Whether 'stocks are overpriced' or not - seems to be a big question; aside clear concerns (which we've consistently voiced) about Covid's resurgence as the primary determinant of near-term market movements; Fed policy restraint; as well as people retrenching a bit from the recent spending extravaganzas.

'Stocks' are not particularly overpriced; though the NDX and S&P are on their own right. Hence the core of our argument for shakeouts and perhaps now a much deserved correction in 'such' areas; while the already-downtrodden just snagnate, erode a bit, or even rally where they have unique fundamentals (or especially where they have applicability to resolving the Covid dilemma).

Executive summary:

• Moderation of consumer exuberance is already occurring; some of it just relates to the end of seasonal spending (like trips and housing which will peak in mid-Summer even without any crisis backdrop such as now);
• Hence Consumer Sentiment 'presently' was high most recently; while the data for 'forward' planned spending was declining notably for weeks now;
• Oil had a great month; more so than the stocks; which generally dropped but was responsible for leading the upside on a couple key rebounds;
• 'Dog Days of Summer' should base upon us; and have been for small and other stocks not just for weeks; but to an extent for months;
• That reinforces the view of how difficult it is to 'crash' markets overall; as it's S&P and NDX (FANG + momentum types) extended so far; hence if those tanks (some insanely expensive) little broad impact might result;
• Remember our call was for stabilization of S&P into or around early July, then by mid-month getting rocky; this defensive action (with potential to rise, and more risk of decline, but not catastrophe) persists into August;
• As to Chinese stocks, they rebounded when Beijing gave their 'blessing' to listing shares in New York; while the U.S. responded (sort of) saying it wasn't appropriate to do IPO's here when full accounting isn't available;
• We're 'not' in a global financial crisis; but we are failing the 'synchronized global recovery', due to the worldwide pandemic;
• The overriding recovery on a global basis was helpful as everyone saw during the 'eye' of what I'd called a 'hurricane'; so now the 'other side of the storm' could suppress the revival somewhat; and allow the Fed some luxury by making inflation 'appear' to be transitory (outside of wages);
• Most global players taking down forward guidance numbers based on where costs are, demand expected to contract; most relates to Covid;
• Many criticized Texas Instruments for great Q2 numbers and guidance very soft for Q3; however I argued they were first to be candid about it; since then most players have moderated their expectations;
• Among these, even Apple reduced their outlook; Amazon will do great if we are back into a 'retrenched' cocoon lifestyle (nobody wants that) and others like Facebook are pouting because of Apple's 'anti-ad-tracking' (a feature that happens to be core to Facebook's marketing);
• Incidentally this same 'security feature' in iPhones costs Apple money as well; since it might correlate to fewer sales in the App Store; although I'm thinking they had expected the opposite result (more buying from them);
• Disney is requiring workers (not worried about a Union issue) vaccinated fully; Orange County back to masks; Governor opposition or not so far;
• Notable big divergences in Covid outcomes: England, where masses of soccer (their football) fans 'failed' to contract Covid, suggests the U.K. is closer to 'herd immunity' than broadly thought; hence the travel opening (that's hard to pinpoint but seems to have been a contributing factor);
• Australia has had a hard lock-down and that did not result in reduction of cases, which is hard to understand; but sort of a mirror image contrasted to the Great Britain's apparent reversal;
• In the U.S.A. the FDA 'just' expanded Regeneron's 'monoclonal antibody' (it's about time) EUA to include prevention of disease; we've noted along the way that MaB's are good in early stages; as salvage recovery efforts; but also as prophylactic weapons against Covid /Delta;
• Regeneron's cocktail is a two-antibody variation (some rumors tied them to Sorrento at one time; though nothing more has been heard about that) and is still the large dose which President Trump received; but which was not generally distributed by hospitals even when it became available, due in-part to labor-intensive infusions and lack of patient education (which is still a factor with regard to monoclonal antibodies, shamefully on FDA);
• Broader use of MaB's is a good development and for those reluctant now to get vaccinated; or for whom breakthrough cases occur 'anyway'; this is likely to become a 'turn-to' treatment choice as it's better understood;
• Sorrento will benefit in a big way if 'their' monoclonal antibodies prove as efficacious as they have proclaimed (for too long it seems) in pending trial results; which interestingly should arrive at 'data revelation' almost at any time later in August, based on the time-line the Company outlined in their June 22nd Press Release (refer to their website if you'd like to review it; just click under 'investors' to see all their official releases);
• Presumably the once seemingly-outlandish 'cure' claims by Sorrento's Dr. Ji (CEO), have been put to the test (trials) and outcomes need to be clear pretty much now, given the wave of Covid / Delta upon the world; which it seems will 'blow over' in some countries while catastrophic in others;
• At this point 'nose drops' or pill approaches appear more urgent in a way than vaccines, given how MaB's work immediately without weeks needed to build immunity; again proper ones kill the virus essentially directly;
• Further controversy prevails about long-term risks of vaccines especially in children (endothelial cell and other issues); whereas monoclonal drugs can simply be available to give upon any symptoms; vaccinated or not;
• Bottom-line: Covid will be around for years in various forms; hence both vaccines (preferably better ones) and (better) monoclonal antibody drugs and straight antiviral drugs, as well as affordable rapid 'tests' are needed.

In sum: July was mixed; defensive in some areas; neutral in others; limited or not meaningful change in the grind of the S&P, which retreated from records.