Friday was very impressive for the market, as the rally widened out and gains were made, even with large cap growth at 0.0% and momentum at +0.17%.

We should see continued broadening, as investors keep gains in the game rather than on the sidelines.

Magic Eight

The implications of the weight gain from a winning streak are encouraging and not just for the current year, but for the next five years.

The magic elixir is earnings growth that has busted out of the historic range.

Time to Get Hot

It was a miserable weekend weather-wise, but then again, 2026 has seen the temperatures bounce around like a pinball.

It's time for the temperature to get hot.

Lots of positive scuttlebutt and reports of an end to the Iran Conflict. 

Buckle up, boys and girls.

Today’s Session

According to Goldman Sachs, the “greatest risk” in the market is a good old-fashioned short squeeze that crushes the smart money (hedge funds), driven in part by retail investors.

I’m here for it.

Downside Risk

Probably the greatest risk is the Federal Reserve being forced to hike rates. The question is how much longer the Fed will look through higher oil and commodity prices.  Already, we heard Chris Waller say rate cut talk right now is crazy, and he was poised to cut not too long ago. 

This week, we get a lot of inflation data, including PCE, which was Powell’s favorite gauge.  I think Warsh is willing to look through as long as headlines continue to lean towards some kind of conclusion in the near-term horizon.

The market has a history of trading down after the CPI crosses 4.0%.

There is also growing concern about market dilution from all the IPOs and other planned issuances in the pipeline.

This is a legitimate concern.

I think it could add to volatility, but it should not totally derail the rally.

Do You Have Your Dancing Shoes On?

I used to go out to parties and stand around

'Cause I was too nervous to really get down

But my body yearned to be free

I got up on the floor, somebody could choose me

No more standin' there beside the walls

Finally got myself together, baby, and I'm havin' a ball

- "Got to Give It Up" by Marvin Gaye

I know it feels like there is too much of a frenzy, but that music is a real fundamental underpinning that separates this market from some of the past we still have nightmares about. We are in it to win it.

Question of the Day

Do aesthetics still matter when you make a purchase?

Last week, shares of Warby Parker (WRBY) were slammed after their new glasses were deemed a flop.  This morning, Ferrari (RACE) shares are getting hammered after the company debuted its electric car.  Maybe it looks better in person, but fans were hoping to be wowed. This didn’t do the trick.

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