It is tempting to disregard the markets within the subsequent two weeks, historically among the many lightest buying and selling days of the 12 months. 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 12 months for the S & P 500 and December for the Nasdaq. The S & P has risen 7% over the previous eight buying and selling days. That may be its strongest eight-day win streak because the almost 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 New York Inventory Alternate advance/decline line hit an all-time excessive on Aug. 15. That is likely one of the greatest 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 shopper staples main. The tech rally seems to have stalled out. Huge-cap tech is blended at the moment, with explicit weak point in semis. There’s a pretty extensive dispersion this month amongst big-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 tender touchdown situation remains to be intact: Financial information exhibits some slowing however job development IS nonetheless sturdy, the Fed is anticipated to start slicing charges in a number of weeks and earnings have been remarkably steady, even when some firms are experiencing pricing strain. Maybe most significantly, the current volatility in early August induced a major unwind of many crowded trades, together with elements of the yen carry commerce , that will assist make markets rather less risky. Market positives Financial information supportive of development Fed easing anticipated Earnings steady Partial unwind of crowded trades On the detrimental facet, aside from the week after Christmas, the subsequent two weeks are the lightest quantity days of the 12 months, when quantity sometimes drops 20% beneath common. Additionally, September to October stay among the many worst months of the 12 months. Lastly, though earnings development expectations stay sturdy at roughly 10% this 12 months and 15% subsequent 12 months, valuations are nonetheless very excessive, leaving little room for error. Market negatives Finish of August: Historically gentle quantity September to October tough months Valuations excessive: little room for error
