I am going to leave a bit early to get some rest as I am still jet lagged.

Thanks again to the lynx-eyed Sarge, Chris, Mesh and Bret who filled in my absence.

It is nice to be back and I hope you enjoyed reading my Diary over the last three days.

Enjoy the weekend.

Be safe.

For the third straight day I am seeing a large buyer in Occidental Petroleum OXY.

Just...

Just Wishin' and Hopin'

*All you gotta do is...

Wishin' and hopin' and thinkin' and prayin'

Plannin' and dreamin' each night of his charms

That won't get you into his arms

So if you're lookin' to find love you can share

All you gotta do is hold him, and kiss him and love him

And show him that you care

-"Just Wishin' and Hopin'," Dusty Springfield

Volume is now coming into Occidental Petroleum.

From Peter Boockvar:

Positives

1. Powell officially endorses that the beginning of rate cuts is here but doesn’t commit to the pace as that of course remains to be seen. Markets though have already well priced this in.
   
   
   
   
2. The August U.S. services PMI rose to 55.2 from 55.
   
   
   
   
3. The claims data was about as expected. For the week ended August 17, initial claims totaled 232,000 as forecasted while last week was revised up by 1,000 to 228,000. The four-week average was 236,000 versus 237,000 last week. Continuing claims rose 4,000 week over week to 1.863 million and continues to hover around the highest since November 2021. The estimate was 1.87 million.
   
   
   
   
4. The July U.S. Architecture Billings Index rose to 48.2 from 46.4, though remaining below the 50 breakeven. They said, "Architecture firms continue to face a billings slowdown. However, the emerging prospects of lower interest rates coupled with a modest uptick in project inquiries suggest that some dormant projects may be revived in the coming months."
   
   
   
   
5. New home sales in July jumped to 739,000 annualized, well above the estimate of 623,000 and up from 668,000 in June which was revised up from 617,000. Almost all of the upside came from the West where it rose by 49,000 month over month. The upside led to a drop in months’ supply to 7.5 from 8.4. Volatile month to month because of mix, the median home price was up 2% year over year. Smoothing out the data puts the three-month average at 691,000 versus the six-month average at 689,000 and the 12-month average at 674,000. This added new supply is what the supply constrained existing home sales market needed. In February 2020, for perspective, new home sales were 707,000.
   
   
   
   
6. From Target TGT: "Among the drivers of our comp sales (2%), we're pleased that our second quarter growth was driven entirely by traffic… And we were particularly encouraged to see discretionary category trends improve for the fourth consecutive quarter. In apparel, comp sales grew by more than 3%, marking an improvement of more than 5 percentage points when compared with the first quarter."
   
   
   
   
7. From TJ Maxx: "We believe this is an excellent indicator of the strength of our business as our exciting merchandise assortment, great brands, and outstanding values continue to resonate with consumers across our geographies.”
   
   
   
   They said the comp growth was "entirely driven by customer transactions… We are convinced that consumers will keep seeking value... I am confident that our value proposition will continue to resonate with shoppers when they visit any one of our retail banners."
   
   
   
   
8. From Ross Stores ROST which saw 4% comp gains: It was "driven by a combination of higher traffic and basket size… We recognize that delivering the great values that our off-price customers have come to expect from us is more important than ever, especially given the continued pressures they face from the high cost of necessities."
   
   
   
   
9. From Cava CAVA: "CAVA was one of just a handful of publicly traded restaurant brands with positive traffic growth in the second quarter, and we believe our performance is a reflection of our unique and compelling value proposition… At a time when consumers are increasingly feeling the pressure of an uncertain economy, and are more discerning about where and how they spend their money, they are choosing to dine at CAVA."
   
