Resilience to decline is what Monday's move was primarily about.

Pexels

As to stocks, not much, on-hold ahead of CPI etc. Apple was down and after its CFO resigned, Tesla got hit. Impressive that the S&P held together despite those two mega-caps getting hit. Now if they washout and rebound, S&P too.

In-sum: 

The inflation numbers, both CPI and PPI are on the horizon, the rest is mostly speculation on events, including geopolitical ones. Russia is acting a bit more erratic than usual, so that becomes a problem. U.S. Marines on the way (or arrived) to be posted on commercial carriers in the Persian Gulf does increase the risk of confrontation, but may be the only way to handle Iran that over the weekend did occupy two small islands (that the UAE claims) nearby.

Tuesday should see some jockeying early and then try to lift so the S&P is in a pretty good spot to rally 'if' the CPI number is friendly. It will then need to be.

Speaking of the CPI... there isn't really much contraction in pricing, but you're at a point where Washington wants to see softer economic contractions and a disinflationary pace, although that's virtually impossible as Food & Fuel costs are still (or again) on the ascent.

So, the focus will be on 'core' CPI, which probably did drop a notch, while the Oil/Gasoline/Food costs are really the 'core' for the normal American family.

If anything about this was interesting today, it might be that Oil prices are high but pretty-much ignored the Saudi's talking of extended Production cuts even beyond September, the sudden new 'leak' in a pipeline carrying Russian Oil to Northern Europe, and also Ukraine's drone-torpedoing (sort of like a torpedo) of the Russian tanker in the Black Sea (I do get why the US would be pleased at that as), that tanker typically is carrying Jet Fuel to Syria, where fighter jets of Russia have been harrassing American drones, and close to fighting USAF jets. It's a touchy time, and not just off of the Aleutian Islands in Alaska.

Bottom-line: 

several of the tech leaders have broken (as suspect overdue) at least the very extended high level trends, so imagine a set-up for S&P higher, if they like the CPI. After that you could have downside follow-through sort of snowball, but we're not in a negative cascading situation.

It's just doggy August and you're going to get these alternating swings, with a larger risk in the uncorrected mega-caps more than average stocks sagging. I would have to say that that stability or resiliance of S&P in the face of the top market-cap leaders being off 10% or so from their highs, is encouraging. Also it reinforces my thought about money managers spreading-out interest with a serious desire to achieve performance in 2023's 2nd half or position for 2024, since they generally were excessively negative in the first half of this year.

The 'crash' in average stocks was last year, not this year, which doesn't mean all this bodes well for the S&P this month or next particularly, but does explain 'why' you don't get some sort of all-encompassing catastrophe some forecast, based on things like debt. That is an issue, but it's not new and you sure can't time a market shakeout based on that type of macro consideration. However if you get a big shakeout, it will be blamed on yields, not the overall debt, but I continue to believe Washington really 'wants' inflation at whatever citizens will handle, because they can repay dept with depreciated 'Greenbacks'.

More By This Author:

Market Briefing For Monday, Aug. 7
Market Briefing For Wednesday, August 2
Market Briefing For Tuesday, August 1