I go back to that Walmart (WMT) earnings report in which the media was eager to hope for tariffs, but the more likely problem is that consumers are even more tapped out. Consumer Staples (XLP) have pricing power, whereas Consumer Discretionary (XLY) demand probably peaked, hence the monster outperformance by Consumer Staples (see bottom chart) in February.

Friday was ugly as investors fled for the sidelines or traditional safe havens like Consumer Staples, Health Care (XLV), and Utilities (XLU).

The S&P 500 (SPX) closed right on the 50-day moving average mark, a momentum of truth-week.

Large-caps suffered much less than small-caps, which were annihilated across all extended factors.

For those new to investing, selling something simply because it's against you means you will eventually never make money. Trading is different because the onus is on short-term moves and discipline.

By the way, shout out to retail investors who began feeling queasy last month. Sentiment isn’t the same as ‘skin in the game,’ as there has been a steady gusher of inflows into stocks, but the first step to adjusting is to sense or know something is off.

On that note, we want to be opportunistic. I have a long list of names I hoped would pull back.

Today’s Session

Good news on the AI investment front. Apple (AAPL) announced an ambitious three-year spending plan, and Microsoft (MSFT) refuted a report over the weekend that it was slowing down its data center investments.

Coming into the year, Wall Street was close to unanimously agreeing the market would be higher, but there would be increased volatility.  That hasn’t been the case lately, Bloomberg thinks it is because markets no longer fear tariffs.  I think it is more because markets are ignoring Bloomberg headlines.