   
   
   
10. From Madison Square Garden Entertainment MSGE: "Fiscal 2024 was another busy year of events for our venues, as we hosted approximately 6.3 million guests at over 960 live events. The majority of these events were driven by our bookings business, where we saw robust growth in the number of events held at our venues versus the prior year. This growth was driven by the concert and family show categories and included a record high for the number of concerts in a year at both the Garden and at Radio City Music Hall… Consumer demand also helped drive this growth, as customers continued to demonstrate their willingness to spend on experiences. Across our venues, the majority of concerts were once again sold out in the fourth quarter. We also saw higher overall per-cap spending on food, beverage, and merchandise at concerts in the fourth quarter as compared to the prior year period. Looking ahead, our bookings calendar continues to fill up, and we expect to again increase the number of events at our venues in fiscal '25, primarily driven by growth in concerts, family shows, and special events."
    
    
    
    
11. From Snowflake SNOW: "We continue to see signs of a stable optimization environment… Orders showed from a bookings standpoint that it's a normal environment and we are very pleased with the deals we closed in the quarter. I don't see it any worse. It's not euphoric or anything, but it's very stable customer buying pattern we're seeing."
    
    
    
    
12. From Analog Devices ADI: "Combined with improved customer inventory levels and order momentum across most of our markets, increased my confidence that our second quarter marked the cyclical bottom for ADI. My optimism remains guarded, however, these challenging economic and geopolitical conditions are limiting a sharper recovery."
    
    
    
    
13. From Toll Brothers TOL: "Net signed contracts were up year over year approximately 11% in both units and dollars, with July being our strongest month in the quarter. We are also encouraged by our solid deposit and traffic activity through the first three weeks of August. With mortgage rates at their lowest point in a year and trending lower, favorable demographics, and continued imbalance in the supply and demand of homes for sale, we are optimistic that demand will remain solid through the end of fiscal 2024 and into 2025."
    
    
    
    
14. BOJ Governor Ueda is sticking to his guns by saying to parliament that there is "no change to the BOJ's basic stance to adjust the degree of monetary easing if it became convinced that economic and price developments were moving as forecast... Japan's short-term rates are very low. If the economy is in good shape, they will move up to levels deemed neutral."
    
    
    
    
15. Likely capturing the Olympics sugar high, French business confidence in August rose to 97 from 94 (influenced by the election chaos) and that was 1 point above the estimate. But, it was 99.1 in June. All components rose month over month, including manufacturing, services, retail, employment and construction.
    
    
    
    
16. India continues to be the economic stand out. It's August manufacturing and services PMI held at 60.4 versus 60.3 in the month before. Gains were seen for Japan and Australia month over month for both components.
    
    
    
    
17. For the Eurozone, its services PMI was at 53.3. France's service component in particular led the way at 55, thanks to the Olympics and that is up from 50.1 in July. It stood at 51.4 from Germany.
    
    
    
    
18. The UK PMI was more balanced with manufacturing at 52.5 vs 52.1 in July. The services side was 53.3 versus 52.5 last month.
    
    
    
    
19. The Bank of Thailand the Bank of Korea each left rates unchanged as expected with the latter hinting at an October or November cut.
    
    
    
    
20. The Swedish Riksbank cut interest rates by 25 BPS as expected to 3.5% and said they will likely cut again. They said "If the inflation outlook remains the same, the policy rate can be cut two or three more times this year, which is somewhat faster than the Executive Board assessed in June."
    
    
    
    
21. Japan reported a 10.3% year over year rise in exports driven by tech products and autos. It was though a touch below the forecast of 11.5%. Imports grew by 16.6%, 200 BPS above the estimate.
    
    
    
    
22. Taiwan's July export orders rose 4.8% year over year, above the estimate of 2.7% growth. Not surprisingly from the ministry, "The stronger than expected orders were mainly because of robust demand for high-speed computing and preparations for new consumer electronic products."
    
    
    
    U.S. orders led the gains with a 14.3% increase. Orders from China were little changed.

