E Market Briefing For Wednesday, Aug. 11

Derailing this market is a common topic, since the S&P continued just barely grinding-out repeated record highs. The irony is that the underlying market isn't off the tracks, but has been equivalent to a passenger train ride on rough tracks used by freights. (Experienced that in recent year on otherwise-deluxe Toronto-Montreal service, as tracks are shared.. same here in the U.S. often. Many 'better' fast trains in Europe have seamless and dedicated tracks.)

Train, Travel, Rails, Steel, Drive


So the point is the ride has been rough outside of the S&P Index (SPY), even today was a rotation to a degree, as Oils & Banks somewhat offset the heavy 'tech' sectors, as momentum leaders (FANG+) generally did not kick-in at all. Most spent the session on the defense.

So the question of derailing isn't as precise as looking at the S&P, as it would have been down if not for the much-maligned Oil stocks (USO), that I continue liking in a relative fashion and required to participate for this year's extension.

That leads to sustainability. The market risk quotient hasn't changed. Late last week Goldman Sachs elevated their S&P target, today David Kostin (yes, he's with Goldman Sachs) talked of a 6% gain for S&P this year, so that got some headlines. Guess what, as best I can tell, it's the same as last week's call. Of course given that so many on Wall St. will tag-along with whatever Goldman says (and that helps them in multiple ways), it's no surprise they reiterate the same call. It didn't have much effect, nothing did in today's calmer markets.

In fact I for one don't deny the S&P can advance, I just think vulnerability's greater this time of year, not just because of seasonality, and not because of technical indicators (they are generally neutral, not flat-out extreme like some contend), but because of 'discounted growth' at-risk given COVID-driven economics. But the very short-term work tends to point to higher not lower price for now (that's not likely going to unfold unless the big-cap techs kick back into the action).

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This is an excerpt from Gene Inger's Daily Briefing, which typically includes one or two videos as well as charts and analyses. You can subscribe for  more

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