Stocks limped out of August but held up nicely, establishing more record closes. Now, the toughest month of the year is beckoning.

There was a more defensive tone on the market on Friday, as Health Care (XLV) and Consumer Staples (XLP) names dominated the list of top advancers.

Low volatility was the only factor that saw green through all sizes.

But all arrows point higher.

Seasonality Blues?

The market has pushed back against all the Wall Street axioms and pronouncements this year, but September feels like a formidable challenge.

There are numerous questions arising from the ruling on tariffs, which reinforces the notion that the Supreme Court will have to decide whether the White House has implemented them in accordance with the Constitution. I hope the Fed Gov. Lisa Cook’s situation doesn’t end up at the Supreme Court. Still, it's hard to imagine any district judge ruling on merit instead of ideology these days, even with a mountain of evidence.

Today’s Session

As suspected, equity futures are under considerable pressure this morning, especially high-flying mega cap names with humongous gains.

There will be some profit-taking at the open, the question is how much selling will beget additional selling.

Investors greeted by stories of how this market is the most overvalued in history could be spooked.  The story has run all year long and even before this year.

This is a deliberate attempt to shake out weak hands.

This market is uniquely different than just before the Great Depression and Dot.com bubble.

Mag Seven Effect

Accounting the impact of the Mag Seven, this market has been trading in around the upper bound of historic forward PE range which is not alarming.

Comments

Once more "into" or "unto the breach" we go! Depending on the exact quote and preference. This will be interesting to see how it all plays out. Terry Dowler on 9/2/2025 12:32:53 PM

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