It’s summertime and the living isn’t quite easy. 

The summer is known for its quiet sessions with light volume.  Yesterday was a lazy and hazy session, but it wasn’t a typical summer session. Instead, it was all about tension. Unfortunately, it got the best of folks with short-term gains, as many rang the bell and grabbed a seat on the sidelines. 

Market Breadth	NYSE	NASDAQ
Advancers	1,138	1,366
Decliners	2,071	3,319
New Highs	26	47
New Lows	58	96
Up Volume	1.55 billion	1.26 billion
Down Volume	2.38 billion	4.02 billion

Heat Map

Four sectors were higher, including Energy (XLE), which may have found a near-term bottom. The session saw investors retreat to defensive sectors and bail on growth sectors. 

Interestingly, Microsoft (MSFT) held up, but that big slug of red in the Technology (XLK) arena was semiconductor stocks.

Recession Got Worse

As we await the Consumer Price Index (CPI) report this morning, bond yields continue to invert with the 10-2 curve,which is just as steep as any point since the 1980s. 

The 10-3 month curve is inching closer to an inversion – that is supposed to ring the red phone in Powell’s office. 

Buckle up; this could be a wild session.

Portfolio Approach

We are adding a new position in Technology this morning to our Hotline Model Portfolio. If you are not a current subscriber to our premium Hotline service, email Info@wstreet.com to get started today. 

Today’s Session

The CPI report is out, and it’s better than expected; and initially, the street loves it.  To put this in proper perspective, prior to today, in the last 17 months, the CPI came in higher than consensus 12 times and in-line five times.  This is the first time in almost two years it’s come in below consensus.

There is still a lot of real pain on Main Street.

For now, the hopes are the Fed won’t drive the economy into a ditch, and the recession will be shallow. I can’t say the all-clear has sounded, but I can say, it’s been a mistake to be too bearish and not listen to the market or data.

Comments

The price came down but housing and food prices rose and will continue to rise. By the end of the 3rd quarter or beginning of the 4th oil prices will go back up; when Biden stops selling are oil reserves! william slutz on 8/10/2022 10:00:52 AM

Only the Street would react positively to 8.5% inflation...its crushing the "little guy". No one trying to feed their family thinks "8.5% is just great, its just great". MT on 8/10/2022 10:06:39 AM

Something to watch for: Watch the Weather Reports for Tropical Depressions forming way out in the Atlantic. When 2 or 3 spin up and head toward the Gulf, buy into the Oil space. Happens every year. TJ TJ on 8/10/2022 11:15:10 AM

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