Stocks closed higher yesterday. After a strong open, stocks turned lower shortly thereafter. But, they then jumped back into positive territory in the afternoon. They closed off of their best levels, but higher nonetheless.

Yields rose earlier in the day before reversing. As yields rallied (the 10-year got as high as 5.34%, the highest since 2007), stocks fell. As yields backed off and headed lower, stocks rallied. The 10-yr closed at 5.24%.

Crude oil was up on reports that the U.S. is sending another aircraft carrier to the Middle East, raising speculation that the U.S. could be getting ready to escalate. But crude has been falling over the last several days. Especially after reports the other day that Middle East crude exports rose to 16.3M barrels per day, which is the highest since the war began. That's approximately 80% of pre-war levels. To be clear, Hormuz volume is only at 40% of pre-war levels. But other Middle East routes have increased significantly to get combined shipments at 80% pre-war levels.

And that should cap oil. And help put a lid on yields as well.

Yesterday's PMI Manufacturing Index rose to 55.9 vs. last month's 53.9 and views for 54.8.

The ISM Manufacturing Index came in at 54.5 vs. last month's 54.6 and estimates for 54.8.

Construction Spending increased by 0.9% m/m vs. last month's -0.1% and forecast for 0.0%. On a y/y basis it's off -1.7%, but improved from last month's -3.8% pace.

Weekly Jobless Claims fell -1,000 to 197,000 vs. the consensus for 200K.

And the Challenger Job-Cut Report came in at 43,281 vs. last month's 52,881.

But the jobs report everybody has been waiting for is this morning's Employment Situation Report by the Bureau of Labor Statistics (BLS). The consensus is calling for 90,000 jobs to have been created in September (75K in the private sector and 15K in the private sector), with the unemployment rate holding steady at 4.1%.

After the close, Nike reported earnings and posted a positive EPS surprise of 11.6%, and a negative sales surprise of -1.65%. That translated to a quarterly EPS growth rate of -2.04% vs. this time last year, and a sales growth of -4.35%. They cut their full-year rev guidance more than expected, and said they are looking for a decline of high-single digits. They also announced layoffs. They were off -0.71% before earnings and tumbled another -8% in after-hours trade following earnings. Although, at the time of this writing, it did not seem to have much of an impact on index futures as they were up at the time. But Nike has not been a barometer for the market this year. They have their own problems and are down -44% YTD, while the S&P and Nasdaq are up 12.0% and 15.6% respectively.

I also would not look at Nike as a bellwether for the upcoming earnings season either, which kicks off in about two weeks.

And it's expected to be another stellar one with Q3'26 S&P earnings growth forecast at 23.0%.

In the meantime, Q4 has begun. And in spite of a lackluster start yesterday, Q4 is historically the best quarter of the year for stocks. Since 1950, the S&P has gone up 79% of the time, with an average gain of 4.1%.

So I am expecting a nice rally into the end of the year.

And a little bit of good news today could get that started.

Best,