Another Record High Produces More Yawns Than Excitement
Boredom and disinterest rather than active selling may be the biggest problems for the market right now.
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Stocks fought back from a slow start on Monday morning, but gains were mild, and there wasn’t much energy. Breadth improved to about 5,300 gainers and 3,950 decliners, and new highs and new lows were close to even.
Nvidia NVDA shook off some early profit-taking after its stock split and managed a 1% gain, but despite endless coverage about its AI initiatives, Apple AAPL saw a sell-the-news reaction and lost about 2%.
Apple had plenty of interesting news, but there isn’t much insight yet as to how its AI programs will impact earnings down the road. That hasn’t stopped some bullish analysts, but unless estimates increase, the stock is quite expensive.
Speculative action slowed quite a bit on Monday, although small-caps bounced back nicely after the early pressure. The problem is that stocks are holding up, but there is very limited momentum, which means there isn’t much reason to chase or to feel fear of missing out.
The market will be dealing with both CPI and the FOMC interest-rate decision on Wednesday, so there is probably hesitation about taking action before those events.
The business media is reporting a record-high close for the S&P 500, which is a good excuse for a headline, but there isn’t much excitement out there. New highs for the indexes have been so common for so long that they no longer have much impact.
I remain cautious about the overall market, but we may be in a situation now where the biggest problems are boredom and disinterest rather than active selling.
Have a good evening. I’ll see you Tuesday.
At the time of publication, Rev Shark had no positions in any securities mentioned.
