It was an interesting week for the market that seemed lackluster on the surface. Beneath the surface however, investors were being informed about winners and losers within industries like rails, which saw CSX miss and the stock move lower, while KSU beat and its shares rallied.

The big three are generally called tech stocks, but two are in Communications Service and Amazon is the largest component in Consumer Discretionary.

• Facebook (FB)
• Alphabet/Google (GOOG/GOOGL)
• Amazon (AMZN)

Speaking of Technology, that sector will get a boost out the gate after sweeping upgrades in semiconductor names at Goldman Sachs.  The chip sector was already building a head of steam as it barreled toward a double top at 119.60; a breakout there would be huge for the entire market. 

Beyond Hot Names

The discovery process continues this week with the largest swath of earnings this season scheduled for release.  All eyes are on the big momentum names, but 144 S&P 500 names report and 10 of 30 Dow Industries are posting results as well.  In Consumer Staples, three big and boring names, but great Main Street proxies, will release results: AT&T (T), Coca Cola (KO) and Ford (F).

Portfolio Approach

Today’s Session

The market is in full summer doldrums mode and bracing for earnings.  It is also resigned to the notion of the Fed only cutting rates by 25 basis points, but President Trump continues to focus on missteps and the need for Powell & Co to correct them.

Donald J. Trump

With almost no inflation, our Country is needlessly being forced to pay a MUCH higher interest rate than other countries only because of a very misguided Federal Reserve. In addition, Quantitative Tightening is continuing, making it harder for our Country to incompete. As good.....

Donald J. Trump

It is far more costly for the Federal Reserve to cut deeper if the economy actually does, in the future, turn down! Very inexpensive, in fact productive, to move now. The Fed raised & tightened far too much & too fast. In other words, they missed it (Big!). Don’t miss it again!

Donald J. Trump

....as we have done, it could have been soooo much better. Interest rate costs should have been much lower, & GDP & our Country’s wealth accumulation much higher. Such a waste of time & money. Also, very unfair that other countries manipulate their currencies and pump money in!

I think President Trump is correct about the Federal Reserve, but I also think the Fed has instincts it has been ignoring and would make a big mistake by playing with the old playbook and not being aggressive when many, including Powell, have major fears of low inflation.