Negatives

1. The August U.S. manufacturing PMI fell to 48 from 49.6.
   
   
   
   
2. The August Philly non-manufacturing index remained well under zero at -25.1 versus -19.1 in July.
   
   
   
   
3. The August KC manufacturing index was -3 versus -13. It was last above zero in September 2022.
   
   
   
   
4. In the 12 months ended March 2024, there were 818,000 fewer jobs created than previously estimated.
   
   
   
   
5. The August Dallas Fed's banking conditions survey continues to reflect a tight credit situation which mostly impacts small- and medium-sized businesses.
   
   "Loan volumes were flat in August after increasing in the prior two periods, and loan demand slipped. While overall credit tightening continued, standards and terms stabilized for residential real estate and consumer loans after more than two years of tightening. Loan prices held steady, marking the first time since 2021 that rates didn’t rise. Loan nonperformance continued to increase. Bankers’ outlooks faltered somewhat: They expect a deterioration in loan demand, loan performance and business activity six months from now."
   
   
   
   
6. We're still not seeing any lift in the use of mortgages to purchase a home according to the weekly MBA data. Purchases fell by 5.2% w/o/w even with another dip in mortgage rates. This component is at the lowest level since February. For many, the price is too damn high. Refi's fell 15.2% w/o/w after a strong two prior weeks.
   
   
   
   
7. Worth a read, and a wake up call that the credit markets are not all about credit spreads and that absolute yields matter: "Silent Defaults in Private Credit: The Unspoken Struggle."
   
   
   
   
8. From Target: On the consumer, "Given the significant headwinds they faced with inflation over the last few years, consumers continue to focus on value as they work hard to manage their household budgets. And while they continue to turn out and shop around holidays and other seasonal moments, many are delaying purchases until the moment of need. Against that backdrop, our team continues to focus on providing unbeatable value for our guests."
   
   
   
   
9. From Ross Stores: On the outlook, "our low to moderate income customers continue to face high costs for necessities, pressuring their discretionary spending. Looking ahead, our prior year sales comparisons also become more challenging during the second half of the year amidst an external environment that is highly uncertain. As a result, we continue to maintain a cautious approach in forecasting our sales."
   
   
   
   
10. From Lowe’s (LOW): "There remains a great deal of uncertainty, particularly around interest rates and inflation. In terms of housing specifically, we're seeing significant implications as a result of a lock-in effect. Simply put, people aren't moving nearly as often as they typically do because current mortgage rates are so much higher than their existing rates. And as a consequence, housing turnover is hovering near its lowest levels since the mid 1990s. And the preference for spending on services, especially for the more affluent consumer, has persisted much longer than expected."
    
    
    
    
11. From Williams Sonoma WSM: "There is no doubt that the home furnishings market is challenged due to the uncertainty in the economy, coupled with slow housing. This leads us to believe that we may not see the back-half acceleration that we expected, despite all of the hard work we've done to improve our product offer and our customer experience. Therefore, we believe it is prudent to reduce our top-line outlook for the balance of the year while continuing to deliver on our commitment to profitability, and in fact, we are raising our bottom line guidance."
    
    
    
    
12. From La-Z-Boy LZB: "The overall macroeconomic and consumer spending environment remains challenging... Looking forward, our industry will remain under pressure in the near term as the market contends with still high interest rates, muted housing turnover, and an uncertain economic and geopolitical environment."
    
    
    
    
13. From Macy’s M: "We entered the second quarter with an expectation that discretionary spend would remain stable, reflecting a resilient but choiceful consumer. As the quarter progressed, our customer became more discriminating, which we attribute to ongoing macroeconomic uncertainty and an increasingly complex news cycle… At Macy's, which was the most impacted by the shift in consumer behavior, we aligned our assortments and shifted our marketing calendar to better balance value and fashion... We are committed to reading and reacting in realtime to consumer demand to offer increasingly relevant product messaging and experiences at a compelling value regardless of the environment."
    
