Challenges to market stability - at least as applies to the S&P and NDX, are slightly reminiscent of 'The Matrix'. A number of problems and opportunities in a sense clash. I'm having a little fun with this, as otherwise there is an impossible ordeal that doesn't result in a definitive answer about the greatest question many have at this point about Covid and the vaccines that were purported to prevent it.

Toss into the Matrix the 'antitrust' Facebook challenge; the Tesla controversy, and Elon's 'Metaverse'; along with dexterity involved in sorting an Afghanistan withdrawal that tries to salvage some humanity from what was a cold-hearted sort of hurried departure... and you are left with a cluster.. (not of almonds).

Executive summary:

• Market impressively held traction; but August Expiration was a factor too; I suspect efforts to build-upon this 'relief' rally next week; then we'll see;
• Afghanistan is not really stabilized and may be deteriorating as reports increase of brutality imposed by Taliban; especially outside of Kabul;
• President Biden left open the possibility of using American Troops to go outside the narrow Kabul Airport perimeter to extract citizens or SIV's who cannot make it to the Airport; nothing said about all in other cities (late reports say this 'is' happening; although the British did it first then the US apparently also dispatched helicopters .. details pending);
• At least Biden extended commitment of refuge to those who helped us; and made promises that had Sec'y. of State Blinken looking a bit pale;
• Challenges to accomplish all this leave us wondering how to do it; we think the presence of the 82nd Airborne Commander 'now' in-charge is a hint of the capabilities being prepared to help extract them as needed;
• How would General Patton have handled this situation isn't in doubt; he'd guardedly and then more aggressively ventured beyond a perimeter and go to identified locations to pick-up valid escapees; and engage Taliban with armed force if necessary; while reminding them they agreed to this;
• There's no doubt we were leaving Afghanistan; but to leave without honor is the issue; and that can be salvaged by effecting wide/swift evacuation;
• Hopefully it's shifting as of late Friday; with reports of US Army helicopters flying 'into' Kabul to airlift Americans from locations to the airport; ideally this will expand to other cities in Afghanistan; with risks rising of conflict, especially with the Taliban well-armed with American weapons (hopefully no terrorist pilots are able to fly the captured Black Hawks);
• U.S. markets have sort of become a safe-haven trade with China's tech crackdown continuing; primarily to sustain the CCP more than harm the markets; which they value but (catch 22) disdain heavy concentration of wealth in the hands of what they see as Chinese versions of oligarchs;
• Late Friday the Kansas City Fed, which sponsors the Jackson Hole meet, cancelled the in-person gathering for next week, due to Covid; there will be a virtual version; essentially a Zoom call;
• Amazing that it took Chairman Powell deciding to do his speech virtually, before they'd cancel the mostly-symbolic gathering; but at the last minute when it's been evident all month that we were not near peak Covid ?;
• The S&P should attempt to extend next week (grinding around); whether or not we get a likely initial dip first, because it's post-Expiration; might depend on whether the NYSE & NASDAQ are fully open; and trading of course may vary even if they are with New York mostly deserted;
• The latest 'wild card' will be armed hostilities between US or even British troops engaging Taliban; or reverse; knowing that some in the US would itch to respond (Biden said so); they should know better, but do they?;
• 2021's unusual combination of crisis and disease and growth slowdowns is not only challenging, but probably confusing to government leaders not necessarily expert at much beyond politics; so that's a risk;
• Lest we forget; significant implications of 'Hurricane Henri'; moving up the Coast; models aiming it at anywhere from New York City to Boston; at the moment looks like Fire Island and Montauk are center-line targets;
• This storm could be a catalyst of problems for markets, 'if' it directly hits Lower Manhattan (ie: NY Federal Reserve Bank more key than NYSE), or Washington DC (at the moment DC appears likely brushed as West of track; however the storm has shifted track slightly inland from earlier);
• So is the 'world on the brink' of something colossal? Time will tell.

Bottom line: nothing much has changed with markets. But the world's going through a lot; and it's not just the divisions in the United States over politics or Covid vaccines and masks, or for that matter the 'escape from Afghanistan' or dare we mention recovering from a Hurricane about to hit the Northeast US?

