It may have seemed like a lazy summer day ahead of a three-day weekend. There was major drama and movement in the market yesterday; 59% of the S&P 500 (SPX) finished higher, but Technology (XLK) dragged the index lower. More specifically, semiconductors (SOX) dragged the market lower in a record-shattering quarter.

Semiconductors have not only become the strongest niche in the market over the past decade, but for the most part, they've been the proxy for the health and vibrancy of the U.S. economy.

This type of consolidation in semis is what you want to see, especially if the Semiconductor ETFs (SMH and SOX) hold above their respective 50-day moving averages.

This story has several more chapters to go, so I suspect there will be some buying on the dip soon.

Jobs & July

This morning we get the jobs report, and it's intriguing because last time around, good news morphed quickly into bad news for the market, as it meant the Fed wouldn’t be cutting rates anytime soon. On the contrary, models saw anywhere from one to three rate hikes this year.

Fed Warsh is not going to hike rates. That being said, even Powell would hike them with recent stagnant wage growth. It's just one of the more important aspects of today’s report.

The good news is July has been a hot (I couldn’t resist) month for the stock market.

Happy Birthday America

America led the second, third, and now fourth industrial revolutions. Each brought about positive change and greater prosperity, further instilling the notion of pulling oneself up by the bootstraps.

The problem is that the great wealth created from owning those revolutions was outside the grasp of Main Street, except for the computer/Internet phase, which sparked a mania of sorts, but in the grand scheme of things, every little bit of stock market ownership counts.

The “Retail Investor Revolution” sparked in 2020 has rewarded Main Street in ways that were historically inconceivable.

In 2020, Households owned $150 billion in stocks; today, that figure is more than $600 billion. Here’s the rub: that’s still only 1% of the total stock market.

The folks who are 100% the customers of goods and services that fuel the stock market are finally taking a piece of the action for themselves. It upsets the apple cart, which invites shenanigans, but if you are serious about changing your life for the long run, look at the dark blue part of the chart below.

The top 1% took lumps but never wavered in their quest to have it all through the stock market.

As we prepare to celebrate 250 years of the greatest social experiment ever, be thankful you live in a nation with so much entrepreneurship, innovation, and determination to be great.

Today’s Session

It was a solid jobs report that came in below consensus, but key components, including wages, moved in the right direction.

I would still like to see stronger labor force participation.

The market likes that this number gives the Fed room to avoid hiking.  Before the report, the CME Fedwatch saw a 31% chance of a hike at the next meeting.  Now the number is 18%.  I continue to say there will be zero rate hikes this year.

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