On the data front, the optimism surrounding the U.S. labour market has been bolstered by strong U.S. housing and manufacturing data. It’s worth pointing out that while the economic data out of the US has been broadly positive lately, it hasn’t materially changed the market’s perception on when the Fed will begin hiking interest rates. Thus, it’s supportive for U.S. equity markets.
In the QE era, strong U.S. economic figures can result in a negative reaction from U.S. stocks because it makes the market jittery about the prospect of higher rates. This time is different because the market’s expectations for monetary policy haven’t really been altered, despite the general feeling from the Fed’s July policy minutes that the doves are moving closer to becoming the minority.