    
    
    
14. From Urban Outfitter URBN: "Towards the end of July and into August, we have observed a slight deceleration in retail segment sales compared to the second quarter run rate. While consumer traffic has remained consistent, overall purchasing activity has shown some softening. New product launches continue to resonate well, though customers appear to be exercising more discretion in their buying decisions. Given the recency of these trends, we are approaching our third quarter plans with measured caution."
    
    
    
    
15. From Advance Auto Parts AAP: On guidance, "We expect consumer related headwinds related to maintenance deferrals, lower discretionary spending to impact our trajectory in the short-term. With respect to quarter-to-date trends, both our pro and DIY businesses have started off weaker, driven by the overarching macro pressure on the consumer, tougher prior year comparisons, and diminishing weather related tailwinds exiting Q2."
    
    
    
    
16. From Workday WDAY: "We continue to see the macro environment consistent with our last quarter, including moderated headcount growth within our customer base. And, as we discussed last quarter, we expect these trends to continue."
    
    
    
    
17. The July Japan CPI figure saw a headline gain held at 2.8% year over year, one-tenth more than expected. Boosting it was the lack of utility subsidies which resulted in a jump in electricity prices. The core/core rate was higher by 1.9% year over year as expected.
    
    
    
    
18. The Eurozone economic bifurcation is stark as Its August manufacturing PMI stands at just 45.6.

So far, so good...

On the rally (S&P cash now +59 handles), I added to my short SPY/QQQ calls.

I am further reducing my GOOGL, AMZN, JOE and ARM longs now.

Covers on SPY and QQQ were $558.44 and $476.73, respectively.

The S&P cash has dipped by over 30 handles in the last 15 minutes.

I have taken my profit in my SPY and QQQ common short.

The bottom line to the Powell speech: “The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”

Emphasizing their shift in attention to the labor market, this was then followed by, “We will do everything we can to support a strong labor market as we make further progress toward price stability… The current level of our policy rate gives us ample room to respond to any risks we may face, including the risk of unwelcome further weakening in labor market conditions.”

In other words, any aggressive rate cutting cycle from here, rather than methodical and measured, will be because the economy and labor market deteriorates. Either way, with 100 BPS of cuts priced in through year end followed by another 100 BPS priced in through next August, nothing here should be a market surprise, though we see the initial stock market reaction is excitement. The two-year yield, however, is little changed in response.

With S&P cash up by over 65 handles, I am entering my second tranche of shorts now.

I am building up my short book on this morning's gap higher.

Adding to the following shorts:

* AAPL $227.21

* TOL $145.14

*DHI $189.01

* SPY $559.63

* QQQ $479.12

New trading short rentals:

* JPM $217.57

* BRK.B $452.19

• SQNS +160% (Qualcomm to acquire Sequans 4G IoT tech, including assets and licenses for $200 million; earnings, guidance)
• WDAY +15% (earnings, guidance)
• UEC +8.8% (strength following Kazatomprom’s 2025 production outlook)
• CAVA +8.4% (earnings, guidance)
• AMSWA +7.3% (earnings, guidance)
• ROST +5.6% (earnings, guidance)
• ROKU +4.5% (Guggenheim Securities raised ROKU to buy from neutral, price target: $75)
• BILL +4.1% (earnings, guidance)
• RKLB+3.9% (former Lockheed Martin CFO joins board of directors)
• CHWY +2.7% (Piper/Sandler raised CHWY to overweight from neutral, price target: $35)
• HE +2.0% (Wells Fargo raised HE to equal weight from underweight, price target: $14)

Downside

• (UBXG) -84% (profit-taking)
• RRGB -15% (earnings, guidance)
• UI -7.6% (earnings)
• JAZZ -4.4% (Cannabidiol oral solution Phase 3 trial in Japan in treatment-resistant epilepsies did not meet the primary efficacy endpoint)
• BKE -3.3% (earnings)
• PTON -2.9% (JPMorgan Chase and Co cuts PTON to neutral from overweight, price target: $5)
• LVS -2.0% (UBS cuts LVS to neutral from buy, price target: $49 from $70)

