Stressed ambiguity might describe areas challenged or controversial over this otherwise-complacent 'Dog Days of Summer' August weekend.

Whether it's the bipolar / bifurcated chronic rangebound high-level S&P, with a broad market desperately trying to firm really from oversold not overbought; in relation to the jammed-expensive S&P and NDX 'grand dames; or challenges in the pandemic realm, where the degree of vaccine use and efficacy debates persist; to Afghanistan with a desperate response to a likely strategic mistake.

I explored both the Afghan situation (minimal influence if any on markets); as well as reflected on the Brown University's Medical Directors interview on the handling of the pandemic.

That means a lot when grasped (as it must be such as the Defense Dept. as it seems already) by Governments broadly; and impacts health prospects for basically all of us; and financial returns too (if in the right stocks benefiting). 

Meanwhile... Industrials, Financials, and related infrastructure beneficiaries are doing well. Consumer stocks have been up; but may be sensitive to the continuing slide in 'forward spending intentions' by the Univ. of Michigan latest surveys. I pointed this out a month ago; and though people are still spending a lot; it has a tone of winding-down a bit; which may also correlate with end of summer (pre-school) activity.

Plus home buying should largely be behind for this phase. Stocks in the stay-home dynamics, including mega-caps like Amazon, are generally softer just a bit. But as I envision (and so do most people hope) an end to the 'acute' part of the further wave of Covid / delta; the drama in a Peloton or Zoom are not likely to return as they did before; even if we have 'slight' cocooning ahead. I think that's the same story for Disney or even Netflix; neither attractive here.

The Covid 'numbers' are trending badly; but so many Americans got vaccines, that -- whether they work terrifically or less so -- the economy is 'sort of' opened. That means yes there will be spotty retreats that may benefit those stocks, but I would not bet on the past. Rather those hit by contracting near-term growth, like Delta Airlines or some of the others, ultimately get more desirable 'if' hit.

Those growth concerns are generally viewed as interim (dare i say transitory), because we presume better vaccines next year and finally treatments, after a year of inhibiting blockage by lack of Gov'ment funding and the perennial focus on vaccine prioritized over treatment. In this regard, whether it's Sorrento or more like it and other pharmas, we need 'effective' low-dose monoclonal antibodies.

In sum: Moderation persists; whether it's in stocks or unfortunately the slack attitude in some quarters about properly combating Covid; so that it becomes a chronic rather than acute disease (chronic can be adequately treated for the long-haul; and survivors of Covid are surprised to learn they have issues that will be troubling or at least perplexing for the long-haul indeed.

The stock market's long-haul with S&P at records and no significant shakeout since I called the low (lucky I guess) on March 23rd last year. I stated then it is not going to see a lower low and S&P does not and shall not. Big-caps that remain uncorrected remain vulnerable and will have difficulty getting-through this often-shaky time of year without further correction(s); not catastrophe.

Refusing to buckle yet again, the S&P finishes at a new record. The 'grind' as I call it continues; the economic backdrop is already pensive ahead of the Fed comments at the Jackson Hole meeting within the two weeks; and Consumer Sentiment remains apprehensive about spending (hah); while spending more.

We don't know how transitory inflation will be, solely because of Covid. Other than that we'd not be too optimistic; since wage pressures can sort of cascade into costs whether it be products, food or services. There was a mood shift in the past week as people recognize growth can be inhibited ... and that's fine.

My view has been the 'elongated' recovery with the Covid / delta (even if not more careful lambda) ... these interrupt the growth that has been prescribed by both the simply restoration of 'normal' life (over time) and infrastructure bill ramifications. Presuming better Covid vaccines and treatments in 2022; there will be a gradual relaxation of restrictions (official or otherwise) and recovery.

Hence we believe later 2022 and almost definitely 2023 will show solid growth but without 'meaningful' interest rate increases. By that I mean the market will give higher rates a nod; but the economy won't find nominal increases inhibit activity really at all. What can inhibit activity is Covid; and today China news of another major port lock-down is a good example of interrupting activity.

Technically our insight of 'neutrality' to this market hasn't been exciting, but it has been helpful I'm hoping; especially if it deterred folks from short-selling; a bearish approach that I haven't thought worthy even when we get shakeouts, as they are comparatively brief.

And that's partially because internals already are corrected (hence an unusual combination of oversold Oscillator readings along with record high Index level readings). Too many permabears are almost delirious with negativity and still give extremely bearish outlooks, when that's not a correct read of markets.

So it was in the beginning of the year; after seasonal reinvestment money, it was expected that funds would come out starting in early February. They did; while the heavy lifting provided a 'charade' (false strength) covering the selling that was part of my early year forecast (which left the S&P barely moving for a couple months while I was in-hospital; as most action was elsewhere than the Indexes; since then S&P did what we called a 'grind higher' and it's stretched).

I remain anxious about the rest of August and September; but why not. Easily you can get a correction with the Fed titillating more about 'tapering', including at Jackson Hole. That will be described as a 'catalyst' if we get a break; but it's not such a huge deal; since so much is already corrected.

Now 'if' you got a real PE cut on S&P (slowing growth); sure that's the case of high inflation / slower growth; and that traditionally kills valuation. That's really the formula to get a 20% or more decline when combined with higher interest rates, but it has to happen a) with the big-cap momentum stocks cracking lots harder than we've seen; b) with the Fed moving and c) peak-Covid fails to get here in a timely fashion. So yes, it's tough to get a Fed hike, amid slow growth and raging pandemic. See what I mean; shakeouts but catastrophe unlikely.