Stabilization and lower yields resulting from geopolitical tensions actually help the stock market, partially as it tames the Fed from any zealotry, almost regardless of continuing inflationary pressures.

Market and global situations are not the only reason for the Bond market to stabilize (yields easier); and a lot of the work was done and overdone before. This was and is not only a set-up that caught 'too many on the wrong side of the ledger' (short), and too much negativity.

A sustained growth period, with or without heightened 'war', is a backdrop that isn't entirely comforting due to high price levels; but as stability is essential as wider war may loom; the S&P might find itself probing new 'record highs'.

That's going to be a bit difficult because multiple compression, not expansion, is more likely for the overdone mega-caps. But around the edges or the mass of stocks, under-priced conditions can well help broader price gains into 2024.

No sense exploring this more now; shorts got trapped; no surprise. How much further this move can go is very dependent, on CPI and the ongoing war that's more likely to expand than contract. Sec'y. Blinken going to the Middle East is notable; especially 'if' it involves the rumored effort by (pro Hamas notably) Qatar to initiate some sort of 'negotiation' to try freeing hostages in Gaza. For sure there's the looming prospect of the IDF going into Gaza and trying from a risky and possibly futile military effort; so we'll see if anything unfolds aside an all-out assault. And with Syria launching 'some' rockets, Lebanon Hezbollah probing; more West Bank agitated skirmishes; well, stay tuned for anything.

Market X-ray: Tuesday's anticipated upside follow-through scrambled shorts a bit, and then went sort of 'flat' for the rest of the day; holding most gains. The breadth was especially good throughout, and that's somewhat key to this. The S&P does need fairly steady broadening-out, since mega-caps remain pricey.

The level of volatility combines with economic data 'and' geopolitical crisis, to keep traders on-edge, while financial pressure to meet the rising obligations by the United States will (or I should say must) compel Congress for funding.

I do not remotely believe nonsense out there suggesting anything other than a proper moral outrage at what has happened; which does require not limiting a military buildup (and/or more) as a result of what's happening. It's not a matter of getting politicians off-the-hook about the 'Debt' or Budget; but it's like war

And as to at least one American Congresswoman or the 30 student groups of woke idiots at Harvard, who tried to present 'moral equivalency' in this crisis, I would suggest (as Gen. Dwight Eisenhower did to his aides when he first saw the Concentration Camps he had just liberated); bring in the journalists. That's because then, and sadly apparently now, man's inhumanity to man was on full display. The horror of it all was like ISIS, and that isn't like army-vs.-army; it's medieval and anyone condoning or rationalizing the brutality needs to see the pictures, some of which the media won't show, and I won't post or share. I'm disgusted by some of the comments online, and while anyone can have an opinion, such opinions that support terrorists have no place in our society.

Bottom line: clearly the shorts got throttled (too much negativity again); and good follow-through was seen. Now it depends both on CPI but more notably on whether, when or what is launched in the effort to rescue hostages and/or support Israel's efforts to eradicate Hamas; with the handwriting on the wall as relates to Hezbollah, should they (or Syria or others) try to get involved.

Stocks will initially react to data, but there's a lot more going on. Uncertainty in this case for the moment routs shorts and generates rallies; but you'll need an increased confidence in a calmer Fed to sustain S&P. Premature to set sights on 'all-time highs' (hah!) for S&P, although as already stated, I believe stocks in businesses that will 'make it' accumulated gradually during despair waves, will look good later next year. We'll see but more roller-coasters can occur; it's also largely going to be telegraphed by Oil prices.

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