The market is in a sigh of relief mode with the better-than-expected news this morning on earnings, retail sales, and consumer sentiment. 

There was a slight bounce in July’s University of Michigan – Consumer Sentiment, which came in at 51.1 vs. 50 expectations, led by current conditions improving.

Five -year preliminary inflation expectations came in at 2.8% vs. 3.0% consensus. 

For me there are two important questions.

• How long will this moment of relief last?
• How many more waves of negative developments are already built into the market?

More information has to be digested, but it’s a clear heavy sling following this week's huge inflation data. At some point, the market will see real relief.

Today, the Dow is ahead of other indices because United Health Care (UNH) is the biggest component of that index. 

The markets are bifurcated between value and higher risk tech names (unprofitable tech). Banks are ripping with Wells Fargo (WFC) and Citi (C) rallying following this morning’s earnings, and Financials are faring the best, what a difference a day makes. Meanwhile, rotation out of defensive names continues, and Utilities is the only S&P 500 sector in the red.

This would be a great way to finish that week, where the number should have been anticlimactic if Wall Street consensus was as smart as Main Street knowledge (nobody in the regular world was shocked).

We want to keep legging in cash this summer.