Tactical finessing worked out well this past week; particularly for the S&P and to a degree for the broader market as well. The week starting Tuesday is short and likely shakier.

Market breadth has been improving overall (just not Friday); and that's the key to getting prices higher in an Index sense going forward; at least primarily. At the moment however, there's still my belief that this past week was favorable response to the FOMC decision (purge then surge); and up into Expiration; as well as relative 'calm' prevailing in the afternoon of the last day. There is also 'S&P re-balancing', which while it can persist to Quarter's end; is mostly now.

At this point we should be beyond 'interest rate anxiety' with respect to a market response; however we're not past the Fed 'higher for longer' status, and impacts on certain industries, not to mention commercial property and REIT defaults etc.

Most large developers are financing retail buyers internally (as was expanded upon at dinner last night by a friend putting deals together) but otherwise he's agreeing with me about the problems especially for 'Class B' office space.

There are also 'smaller / regional' bank concerns still; which I think is a reason the Fed 'stayed pat', even though their Statement was fairly hawkish. Rather not rock-the-boat too much; especially with dubious talk even about Goldman.

In sum: The Bulls took charge of the past week's (really month's) advance; as FOMC took hold; and yes that doesn't obviate a retest before we possibly go to even higher levels. 

Next week could unfold in a rotational way; while this past week generally was projected as 'up into FOMC; a drop with a quick rebound ahead into Quarterly Expiration'; then sort of 'calmly fade' ahead of a three-day holiday weekend.

The market 'is' climbing a 'wall of worry'; so a shakeout would only temporarily embolden the bears, while the reality is that will be a time to envision upside.

Valuation metrics are certainly high for most mega-cap stocks; which is why it is imperative that breadth improve in mid-and-small cap sectors to offset that. None of it prevents a shakeout between now and the next upward swing; and it could come as swiftly as next week, before or after another extension effort.

I'm not convinced there won't be rocky times ahead; too many variables. But if those unfold in a more methodical ways - which is what markets tend to do if of course they are climbing a wall of worry - then we get try to move up; get a shakeout and then have a rally into early-mid July. And then we'll see.

Of course Oil price action, Dollar weakness, relaxation of Chinese tensions (or not), the events surround the Ukraine war; and the 'draining reserves' as an issue showing lower systemwide deposits and so on, which I noted just a day or two ago, and for some reason media reported after Friday's close. It's probably to soften the notice of banking issues still; minimized by the timing of the comments today. But I do suspect one reason the Fed 'paused' rate hikes this week was indeed to temper the prospects of further bank problems.

Bottom line: Tactically the week just past worked out very well; as projected in a number of ways. However, the suspicion has been of a shakeout ensuing in the wake of Quarterly Expiration, and that remains a prospect to consider.

Our view continues to suspect (absent terrible news) any such shakeout will be a bullish decline; meaning money managers will be excited to try to find a few stocks to buy, not sell, since most missed the early upside. That's doubly so for smaller stocks that were (or are) anticipating a stronger 2nd half of '23.

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Market Briefing For Thursday, June 15
Market Briefing For Wednesday, June 14
Market Briefing For Tuesday, June 13