Last Monday seemed like a distant dream, almost like something one reads in a book, not a real-life experience. Just about everything rocked, as buyers spread it around.

Momo Rules

In the midnight hour she cried, "More, more, more"

With a rebel yell she cried, "More, more, more", oh

In the midnight hour babe more, more, more

With a rebel yell more, more, more

-Billy Idol

The iShares MSCI USA Momentum Factor ETF (MTUM) has turned around and is regaining speed, which has elevated it above all other market factors. This is the big money trade that everyone is willing to play musical chairs with. The last person standing pays a heavy price, but the party is back on for now!

Small-Caps Seek Big (rate) Cuts.

The iShares Russell 2000 ETF (IWM) faces years of massive refinancing beginning in 2026. Rates must drop for many of these companies to survive.

With the July bounce faded, the Russell 2000 is back to near-record low performance against the S&P 500.

Saving the Economy or Feeding Wall Street?

The Bank of America’s survey of global fund managers saw a spike in those who viewed monetary policy as too restrictive. The first observation is past spikes were associated with tough times ahead.

But when I looked at it again, I saw spoiled Wall Street traders looking and chirping for ambrosia, like baby chicks in a nest waiting for Powell & Co. to feed them easy money.

Today’s Session

The CPI report came in much as expected, meaning a rate cut is still priced in. But there are areas that nitpickers at the Fed could bring up as a reason to wait for more data.

When equity futures began to slide on the news, the financial media went into scurry mode to find positives -especially with core edging higher month-over-month (0.2 from 0.1).

It looks like they are settling on the three-month average move.

CPI Moves

• 1 month: 2.0%
• 3 months: 1.6%
• 6 months: 2.8%
• 12 months: 3.2%

Strong Consumer?

Try squeezed consumer!

Prices of things we must buy continue to surge, while prices of things we want are freefalling (weak demand).

Life is hard and people are doing what they can to adjust. This all dovetails into a society that has become unaffordable for the masses.

Rate Cut Futures

• 25bps 56.5%
• 50bps 43.5%

We are watching falling giants, as consolidation is picking up.  Yesterday, there were very intriguing names among the top ten percentage gainers.

The Mighty Have Fallen
Gainer	Name	YTD	1-Year	Market Cap
#2	EL	-37%	-43%	$33B
#4	INTC	-59%	-39%	$88B
#7	NKE	-28%	-26%	$112B

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