Yesterday was a solid session with defensive overtones. Ten of eleven sectors finished higher, with Communication Services (XLC) dragging heavily. There was also a lot of bottom fishing: Fair Isaac Corp (FICO), The Estee Lauder Companies (EL), and The Hershey Co. (HSY).

Breadth & Heat Map

Market breadth was overwhelmingly bullish, giving the impression of a small overall gain.

Advancers over decliners were huge, especially on the New York Stock Exchange (NYSE), as investors focus on large-cap quality. New highs were over new lows on the NYSE. The up volume was more than double the down volume on the NASDAQ.

Going into the Nvidia (NVDA) financial release, there was an emerging narrative that software was prepared to overtake hardware.

Salesforce Inc (CRM) was underwhelmed, NVDA was overwhelmed, and Technology (XLK) investors stayed with the hot hand of hardware.

When It Doesn’t Fit the Fear Campaign

Outside of the Nvidia earnings report and court intervention on tariffs, this week's biggest story was supposed to be America’s efforts to raise money.

In many ways, this story is bigger than anything else, as it has been part of the end of ‘American exceptionalism.’ The problem is that treasury auctions have gone off without a hitch this week, and yesterday’s $44.0 billion 7-year auction saw insatiable forcing (indirect) demand.

Bad Luck for Purveyors of Bad News

It is a shame that the financial media constantly ignores good news, such as this week's bond auctions, corporate earnings, and overall market resolve.

When good news must be reported, it is always accompanied by the question, “How much longer can this continue?” Or we are told to ignore it as bad news is approaching.

It reminds me of Schleprock from The Flintstones.

It's no wonder retail investor sentiment has shifted back to bearish after breaking a record 111 weeks of extreme bearishness.

The good news is the purveyors and promoters of bad news keep losing.

Today’s Session

This morning Axios ran a story with a headline (see below) that alludes to economic paralysis. The thing is that the current circumstances for trade don’t need to be stalled or paralyzed.

When something, or someone, is paralyzed, it's involuntary. In the case of trade, there is a way to get moving again and cutting fair trade deals. The mighty forces have too much power in their pockets, so much money that they would risk the global economic calamity, rather than a more brilliant plan for the benefit (not as consumers) of the population.

Economic Data

Oops, it happened again.

Income climbed much higher than Wall Street anticipated.

There is no tariff inflation in the report.

Meanwhile, consumers continue to repair their balance sheets and put much of their income into savings.

Holding onto Your Hard-Earned Money is a Superpower

This is why I have been pushing back from the very start on the notion that higher tariffs mean runaway inflation. Sure, a business can raise its prices, but consumers do not have to buy them, and that is the rub.

In April, Temu announced it was jacking up prices big time.

Last week, the company reported massive declines in sales. That’s how Americans break the chains that hold them back.

And the stock paid a heavy price.

Speaking of China, President Trump issued a warning this morning that added some pressure on stocks, so much for the Trump Put. 

Comments

Great analysis, keep up the great work! Robert Gilmour on 5/30/2025 10:13:44 AM

So, now we've got Our President quoting Alice Coopers "No More Mr. Nice Guy." Gotta Love it!! Charles Haselberger on 5/30/2025 10:27:06 AM

Just keep hammering China until they comply, in the meantime Americans should break their addiction to China products. Michael Ciaccio on 5/30/2025 10:39:36 AM

Tweet

 

Home | Products & Services | Education | In The Media | Help | About Us | Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.