Stocks closed modestly lower yesterday, with all of the major indexes keeping their more than 5% rally this week intact.

Yesterday, OPEC+ said they would cut oil production by 2 million barrels a day. Oil has fallen by more than -41% from its peak in March to its low in September. But it has since started to move back up. After yesterday's news, crude oil was up another 1.75% at $88.03. That's still down roughly -32% from its highs, but is up nearly 15% from its September lows.

In other news, yesterday's MBA Mortgage Applications showed a -14.2% w/w drop, with purchases down -12.6%, and refi's down -17.8%.

The International Trade in Goods and Services report showed the trade deficit narrowing to -$67.4 billion in August vs. July's -$70.5B and views for -$68.0B. Exports were down by -$0.7B, while imports fell by -$4.1B.

The PMI Composite report for September came in at 49.5 vs. August's 44.6. The Services Index came in at 49.3 vs. last month's 43.7.

The ISM Services Index dipped just a bit to 56.7 vs. last month's 56.9, but beat the consensus for 56.0.

And the ADP Employment Report came in better than expected with a gain 208,000 new private payroll jobs vs. views for 200,000. Additionally, last month's report was upwardly revised to 185K new jobs vs. the previously reported 132K.

We also saw the Federal Reserve Bank of Atlanta upgrade their GDP Now forecast for Q3 GDP to 2.7% vs. 2.4% earlier this week. (Just last week it was as low as 0.3%.)

Today we'll get another look at the economy with the Challenger Job-Cut Report, and Weekly Jobless Claims.

But the report everybody is really waiting for is Friday's Employment Situation report. At the moment, the consensus is estimating that 250,000 new jobs were created in September (280K in the private sector and -30K in the public), with the unemployment rate staying the same at 3.7%.

In the meantime, the market has rallied sharply off of last week's lows.

And with plenty of positives in the economy right now, it should have.

Add in that Q4 is typically the best quarter of the year for stocks, especially in midterm years, and the outlook for stocks looks even better.

Of course, everybody's wondering if we've seen the bottom, at least temporarily – long enough for a solid end of year rally and then some.

The only sure way to know if we've seen the bottom yet is with hindsight. But there's no money in that.

There are plenty of ways to gauge whether we've hit bottom or not. One such way is with the Equity Risk Premium or ERP measurement. Large investors use it to determine when it's time to pivot to the long side again. To learn more about this indicator, and how you can use it yourself, be sure to read our latest commentary...

Where's the Market Bottom?

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