The market made a strong rebound heading into a three-day weekend, after the financial media and many market mavens declared new Fed Chair Kevin Warsh a ‘hawk.’ Familiar names led to the rebound.

Heat Map

The big boxes and squares enjoyed strong sessions, finishing near last week's highs. Meanwhile, there was a lack of consistency in the Financial (XLF) and Health Care (XLV) sectors.

However, Energy (XLE) stocks plummeted, following the lead of West Texas Intermediate (WTI). They helped consumer cyclical names, led by Amazon (AMZN), Home Depot (HD), and Tesla (TSLA).

Consumer Defensive (Staples, XLP) also struggled, but I think it's more a matter of valuations being too high.

Factors

Momentum (MTUM) and growth surged, and quality showed signs of life.

Momentum names have smashed quality. Sure, fortunes change, but those who have held firm with this approach are missing out on a monumental moment. Small-cap (SML) stocks continue to impress across the board, led by small-cap Technology stocks.

For the Week

Market breadth was just above even across the board, although there were more decliners than advancers on the New York Stock Exchange (NYSE).

NASDAQ saw the most action and was decisively bullish during the week, with new highs almost doubling new lows, and 50% more up volume than down volume.

It's All About Earnings

Goldman Sachs (GS) keeps hiking its S&P 500 (SPX) target guided by earnings numbers that continue to surge.

Open the Strait

There were conflicting headlines all week long over the Strait of Hormuz.

The Strait of Hormuz must open for two reasons.

We all know about the inflationary impact of higher crude oil, as ships pile up waiting to transit the Strait of Hormuz. But there are other inflationary impacts in key products. These inflationary impacts affect the rest of the world more than the United States, but these are global markets, and it's hard to escape some level of negative impact (see fertilizer prices).

Pax Americana

Other straits are potential chokepoints that would wreak havoc on the world more than the Strait of Hormuz.

The world must believe the United States can keep these chokepoints open, and nations will not be seduced into ceding their military needs and safety to China.

It is a huge week with all eyes on Micron Technology (MU) earnings. Earnings estimates are surging higher, but they may still fall far short of the actual number. The numbers will have to be amazing, and the guidance will have to be even better.

Today’s Session

Major indices are opening the day slightly in the green.

This morning Micron (MU) and Anthropic made a deal spanning memory and storage design, supply, and an investment in Anthropic. The deal is sending Micron higher out of the gate and giving a boost to semiconductors.

In other news, Nvidia (NVDA) launched Halos, a safety system for robots and physical AI.

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