The market started slowly yesterday, but it finished fast, underscoring the tension of fence-sitters. The more the market rebounded, the greater the pressure was to get in on the action.

 

Only Communication Services (XLC) closed lower.

Green Pastures

There was lots of green on the screen as fence-sitters blinked and joined the party. When the dust settled, weakness in semiconductors stood out. Mega-cap names had a pedestrian session and some were even down on the day.

Widening Rally

All the major indices were higher in the session.

NASDAQ Steady

Although there were more new lows than highs on the NASDAQ Composite, it has been steady as she goes.

Market Breadth	NYSE	NASDAQ
Advancers	1,949	2,482
Decliners	866	1,755
New Highs	175	93
New Lows	34	126
Up Volume	2.33 billion	2.56 billion
Down Volume	1.63 billion	2.11 billion

Some see the calmness of the NASDAQ move as a negative, but I think it’s inviting.

Gushing

Energy (XLE) led the way as advancing issues built.

Energy is on fire, but buying was evenly distributed across the board.

Fed Day

More economists believe the Fed will hold off on the first rate cut until September. My problem with that is it would be too close to the election, which means if the Fed doesn’t cut by the Federal Open Market Committee (FOMC) July gathering, they will wait until after the election. That’s my hunch at the moment.

Sticky Stuff

The problem with stubborn inflation is it becomes ‘stick.’  Reports that inflation is coming down or the pace of inflation is coming down are inaccurate.

Suddenly, higher inflation has surged to the top of the biggest tail risk to the market.

Soft Landing

The Street continues to see a soft landing, although fewer professional fund managers feel that way compared to January.

Meanwhile, the “no landing” camp is growing, which is probably better news for the stock market.

Today’s Session

It’s a relatively benign start to this Fed day.  The major indices are down slightly. Chipotle (CMG) is a major mover today, up 7% after the company announced a 50-1 stock split.

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