Wheat’s war rally meets its cyclical crest while a blowout jobs report fails to lift the long end
Friday’s jobs report blew past expectations, and the bond market shrugged. The Establishment Survey printed 162,000 new jobs against 55,000 expected, the Household Survey added 569,000, yet the unemployment rate and wage growth came in about in line and barely moved from July, so the Fed’s calculus hardly changed, with hike pricing edging from 33 to 35 basis points for the year’s final three meetings and the odds of a September 16 move near 60% from about 50%. Yields told the same muted story, the 2-year up 4 basis points, the 10-year up 1, the 30-year about flat. Stocks slipped, the S&P 500 off 0.38%, the equal-weight index down 0.47%, the Dow 0.51% lower and the Nasdaq off 0.29%, while the Russell 2000 gained 0.25%. Underneath the indices a rotation ran. AI equipment and chip names rallied on hopes tied to the Anthropic S1 filing, which a Friday-night report now pushes to later in the month, while software, Apple, Tesla and healthcare sold off. Brent added 0.6% to about $96.10, gold fell 0.85%, silver 1.15%, and bitcoin dropped 2.14% to $79,720. The weekend brought another US-Iran exchange and reports that Tehran plans to stretch the conflict for months, and on Sunday Beijing announced a $54 billion capital injection into its state-owned insurers and banks.
Three things stand out in the weekend scan. First, the rates test ended in the shape we sketched on Thursday rather than in a clean win or loss: the long end did not fall, but it also did not rise into the strongest data point of the week, a flat 30-year and a 10-year up a single basis point against a 2-year up 4. The 20-year, last week’s bearish-maximum alert, has eased to -56 on Thursday data and dropped below the alarm threshold, so that episode closes with the long end unlifted, while the 30-year and the 10-year keep the warning alive at -87, well inside the range where the model looks for a top. Second, the board’s deepest reading now sits in wheat at -93 with a bull exit, the upward move has lost its drive and looks ready to tip over, the war rally of the past two weeks meeting its cyclical crest, and that makes it the Chart of the Day. Third, the DAX warning holds at -90 on five cycles, and this one carries a longer arc: the same index was a +100 floor call with a bear exit on the record on April 10 near 23,800, the sellers had given up and the downswing appeared to be at its end, and the rally that followed ran nearly 12% to a record 26,570 by late August. The first half of that round trip is paid and on the record; the second half is the test now running, the full arc below.
Our daily analysis filters roughly 45 markets through a cycle consensus engine. Each asset receives a Consensus Score from -100 to +100, the model’s summary reading for a possible turn, where positive values mark potential cyclical bottoms (a time window where a decline could end) and negative values potential cyclical tops (a window where a rise could stall or reverse). Readings beyond ±60 enter the critical zone, a critical reading at which the cycle model raises the alarm for a possible turn. Let’s take a closer look.
