Lukewarm data - continues the basic 'set-up' for the Fed to ease rates. It's in the mix, and the market sort of acting like it wants to go higher reflects that.

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Of course, Indices are on the threshold of record highs, and the good news is that it's with 'less' bifurcation that previous 2024 treks that were a bit contrived via concentration in AI and a few mega-caps that allowed the 'perception' of highs for the Averages. Most of the market lagged, and is starting to look better, but it's getting into late August which typically evolves into alternating at best.

So, aside the Fed, the geopolitical risks have not eased. And I don't disagree with historical comparisons of years after this kind of recent activity being just grinding higher. I emphasize that 25 basis points cut is 'baked-into' the picture now, 50 bp is not. If any of this is an outlier it doesn't really matter, since the move was already telegraphed as a few Fed-heads suggested that. Perhaps Jackson Hole clarifies more. Generally we've said all year you couldn't crash the market beyond shakeouts, because it's an election year with most stocks 'pre-crashed' (doing nothing much for a couple years), especially small-caps.

The known concerns are out there, the Fed is not one unless they backtrack. But still there is the opportunity not to reward those chasing mega-caps higher while you can see nominal shifts into smaller-cap stocks (also normal when or if you get into a lower interest rate environment, plus fund re-balancing too).

Today Israel agreed to accept a U.S.-pressured ceasefire deal, while Hamas, at least so far, holds-out for permanent ceasefire. Hard to digest odds of that. 

As to Ukraine, some concern is out there as Germany retreats 'on the surface' from funding further military aid. That story may be exaggerated by media, as Berlin sources say Germany intends paying for that aid, with 'frozen Russian funds', which 'if so' means the assistance continues.

Remember there is at least one notable gap under the S&P (SPY), the market is projecting last week's steady recovery effort. At this point sure, it 'can' go higher, but it is extended and short-term exhausted if it doesn't get some sort of catalyst to encourage greater trader commitment for a seasonally slow time. Obviously, this month is more 'news-active', politics in the U.S. probably have less impact on markets than some think, while globally things matter more than the market's think at times. Oil is neutral during this.

Market X-ray: 

These next two weeks take us into peak Hurricane Season, the prospect of make it or break it in Gaza ceasefire talks, and a possibility of some breakthrough in Ukraine/Russia, but that's very fluid.

Meanwhile volume is typically the year's slowest during this time, but not this year. Lots of activity and probably resumes a roller-coaster, even if is a set-up for a solid year of smaller-cap gains in 2025, while the big-caps are generally fully priced with relatively limited upside.

A rush of big-cap buying left most small-caps still pretty neutral. Our AMD did a merger which hopefully enables their AI progress (in the Server space, but mostly to acquire the software engineers of the other firm it appears). And so far so good...just holding remaining portions. Eventually over 200/share again.

When you look at the charts you see 'Summation' finally reflecting the 'turn' as breadth improves... but keep in mind it's still a seasonally choppy time, with of course the broad preceding skepticism among traders helping our upside. So great but not to get too excited about, a lot of risk factors persist, as the world is not solely focused on the market, especially when it comes to geopolitics.

In all likelihood, S&P will make it to record highs, while the New York Composite gains infer return to underlying broadening, absent which it's been a charade in regards to 'narrow-based' rallying giving a false impression of record highs. That of course is the 'bifurcation' we've talked of all year.

Bottom-line: 

Waiting for Jackson Hole and possible a selling squall if news is good, since it's priced in. Variable on geopolitics are sort of obvious by now.

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