Early hesitation led to panic buying yesterday, which spread beyond mega-cap names, with only traditional safe haven sectors suffering declines.

Buyers snooped around for stocks that weren’t in other orbits, pushing small-cap growth to the top.

Bringing the Heat

There was lots of green on the screen, but weakness in Health Care (XLV) is worrisome.

Meanwhile, the top 10 holdings are 37% of the total S&P 500.

Market Breadth

There were mixed signals among key market breadth metrics. But the up volume was more significant than the down volume for the New York Stock Exchange (NYSE) and NASDAQ Composite, underscoring more incredible determination from buyers than sellers.

Market Breadth	NYSE	NASDAQ
Advancers	1,645	2,149
Decliners	1,161	2,143
New Highs	74	129
New Lows	83	218
Up Volume	1.7 billion	3.5 billion
Down Volume	1.12 billion	2.01 billion

But advancers have dwindled since peaking in mid-May.

Retail Sales

This morning, retail sales should help understand the state of consumers. The report has not adjusted for inflation and is expected to rebound from April’s reading.

This year, consumer stocks have significantly outperformed the market, which is interesting considering the overall narrative of freewheeling, deep-pocketed American households spending like there is no tomorrow.

Today’s Session

Flying High!

Extraordinaire! Remarquable! Formidable!

110 years ago, today, thousands of spectators lined the river Seine to watch 57 planes take part in the Airplane Safety Competition in Paris.

As the band played the Star-Spangled Banner, the last plane approached, piloted by American Lawrence Sperry, who incorporated a gyroscope stabilize on the plane that enabled him to fly hands-free to the astonishment of the crowd.

On the next pass, the plane’s mechanic walked out on the right wing as Perry held up his hands.

The band played the French national anthem as the crowd roared. An aviation and inventor superstar were born and so, too, the autopilot. 

These days, the US stock market is moving in the spirit of Sperry and innovation.

And the crowds are going wild.

Bullishness spiked in the latest Bank of America Fund Manager Survey to the highest level since November 2021.

I’m not sure if they are excited about the brave new world of artificial intelligence or the notion the market and economy will stick the landing.

Investors are fine climbing on the wings of the AI trade as the rest of the market goes begging, but the economy seeks equilibrium as we approach the inevitable landing.   On that score, Jay Powell is the gyroscope.  One must wonder if Powell is haunted by the “transitory debacle” to the point of being gun-shy. He and his colleagues at the Federal Reserve are feeling more pressure to cut this morning. 

As for the soft landing, two key market proxies aren’t convincing.

Small Caps have been spinning their wheels and are at a record low versus the S&P 500.

Then there are regional banks, which continue to struggle.

This morning, we got the Retail Sales report that missed consensus and was peppered with hefty downward revisions.

Comments

This country is a disappointment The government needs to get it together TRUMP 2024 Colette on 6/18/2024 10:04:25 AM

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