Market Briefing For Friday, Apr. 30

The ambiguity of how the United States treats the 'One China' policy has sort of run its course. Beijing seems hell-bent on wanting to seize Taiwan one way or the other. While most tacticians believe China is about 5 years from having sufficient naval forces to really do it; that feigns accidents and is no assurance something doesn't fail along the way. Such as a South China Sea 'clash', or a Chinese Captain that goes rogue and fires at a US Navy warship making one of the fairly frequent 'freedom of navigation' cruises thru the Taiwan Straits.

Overall .. little has changed; and much hinges on the embrace of the platform (with more specifics) that President Biden outlined. As Senator Romney said today; the amount of spending is such that 'if it was a credit card and I was in my school years, Dad would be taking my credit card away' (or close to that).

Clearly this market is running on liquidity; on masking distribution that's been ongoing in a number of stocks; by concentrating active interest in just enough to hold-up the Senior Indexes, which are capitalization (not price) weighted.

Years ago I used the term 'distribution under-cover of a strong S&P umbrella', and I think that applied this year. It doesn't deny correction, while mitigates at least somewhat, against a horrendous decline (although we know that once a decline gets going, the mood can shift swiftly, with after-the-fact panic... but of course we don't know that will occur, only that lots of folks are fearful of it).

In sum: a market opens up post-Biden; and pulled back a bit; as expected. It's not a rout by any definition; and breadth remains nearly dead-even. That's about as bifurcated as markets can be; supporting my definition of this action.

Earnings results are somewhat mixed when it comes to regulatory risk (labor issue about classifying digital workers as 'employees' with benefits); Federal rules on employment can be changed; but probably requires Congress with it so that's not so easy. I suppose Uber is an example one can debate whether independent contractors or employees. Others from Amazon to Apple; have a lot of remote workers; but most are considered employees (even part time). A number of semiconductor and cloud stocks were generally defensive.

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