From Peter Boockvar:

I try to put myself in Powell's shoes and I don't expect anything special today from him. It could be a non-event in terms of market moves. He'll reaffirm market expectations of a September rate cut by again highlighting their shift in focus to the labor market but with more data to absorb before then, he'll have no interest in leaning into what extent they will cut. As for market expectations, past that of a full 100 BPS by year's end and 200 BPS by next year's Jackson Hole confab, why would he pre-commit to anything today? "Play it by ear from here," I believe is his thought process.

This all said, if he talks down the odds of 50 BPS next month by reinforcing his confidence in the economy, regardless of the CPI and payroll data he'll see soon, we'll get a selloff in the short end and likely in stocks.

More relevant maybe for the markets is what BOJ Governor Ueda said overnight to a parliamentary session in Japan. Notwithstanding the market earthquake a few weeks ago, Ueda blamed worries about the U.S. economy for the selloff, and not the BOJ rate hike, as it came coincident with the rise in U.S. jobless claims and weak July payroll print. He also said there is "no change to the BOJ's basic stance to adjust the degree of monetary easing if it became convinced that economic and price developments were moving as forecast... Japan's short-term rates are very low. If the economy is in good shape, they will move up to levels deemed neutral."

He did, though, acknowledge the markets response to their rate hike and yen rally and said, "We will watch financial markets with an extremely high sense of urgency for the timebeing." 

So, the BOJ remains a maybe factor I believe and is looking to raise rates again likely this year. The yen is up and JGB yields are lower in response. The Nikkei, though, is up too, by .4%.

Also a factor was the July Japan CPI figure where the headline gain held at 2.8% year over year, one-tenth more than expected. Boosting it was the lack of utility subsidies which resulted in a jump in electricity prices. The core/core rate was higher by 1.9% year over year as expected. With a benchmark rate of just .25%, Ueda does need to raise again, however slow and measured the pace might be. The 10-year inflation breakeven was up by 1 BP to 1.37%, but below where it was right before the rate hike when it was around 1.50%.

French Business Confidence

Likely capturing the Olympics' sugar high, French business confidence in August rose to 97 from 94 (influenced by the election chaos) and that was one point above the estimate. But, it was 99.1 in June. All components rose month over month, including manufacturing, services, retail, employment and construction. While not market moving, the euro and European stocks are higher while bond yields are little changed.

Earnings Calls

On to the earnings calls, where the unevenness and fragility in the U.S. economy remains apparent and at least in retail, "value" is the hot buzzword, as said yesterday.

From Ross Stores ROST, where comps grew by 4%:

The comp was "driven by a combination of higher traffic and basket size."

"Cosmetics and children's were the strongest merchandise areas during the quarter, while geographic performance was broad based."

On the outlook, "our low to moderate income customers continue to face high costs for necessities, pressuring their discretionary spending. Looking ahead, our prior year sales comparisons also become more challenging during the second half of the year amidst an external environment that is highly uncertain. As a result, we continue to maintain a cautious approach in forecasting our sales."

"We recognize that delivering the great values that our off-price customers have come to expect from us is more important than ever, especially given the continued pressures they face from the high cost of necessities."

From Williams Sonoma WSM, whose comps fell 3.3%:

"There is no doubt that the home furnishings market is challenged due to the uncertainty in the economy, coupled with slow housing. This leads us to believe that we may not see the back-half acceleration that we expected, despite all of the hard work we've done to improve our product offer and our customer experience. Therefore, we believe it is prudent to reduce our top-line outlook for the balance of the year while continuing to deliver on our commitment to profitability, and in fact, we are raising our bottom line guidance."

