To call yesterday’s session tough would be an understatement. The breadth of carnage was more instructive than the absolute declines in major indices. There were no safe havens.

There wasn’t a sense of panic, but the session had a sobering aura. Decliners swamped advancers by almost a three-to-one ratio. Down volume edged out up volume, which hints at some buying the dip, but few took the bait this time. 

Market Breadth	NYSE	NASDAQ
Advancers	758	1,253
Decliners	2,062	2,974
New Highs	128	129
New Lows	32	128
Up Volume	1.17 billion	2.08 billion
Down Volume	1.61 billion	2.46 billion

When the dust settled, Energy (XLE) was the only sector that closed higher.

However, late in the session, consumer credit for August came in at $8.9 billion against the consensus of $11.8 billion. Credit card use was down $1.7 billion. The “strong” consumer might have hit ‘Heartbreak Hill.’

Consumer Credit (the first eight months of the year):

• 2021: $276 billion
• 2022: $241 billion
• 2023: $87 billion
• 2024: $74 billion

Sea of Red with Familiar Rafts of Salvation

I know Wall Street keeps saying the Nvidia (NVDA) trade is going belly up any day now, but yesterday, it was one of the more buoyant names in stormy seas.  The stock is still considered a safe haven.

Chips & Crude

Yesterday, at midday, Super Micro Computer Inc (SMCI) announced monster shipping numbers, catapulting its shares to the top of the advancers list. Oil is still getting a bid on geopolitical tensions.

Bond Yields Erupt

There is miscommunication between the bond market and Wall Street's hype masters. The ten-year yield spike suggests that there will not be a soft landing.

Economic Data will influence today’s session.

Today’s Session

China stocks are getting hammered this morning on a lack of additional stimulus injections.  We warned this might happen in yesterday’s note.  I think the markets are trying to sway the powers that be in China to prime the pump even more.

NFIB Small Business report saw optimism edging slightly higher but less than the Street was expecting.  The “hard” components continue to move lower.

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The “Uncertainty” index continues to rocket higher, climbing to a record level.

Interest rate paid on short term loans is skyrocketing as well.

Fed Riding to the Rescue

Perhaps, this is the one reason members of the Federal Reserve are still committed to cutting rates.

As usual, there is a ton of news on Nvidia (NVDA), which has wind in its sails. Can it bring an entire market that seems tired along for the ride?

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