Another solid session on Monday, although not as high as some assumed on Sunday when trade headlines were crossing the wires. Seeing non-profitable tech (XLK) weaken a little, with more monsters opening higher, but closing in the red (red flag after monster gains). It’s still about artificial intelligence (AI) broadening (see Qualcomm Inc (QCOM)), but also retailers catching bids. 

Close your eyes and go back to late April, when they said the world was imploding, that it was the end of ‘American Exceptionalism,’ and the U.S. stock market. Well, the market has been on a six-month winning streak since.

And if history is a guide, this rally will begin to rocket even higher (October 26th is the usual low point of the month). 

Spreading the Wealth

Large-caps rocked across the board, while small-caps were mostly unchanged.

Breadth was mildly bullish, except for up-to-down volume on the NASDAQ, which reflects the excitement for the hottest name.

Today’s Session

Earnings season is warming up nicely.

Corporate earnings are coming in at a furious pace, and my initial observation is that the labor market is in more trouble than the “experts” will acknowledge. 

Job layoffs and hiring freezes are helping share prices.  The economy is not exactly the stock market, and vice versa.

Can the nation thrive in a period of jobless prosperity? 

Beaten-down names, with low expectations, are being beaten and rewarded.  That’s the case with United Parcel Service (UPS), where revenue and earnings are down year after year, but beat Wall Street consensus.

Stocks not priced for near-term perfection are responding nicely.

Stocks priced for “near-term” perfection are stumbling—in most cases, investors should be careful about knee jerk selling.

And those names that miss on both are getting hammered.

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