From Cava CAVA, who continues to perform with a similar model as Chipotle that includes generous portions where a customer $1 goes a long way relative to other QSR peers:

"CAVA was one of just a handful of publicly traded restaurant brands with positive traffic growth in the second quarter, and we believe our performance is a reflection of our unique and compelling value proposition."

"At a time when consumers are increasingly feeling the pressure of an uncertain economy, and are more discerning about where and how they spend their money, they are choosing to dine at CAVA."

"Consumers have been frustrated and fatigued by higher prices over the past few years. In this post-high inflationary environment, traditional full-service chains are struggling to deliver a compelling value proposition, while conventional fast-food chains have raised prices at a faster rate, driving the perception that they have become too expensive... Our value proposition lies in the quality of our food, the relevance of our differentiated Mediterranean cuisine ... the convenience with which our guests can access that cuisine in our multi-channel format, and the experience they have when they engage with our brand and our hospitality."

From Advance Auto Parts AAP, whose comps rose .4%:

"During the second quarter, our frontline team navigated a weak demand environment as consumers continued to feel the weight of an uncertain macroeconomic climate."

"DIY remained pressured but improved sequentially... The macro environment is challenging, retailers are lowering expectations, and we're starting from a lower baseline relative to the industry."

"In terms of cadence for the second quarter trends started off soft and improved as we moved through the quarter with the benefit of the tailwind from hot weather related sales and our strategic actions to drive growth among the pros."

On guidance, "We expect consumer related headwinds related to maintenance deferrals, lower discretionary spending to impact our trajectory in the short-term. With respect to quarter-to-date trends, both our pro and DIY businesses have started off weaker, driven by the overarching macro pressure on the consumer, tougher prior year comparisons, and diminishing weather related tailwinds exiting Q2."

With regards to Workday WDAY, whose stock is rallying sharply after earnings, I pulled this macro comment out of its call as we all watch the labor market with greater scrutiny right now:

"We continue to see the macro environment consistent with our last quarter, including moderated headcount growth within our customer base. And, as we discussed last quarter, we expect these trends to continue."

* Market interpretations will vary

* Whether Thursday's market reversal was a change in market character will only be known with the benefit of hindsight

* Goldilocks thinking may be wrong-footed — that fairy tale's outcome (like a further continuation of the bull market) may not occur with the ease in which so many investors now posit

* I am of the view that downside market risks now dwarf upside market rewards

We will only know with the benefit of hindsight whether yesterday's price action was a change in market character.

Nonetheless, today (in the business media) we will watch "talking heads" state with confidence their views as to the significance of the market's recent volatility and downside action on Thursday.

As for me, I am often wrong and always in doubt — I will not pretend that I have a special stock market crystal ball.

As we learn from reading Howard Mark's recent commentary, "Mr. Market Miscalculates":

"The non-linear nature of this process suggests something very different from rationality is at work. In particular, as in many other aspects of life, cognitive dissonance plays a big part in investors’ psyches. The human brain is wired to ignore or reject incoming data that is at odds with prior beliefs, and investors are particularly good at this."

Howard goes on:

"Further complicating things in terms of rational analysis is the fact that most developments in the investment world can be interpreted both positively and negatively, depending on the prevailing mood.

"Another classic cartoon sums up this ambiguity in fewer words. It’s highly applicable to the market tremor that inspired this memo."

As seen by the above cartoons and witnessed by us daily, market interpretations can vary.

I can't tell you whether the market reversal yesterday represented a bearish engulfing candle:

Or whether Thursday's reversal represented resistance near previous market highs:

Or whether a short-term change in momentum (with several key ETFs [the S&P 500, Nasdaq 100, Semiconductors and Biotech indices] all violated their five-day moving averages on Thursday) has developed.

Or whether Mr. Market was simply overbought and demand for equities were sated:

Or whether yesterday represented a brief respite from a powerful market advance that started in late 2023.

