The continued grind higher in the stock market has landed relative strength index (RSI) levels for both the S&P 500 and the Nasdaq Composite in overbought territory as they hit fresh record highs. Meanwhile, the Dow Jones Industrial Average, which isn’t our favorite stock market benchmark because it is comprised of just 30 stocks, crossed the 45,000 mark and is close to joining the S&P 500 and Nasdaq Composite in overbought territory. Other indicators, including the Citibank Panic/Euphoria model, point to FOMO spirits back in the market as seasonal strength for stocks runs high. However, comments from Fed Chair Powell yesterday that the US economy is strong enough for the Fed to move carefully on rate cuts should raise questions about the Fed delivering another 25-basis point rate cut later this month. In addition to the economy being stronger than the Fed expected back in September, Powell conceded inflation is running higher, which is evident by looking at September and October inflation data as well as the upward climb in ISM Service PMI pricing data over the last several months.With a thin economic calendar today, and only one Fed speaker on the docket, the market will likely tread water as investors contemplate the market’s current technical setup and prepare for Friday’s November Employment Report. The consensus forecast sees 214,000 jobs added in November with the Unemployment Rate rising to 4.2%. We’ll be pouring over the report like we usually do but this time around we’ll be paying closer attention to revisions for the September and October nonfarm payroll figures. The initial collection of data for both was impacted by Hurricanes Helene and Milton, and the revised figures will factor into our analysis of job market strength and the economy.The potentially larger fly-in the rate cut ointment could be the November average hourly wage gains. We say given the sequential year-over-year jump found in ADP’s (ADP) November National Employment Report on Wednesday. That data revealed year over year pay gains for job stayers rose for the first time in 25 months while pay gains for job changes jumped to 7.2% from 6.2% in October. “Stubborn wage growth” was called out in S&P Global’s(SPGI)November Services PMI report on Wednesday, while the Fed’s final Beige Book of 2024 found “Job growth and wage growth for entry-level positions and skilled trades were an exception, rising robustly and expected to grow further through next year.”Should the November wage data come in hotter than the expected 3.9% year-over-year figure, it would be the latest data point suggesting the Fed is more likely to deliver a monetary policy pause on December 18 than another rate cut. With the stock market overbought, that outcome could lead to profit-taking, especially for higher-flying stocks even as we approach the seasonally strongest time of the year for stocks – the year-end melt up. Of course, we’ll need to see the reported number of jobs not fall out of bed for November, but figures from ISM, S&P Global, and ADP suggest that shouldn’t be the case… but then again, the October Employment Report surprised everyone and didn’t align with findings from those three firms. The market consensus calls for 200,000 jobs being added in November.While we wait for that report, we’ll be parsing quarterly results from discount retailers, including Dollar General (DG), Dollar Tree (DLTR), and Five Below (FIVE) sizing them up against recent comments from Costco (COST),Walmart (WMT), Target (TGT), and shopping data for the Black Friday-Cyber Monday shopping weekend.More By This Author:Retail Investors Are Long Confidence And Short ExperienceNvidia’s Guidance Weighs On Equity Futures S&P 500 Nears Overbought, Fed Heads & Inflation On Deck