US bulls in play on hopes that weaker data could spur rate cut

US STOCKS snapped back last week after a brutal selloff, even as economic data went from bad to worse. The rationale was that weakening economic data could spur the Federal Reserve and international trade negotiators into action.

Indeed, as the economic data grew steadily worse, the odds of a rate cut in October grew steadily higher. This week, minutes from the September meeting could provide further hints as to the conditions that would encourage the central bank to cut rates again at its next meeting on Oct 29-30.

Fed speakers, including chairman Jerome Powell, in prepared comments that emerged at the end of the week, have consistently argued that the US economy remains robust. That argument is getting harder to make.