That said, for the multiple reasons mentioned in my Diary over the last few months I continue to view the market as overvalued — a market that has likely already well discounted the likely reduction in interest rates by the Federal Reserve.

In keeping with these views (and given the rise in stock futures overnight) I re-shorted the indices (after covering some of my position in yesterday's schmeissing) in premarket trading:

* SPY at $588.87

* QQQ at $478.26

About Goldilocks Thinking

I am of the view — after the market's recent gold rush — that the upside reward is now dwarfed by the downside risk.

I will end with more pearls from my pal Howard Marks' recent commentary, "Mr. Market Miscalculates":

"Charlie Munger, Warren Buffett’s late partner, routinely quoted the ancient Greek statesman Demosthenes, who said, 'Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true.' One great example is 'Goldilocks thinking': the belief that the economy will be neither strong enough to bring on inflation nor weak enough to lapse into recession. Things sometimes work out that way – as may be the case right now – but not nearly as often as investors posit. Expectations that incline toward the positive encourage aggressive behavior on the part of investors. And if this behavior is rewarded in good times, still more aggressiveness usually ensues. Rarely do investors realize that (a) there can be a limit to the run of good news or (b) an upswing can be so strong as to be excessive, rendering a downswing inevitable.

"For years, I quoted Buffett as having warned investors to temper their enthusiasm: 'When investors lose track of the fact that corporate profits grow at 7% on average, they tend to get into trouble.' In other words, if corporate profit growth averages 7%, shouldn’t investors begin to worry if stocks appreciate by 20% a year for a while (as they did throughout the 1990s)? I thought it was such a good quote that I asked Buffett when he said it. Unfortunately, he answered that he hadn’t. But I still think it’s an important warning.

"That inaccurate recollection reminds me of John Kenneth Galbraith’s trenchant reference to one of the most important causes of financial euphoria: 'the extreme brevity of the financial memory.' It’s this trait that allows optimistic investors to engage in aggressive behavior, untroubled by knowledge of what such behavior led to in the past. Further, it makes it easy for investors to forget past errors and invest blithely on the basis of the newest miraculous development."

This table is a valuable resource for momentum-based short-term traders:

From JPMorgan:

U.S.: Futs are higher with tech leading. Top performers in mega-cap tech are TSLA (+1.5%), NVDA (+1.2%) and AMZN (+69 bp). Bond yields are higher, and USD is lower; 2-, 5-, 10-year yields are 2 bp, 5 bp, 10 bp higher. Commodities are mixed with oil and precious metals higher, while base metals are lower. Today, the main focus will be Powell’s speech at Jackson Hole (10 a.m. ET).

and...

Equity and Macro Narrative: Yesterday, equities failed to hold 5600 again after the flash PMI and claims releases. On the surface, PMIs is a mixed result with the better-than-expected services prints offsetting some weakness in mfg. Claims prints were largely in line with expectations and the stabilization in claims numbers should be a welcome sign for growth. Tech and consumers were the biggest laggards, while energy, RE and financials outperformed. Investors are waiting for Jackson Hole tomorrow (Powell’s speech at 10 a.m. ET). While it seems unlikely that Powell will offer much new information on rate cut expectations, given the lack of macro catalysts this week, we may still see some price action around hawkish/dovish tilt from Powell. In addition, after Monday’s rally, the SPX is now inching towards its ATH and trying to stay above 5600. While we still remain our bullish stance, upside could be more limited than before ahead of September 6 NFP as it will be the determinant factor for rate cut and key to assess growth risks.

"There is nothing more deceptive than an obvious fact."

-Sherlock Holmes

Bonus — Here are some great links:

"Bulls Take Off," Bespoke

"The Fed Should Be Forceful Next FOMC Meeting, Says Strategas' Chris Verrone," YouTube 

"New Kids on the Blockchain," All Star Charts

"15 Ways to Lose Money in the Markets," A Wealth of Common Sense

My first recommendation to a young person trying to learn the investment business is to read everything you can: