It is tempting to disregard the markets within the subsequent two weeks, historically among the many lightest buying and selling days of the yr. However there’s nonetheless a strong rally occurring. CNBC’s Robert Hum tells me each the S & P 500 and Nasdaq Composite are up eight straight periods – the longest advances since November of final yr for the S & P 500 and December for the Nasdaq. The S & P has risen 7% over the past eight buying and selling days. That may be its strongest 8-day win streak for the reason that practically 12% rally in March 2003. One other constructive issue: market breadth (advancing vs. declining shares) has been on a tear. Lowry, the nation’s oldest technical evaluation service, famous on Friday that the NYSE advance/decline line hit an all-time excessive on August 15. That is without doubt one of the finest technical alerts you will get. It is arduous to argue there’s a market prime with the advance/decline line at an all-time excessive. Markets now It is taking place once more Monday: 2-1 advancing to declining shares on the NYSE, and the S & P 500 forward 25 factors. Tech is lagging however, elsewhere, defensive shares are sturdy, with actual property, well being care, and client staples main. The tech rally seems to have stalled out. Massive cap tech is combined at the moment, with explicit weak spot in semis. There’s a pretty large dispersion this month amongst huge cap tech, with Meta and Nvidia up, Apple flattish, and Alphabet and Amazon each down in mid-single digits. Megacap tech this month Meta + 11.2% NVIDIA +6.0% Apple +1.0% Alphabet -3.6% Amazon -5.0% The place are we? On the constructive facet, the gentle touchdown situation remains to be intact: financial information reveals some slowing however job development IS nonetheless sturdy, the Fed is predicted to start slicing charges in a number of weeks and earnings have been remarkably secure, even when some firms are experiencing pricing strain. Maybe most significantly, the current volatility in early August triggered a major unwind of many crowded trades, together with elements of the yen carry commerce , which will assist make markets rather less unstable. Market positives Financial information supportive of development Fed easing anticipated Earnings secure Partial unwind of crowded trades On the unfavorable facet, aside from the week after Christmas, the subsequent two weeks are the lightest quantity days of the yr, when quantity usually drops 20% under common. Additionally, September-October stay among the many worst months of the yr. Lastly though earnings development expectations stays sturdy at roughly 10% this yr and 15% subsequent yr, valuations are nonetheless very excessive, leaving little room for error. Market negatives Finish of August: Historically mild quantity September-October tough months Valuations excessive: little room for error
