We’ve seen some big intraday swings in the S&P 500 so far this month, but it’s funny how it tends to still close near the “unchanged” level on most days. In fact, the SPX is pretty much unchanged since the last day of trading in July. Of course, we’ve only had six days of trading so far this month, so it’s still early. Besides, this all-important index had rallied more than 5% over the last 3 day of trading in July (after already rising 7% before those last three days in July)…so the fact that it hasn’t done much so far this much is not a concern at all. In fact, it could be views as a healthy “breather”…that is merely helping the stock market digest its strong gains from the summer rally.
It is our guess that today will be an uneventful one. We have the big inflation number (CPI) coming tomorrow morning…so we could see investors and traders sit on their hands today…much like they did last Thursday (the day before the big employment report). Despite the fact that the market has seen several days with some big swings, last Thursday was not one of those days. It gave us the tightest range for the S&P all year…as people waited for the employment report. We could/should see similar action (or inaction) today.
The futures are trading a bit lower today…after the negative pre-announcement out of Micron (MU). This follows a similar announcement from Nvidia (NVDA) yesterday…so there is a real chance that the market will not be able to stay within a tight range today. Instead, it could see some weakness given how important the chip stocks are to the broad market. (“Sell the news” on the signing of the “Chips Act.”???)
Having said this, tomorrow’s CPI data ...