Normalizing abnormalities  is what's going on in many aspects. Including of course the Fed trying to navigate better after being 'behind the curve' for such a long time; by consumers who are retreating from profligate post-pandemic spending, but not evacuating altogether; and even political common-sense is prevailing, with regard to passage of the so-called 'Chips Act'.

On top of that one could reflect on Speaker Pelosi's successful Taiwan arrival, which was commended by most Americans of both parties with any gumption. It reinforces the commitment of the decades-old Agreement; and offends the Chinese, as they become a bit more inhibited in undermining free governance of the Island of Formosa; although the last chapter of that isn't written as yet.

Today a couple of Fed-heads commented about inflation's fast paced, but sort of neglected mentioning that it basically peaked (the 'pace' of price increases) in early July as we outlined was likely happening (as Oil pressed the 120 level).

The program of fighting inflation is 'not over' (and should not be); but there's a limit to what the Fed itself can do. I suspect Chairman Powell realized that; as he indicated 'everything would be based on data', which is different that what you hear from some individual Fed staff or economists talking about programs to hike rates that will persist for a long time. They might of course; but the way the Chairman presented it allowed for the S&P extension that is subject to the reality that 'even the Fed doesn't know' what they going to do in the future.

Today we got more Jobs Openings in the JOLTS report I had mentioned a key to the short-term; and it was supportive of the 'bad news is good news' theme.

Technically we came off of a 'curved' soup-bowl-like bottoming structure; as a heavy S&P entered the ~3800 area from the preceding downside objective; in a constructive way for rebound (from late June into July); and carried further. I notice the signs of inflation having 'peaked' (in pace not level); and that's great for the Fed's ability to continue hiking rates but at a slower pace.

There are concerns beyond the 'Dog Days of Summer'; and that includes the forthcoming Chinese response to the noble visit of Speaker Pelosi to Taiwan. I doubt they'll hobble trade, because their economy is in more trouble now; with both real estate and health concerns, especially with rolling Covid lock-downs.

In sum: Fed-speak, China threats, and a 'real-politik' sort of mood sobered the Indexes; but left breadth mostly ok, as domestic-centric technology stocks showed their 'mettle' relative to those more dependent on Chinese sources.

A time of greater tension with China already existed; and will not deepen. It's hard to draw too many conclusions or inferences yet; but it is helpful to those companies least dependent on imported goods and a boost to those trying to get going in the USA without being throttled by Chinese competition. However it's a far broader concern with overtones of trying to deter China from what its current President (Xi) has referred to as 'his life's work' to recouple Taiwan. So we wish Taipei well; applaud Nancy Pelosi for (in her own senior years) for the courage to stand-up for democracy; but also recognize various risks it raises.

Mixed internals.. is a way to describe Tuesday's action; probably wait & see for the S&P; but equities are actually due to have rest with alternating spates of rallying. Actually the market did pretty darn well considering the backdrop.

A slew of notable earnings reports continue; however to us, semiconductors, Oil and domestic-centric technology are most important. Mostly they tended to be up or sideways today; not down in sympathy with the DJIA or S&P.

Also, contrary to analysts so-opposed to speculation; I thought the May/June washout a time to accumulate some 'bets' (in various parts of tech mostly). So far proving alright. More interesting than conservative 'dividend-paying' types; of course with a few exceptions (like Chevron that I've loved for ages). Some bigger stocks were fairly opportune in the Semiconductor Sector; AMD for the larger plays; and of course AEHR Test Systems was essentially a bargain for the potential we see. ON Semi's CEO today emphasized SiC (silicon carbide) as dominant for the next decade or two in EV's, and that boosted AEHR too.

As to the post-close reports; Starbucks made numbers; but that's a Chinese play in a sense, so we're not interesting in fiddling with it now; same with this level of pricing for Apple (also a Chinese involvement of significance); though we've owned Apple for a very long time from much much lower levels. Then you've got Caesars with a record Quarter (must be post-pandemic escapes from home); plus you don't have much gaming (due to lockdowns) in Asia.

AirBnB gave rosy guidance but shares got kicked even with higher revenue.I might mention that Robinhood is cutting about a quarter of their entire staff; but I never cared for that online broker (because of the ability to hack with the way they asked for customer banking information) and would never use them.

AMD dropped just a bit on better numbers but slightly lower adjusted margins. It's one of our favorites all the way since 17; but we don't expect much 'now', while AMD continues to grab share from Intel with similar market cap now. I'd note that 'revenue guidance' was slightly lower than they told analysts before. But I think it's the 2 point shade on gross margins that was more pertinent.

I thought the guidance was generally ok but a bit 'ehh'... and that's ok from a long-term perspective. Again we sold some portions at much higher prices; and don't really see need to reinvest in it with those proceeds for now. They are taking tons of market share and eventually it's probably a 200 dollar stock which is why we hold more than half of original positions ever since ~ 17.

Bottom line: I know that some analysts consider the semiconductor bounce is a headfake. I doubt that; though likely premature relative to future growth as relates to 're-sourcing' to the USA and expansion of auto-related products.

At the same time there is accumulation given that odds don't favor really lower prices for most of the best semi shares even with a market decline this year. If we get such a sell-off, so be it; but it's not a given that June wasn't the low for some of those stocks; so I guess some money managers will spread buying.

Meanwhile there's the multifaceted geopolitical concern, which can disrupt all sorts of presumptions or plans for investing. But can also ensure skepticism in a strange way that helps keep sentiment skeptical and underpins stocks.

Wednesday is geopolitically sensitive; otherwise should start soft and bounce but be more defensive later perhaps.

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Market Briefing For Tuesday, Aug. 2
Market Briefing For Monday, Aug. 1
Market Briefing For Thursday, July 28