Equity markets pulled back for a 2nd day following the Fed's latest 75 basis point interest rate hike. The takeaway from the meeting is that interest rate hikes will continue until inflation gets back into line although the pace may slacken if the data warrants. What this means for the market is that another 75 basis point hike could be coming in December if the inflation data stays hot.

Today's action will be impacted by the NFP report which is expected to show a moderately strong job increase of 200,000. If the data comes in strong like the ADP figure on Wednesday it will reinforce the idea that another 75 bps interest rate increase is on the way. More important, however, are the wage gains which should show another strong 5.0% YOY increase which is underpinning overall inflation and the Fed's need to continue raising rates. The bottom line is that economic conditions have not gotten any better and they may actually be getting worse.