Market Briefing For Wednesday, June 10

Executive summary:

• Powell on-the-economy 'now' is still likely a plus, not a negative; as we go into the Fed's statement and news conference tomorrow.

• Despite believing today was simply an orthodox pause ahead of the Fed, it was not a solid decline, just the myriad of small stocks paused, while stocks like AMD (AMD) did especially well (taking business from Intel (INTC) some think, but that is not new and was part of the basis of our 16-17 entry as 'pick of the year' for 2019 just ahead of Christmas 2018 (it can move toward or over 60).

• Apple (AAPL), Facebook (FB), AMD and a handful of others create the dominant theme; with a few other sectors chiming-in and pausing; such as Oils and Banks; so those latter get removed as 'fuel' for the overall rally, at least for now.

• Small-cap sectors are mixed; our little 'revived' speculative attention on lens maker LightPath (LPTH) (especially doing well with infrared, back orders, growing in every way with a new CEO too); which today move above 3 as expected.

• While our short-term target was raised to 3-3.50, I am suspecting even more if the new CEO and Global Sales Manager deliver solid new orders and if they can keep up with fulfillment of rising demand for infrared and so on).

• Big-tech at record valuations with plunging EPS estimates is hilarious; and a part of why most money managers totally missed this year's huge move; at the same time little stocks like LightPath would have to triple at least to be in line with comparable revenue growth tech stocks (LPTH is still under the radar of most investors and analysts which makes them potential buyers not sellers, since what has happened is a turnover of ownership structure too).

• There are divergences in this market and we recognize that; so far that all is working to the advantage of the under-owned more than the over-extended.

In-sum: the S&P is behaving normally for a day ahead of the FOMC statement.

Daily action: was on-hold pre-Fed, while some stocks advanced nicely anyway and that made their moves perhaps show-up on percentage-gain summaries, so in a sense could direct growing awareness of their patterns and prospects.

Beneath a superficial glance at a DJIA of nearly 300 and an S&P off 25 handles; you've got a favorable NASDAQ, and a few stocks doing really well.

Part of what's going on the money managers don't like is the power of the move led by thousands of small investors jumping into a lot of small-cap stocks; to the dismay of the Street establishment that thinks they could divine a retest of the March lows. They are suffering from FOMO and 'fighting the Fed'.

Yes we think all this leads to a correction, but within a favorable framework as we view it for now, and see this just as a normal -even healthy- high level pre-Fed consolidation.

And we suspect even the S&P has a post-Fed shuffle thrust still in the wings, which might be seen later this week or next, even if preceding more of a shakeout to which it's entitled. Of course there can be chop around the Fed statement time, and sometimes fairly violently, though not necessarily this time.