Underwhelming neutrality - greeted this first post-holiday session. However it was constructive with regard to a handful of stocks, or special situation. One was a slight BigBear.ai bounce, seems poised to emerge from their shadows (appropriate considering how secretive much of their work really is), and we'd seen renewed optimism around Intel, in a mostly quiet Semiconductor zone.

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Of course, markets are really in fairly tight ranges ahead of CPI later this week and the NATO meeting in Washington, which precedes that starting tomorrow. It's not just about 'earnings' or the 'Fed', it's about psychology and politics too.

Hard to say, but S&P might get help from Fed Chairman Powell's Tuesday testimony on the Hills, as the market tries to draw strength where little exists, but a perception of a sooner-than-later Fed rate cut would certainly be helpful.

Perhaps a very significant development was Bloomberg's initiative to cover Medical School for John Hopkin's students (yes med school, not just hospital) with lower incomes (these days that means families less than 275k a year, as hard as that is for average Americans to imagine as borderline middle class). I can't assign a market value to this, but generosity from the wealthy to expand futures for students is really the kind of transformative more worth applauding.

Market X-ray:

The hurricane hit the Texas coast right where we thought likely, and fortunately did not build much strength for a single reason: it approached from overnight hours, and despite warm seas the absence of a hot sun helped to make things a little less horrendous than might have been. Plentiful rain for sure, however. And Oil prices eased a bit, with minimal refinery disruptions.

New intraday highs, but mixed closes on Monday (DJ down a bit, S&P up). It's not a contest for what mega-caps can do as much as whether broadening will overcome the tendency of money managers to concentrate in just a handful.

It might be Fed talk about 'normalization' this week that helps the smaller-cap stocks a bit more, but again we'll see what Powell has to see. I still suspect it is now a Fed worried about waiting too long rather than the inverse, hence the idea that while September makes sense for a rate cut, it might be July, which not only helps psychology, but is a bit more distant from the coming Election.

Meanwhile . . . the Boeing (BA) plea deal was sort of expected, given the nature of the Governmental relationship with Boeing, 'defense' and 'space' being key to that. Clearly many view the settlement as a slap on the wrist, particularly as it avoids a 'trial' scenario whereby witnesses could testify to all the problems we shared (by our own interpretation and that of engineers and pilots) about 737 Max problems from the start. And mentioned the 787 assembly issues also at the start (despite believing the Dreamliner to be a wonderful overall aircraft). In terms of the stock, bearish for years really, and there's not much change.

Bottom-line: 

Market players renew a close eye on corporate developments, such as earnings announcements, product launches, and strategic alliances, while Fed prospects influence stock values in terms of psychology.

Amidst this landscape of volatility for S&P, there's not much yet for small-caps but that could transition more, even as this week progresses. Meandering will likely persist early Tuesday, and be sensitive to Chairman Powell's remarks. I resist applying too much market effect on any decision President Biden might make, and of course he is resolute about continuing to run, at least for now. It is said by political pundits that this is a pivotal week regarding the candidacy, and is such a delicate topic given compassion for the man, fear of alternative leadership, as well as a reasonable thought about next-generation leadership perhaps in both parties, but of course that's not the prospect at the moment.

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