I really liked those bucolic sessions, where the market traded higher but not much on the surface, while pockets within the market were going parabolic. Yesterday, the overall market breadth was solid, with more than 60% of the S&P 500, S&P 400, and S&P 600 closing in the green. Market breadth was impressive across the board.

The S&P 500 (SPX) closed at a new high, but the index is still outside the trading channel that began in late 2022 and has a ton of room to the top of that channel. Telecommunication Services led the charge.

Big News Drivers

For most of the session, SanDisk (SNDK) was lapping the rest of the market, then, in the two o'clock hour, news broke that Silver Lake made a bid for Workday (WDAY). Meanwhile, SNDK held an investor conference that blew everyone away.

SNDK Highlights:

• Increased Total Addressable Market (TAM)
• Monster margins above 80%
• Developments in High Bandwidth Flash (HBF)

I'm surprised the stock wasn't even higher.

Shares of Workday (WDAY) erupted higher, and then trading was halted.

Software (IGPT) names came to life – big time. This will be a major focus today.

Momentum

Momentum (MTUM) continues to try to gain traction. Getting above the 50-day moving average would draw a lot of fence-sitters. Meanwhile, quality names are acting great as well. Right now, there is something for everyone.

Factors

Today’s Session

This week, polls, surveys, and even prediction markets got several elections across the nation completely wrong.  There were extenuating circumstances, including turnout and maybe party apparatus putting a finger on the scale in a couple of contests. Still, the main point is human behavior is often very different than actions.  I think the stock market gets it right more so than surveys.  Consumer sentiment is in free fall (has never recovered from the 2000 peak), but consumer stocks are higher.

This morning retail sales came in below consensus, but even this isn’t a clear picture of spending.  Several factors, including Prime Day in June instead of July, sent the number lower.  By the way, JP Morgan and Bank of America called for a negative number.

A big jump in clothing and miscellaneous (very discretionary) was noticeable, along with a rare decline in non-store (internet).

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