Coming down to Earth was the idea for S&P (SPX) last year and this year. Now, it is reporting, as all sorts of stocks are either languishing or being pummeled by reality gasps, that has analysts wondering if valuations were too high before a compelled Q2 release and guidance that reflects inflation. No kidding.

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It's not confusing, it's the reporting of data related to America's largest firms in global business environments, simply compelled to report what's already been seen, and what made sense to anticipate for more than a year. It's not merely a Walmart (WMT) that over-ordered discretionary spending items and has a glut now, because everyone knew they had margin squeezes for several reasons, one of which required offloading inventory with discounts, hence lower margins.

By the way it's not astonishing that a market is focused on Walmart, Costco or similar as the grasping of most people having to buy what they need, not of course merely what they want, in an inflationary era. It's also a very basic note I shared this morning in this on-hold defensive market ahead of the Fed 'call'.

It's basically 'an absence of bids' since with this sloppy pattern expected. (It was almost surprising that the S&P held together as well as it did beyond the projected late-June into early-mid July rebound.) Furthermore the overall S&P backdrop is complicated by many stocks have decent earnings reports that of course are overshadowed by those involved in Retail that are creamed, while the Ukraine War continues, with Russia giving two-faced comments about the 'energy security' they provide Europe, while actually inhibiting Gas, attacking Odessa while saying it's safe to ship 'grain', and of course continuing attacks.

By the way, Australia's PM met her equivalent from Communist China, and it seems like they're talking nicer about trade and relations, after really hot talk from the Chinese in recent months. That's good, as Canberra seems to have made no known concessions to Beijing as relates to military preparedness or the acquisition of American submarines and missile systems not discussed.

In-sum: 

One almost welcomes the negative action and mediocre guidance. Not just because we expected that, along with 'turbulence' (air pockets take the market's flights both up and down sometimes in fairly-rapid fashion), but it takes the edge off the hawkish rationale of the Fed going into the decision we will hear all about Wednesday, presumably a 75 basis point Fed Funds hike.

Combine the so-called 'missed' numbers by Alphabet (GOOGL), Microsoft (MSFT) or others (I say so-called because they weren't really missed by reasonable to expect in this inflationary mixed-case environment).. combine with slightly soft Oil prices (oscillating after an expected retreat), and the Fed has lots of their logic for hawkish zealotry undermined or removed, even as they and others in Government contributed to the backdrop that allowed excess inflation from its start to accelerate over the last couple years. They won't claw-back wages for that matter (can't really, but can do layoffs), nor will Oil crater to truly low level prices (global demand will stay pretty solid), but everything is still 'fluid'.

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