm payroll is a critical data point this week for the Market

Yesterday's sectors performance favoured the Bear sectors although surprisingly Consumer Cyclical also beat the Market (Bull days (>0.5%) have been favouring Healthcare, Consumer Cyclicals, Technology and Basic Materials and Bear days (>-0.5%) favouring Real Estate, Financials and Utilities).

Only a few Industries were in positive territory yesterday; Brewers, Personal Products, Household Products, Wireless Communication, Tobacco and Multiline Utilities. A notable number of 52 week highs in a few sectors; Consumer non-Cyclicals (Food and Tobacco), Financials across the sector, Real Estate (Residential and Commercial REITs) and Utilities (Electric Utilities & IPPS and Multiline). Notable high volume in Technology (Technology Equipment, particularly Semiconductor and Software).

With the Market now expecting imminent interest rate cuts following Powell's recent comments, the focus returns to news. Yesterday's weaker than expected ISM Manufacturing spooked the Markets and August's nonfarm payroll is released on Friday, poor figures here could magnify Tuesday's falls. The Fed's interest rate decision is on 18 September.

Market volumes have been soft over the last month but as the traders return to the Market post the Summer break, post Labor day, the direction of the Market should become evident, particularly as we start to see Q3 results and guidance in October. We are in a period similar to that seen in the mid to late 90s with continued fears of overheating and inflation concerns resulting in market retreats followed by periods of strong market performance. Our market history page shows the volatility by sector during this time. During the period '95 to 2000 a time of remarkable underlying growth the market retreated 8 times for typically 2 or 3 consecutive months. The economic environment today would appear to be far more uncertain in comparison.