So the world is teetering on the brink. But on the brink of what? Probably not war with China; though the tensions around especially Taiwan prevail (China's in less great shape to fight than some military officials think; mostly because a huge wave of Covid / delta is sweeping over China; though little reported).

The 'brink' might be triggered by a single illiterate Taliban confronting a Marine trying to go beyond the airport perimeter to rescue Americans or others. We'd shoot back; it could escalate; and if Biden decided to retrieve his perceived or lost honor (or enhance it if one believes the extraction plan was perfect .. that is hardly the case of course), we could find ourselves back into a hot war.

After Friday's close; GM expanded its recall to include all Chevy Bolt models, and the only thing surprising is that it didn't occur sooner. The shares are off on news that's already know; the recall just formalizes the poor management of batteries and range (or whatever is triggering the 'occasional' fires). Once it was warned that you shouldn't park it 'unintended' or in a garage (yup), clearly everyone knew the Bolt shouldn't be on the road like that.

What may matter more is whether they've solved the issue (ideally the recall is affirming that they do have a 'fix') or whether it will impact (no pun intended) new EV models coming out.

This will cost GM probably over a Billion dollars to fix. We don't own GM; but liked it around 31 awhile back. If clobbered to levels like that it will impact the market a bit, but we might get interested on the buy side. Not for the moment.

Some of the China default stories are a bit excessive. However we mentioned on a few occasions that there's a 'real estate bubble' in their big cities (a term of 'ghost' buildings was coined) so while there are major moves to modernize everywhere (hurriedly in some cases); the credibility of Beijing's government has been frustrating for the Chinese people; and part of why they desperately have struggled to move funds abroad where they can (probably the largest of non-criminal or dubious holders of Bitcoin).

Global markets will continue under-performing for now; the U.S. market much too sanguine about the prospects for Fed tapering; but also understandable in the sense that rising Covid / delta dissuades the Fed doing much 'for now'. In that regard we pretty much could write the script for virtual Jackson Hole; so aside a few hawkish comments from speakers; the Chairman's remarks must reflect the reality of dynamic growth forestalled due to the pandemic.

I ponder if Chairman Powell will be so bold as to use the word 'stagflation' in his comments; although it would be justified. Nevertheless the Dollar is fairly firm in the face of the 'emerging markets' malaise; as a 'safe haven' because of tradition, due to China's 'deflation', or other actors. Too many disparage it.

FDA aims to give full regulatory approval to the Pfizer vaccine on Monday or Tuesday. I doubt it means much to the stock other than a 'pop', but PFE's got approved before Moderna's, so should be reviewed first, plus reportedly has fewer reactions, but shorter durability at least as relates to the delta variant.

Besides the pressure to get it approved before Labor Day (Fauci & Company in particular); note they'll make a big deal out of the 'full' approval and remain calm about EUA they gave to Regeneron's Res-Cov (monoclonal antibody drug) a couple weeks ago. Until a better treatment appears - from Sorrento as a prospect - that's there if anyone gets sick and thus too late for vaccines. As to Sorrento's new vaccine; sooner they can prepare a submission the better.

By the way, at last CDC is setting up the Center for Forecasting and Outbreak Analytics to trace new outbreaks and analyze how they might unfold. It'll serve as the 'the Country’s first government-wide public health forecasting center' (for Covid); and should finally consolidate prior haphazard data collection.

A few states were worse than others; and about 25 states don't report data if the patient isn't hospitalized. As it is, because of home tests and recovery for most, the presumption is the number of Covid cases 'not hospitalized' is far higher than the official numbers, and has been for a long time. Some contend hospitals overstated Covid patients; well that's generally nonsense and totally a separate point. I'm referring to those tests at homes or doctors never giving that data to the CDC or even local or state health departments. This will help, beyond the data John Hopkins already tracks.

Again; markets may be on the brink of a more serious shakeout but with S&P strength as decent as it was (with satisfactory breadth too) on Friday; getting a break without a rebound (from any early-week selling) would be unusual.