The Morning Call
8/5/26
The
Market
Technical
Tuesday in the
charts.
Note: my caution
notwithstanding, the S&P exploded yesterday, pushing it above its prior all-time
high. If it remains there through the close
on Friday, it will confirm the breakout.
Ordinarily, my rules say wait until that confirmation before taking
action. However, the technical setup as
described below in the five links persuades me to start nibbling. Accordingly, the Dividend Growth Portfolio
bought a one half position in Brown and Brown. The next visible resistance
levels are the upper boundary of its short term uptrend (~7823) and the upper
boundaries of its intermediate and long term uptrends which are converging at
~9000.
Tuesday in the
technical stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/market-performance
https://www.barchart.com/stocks/sectors/rankings
https://www.barchart.com/stocks/signals/new-recommendations
This indicator is
giving the bull market another lease on life.
July didn’t change the structural bull, it
reset it.
Fear is dead; FOMO is back.
Goldman strategist sees ‘great broadening’.
The chase is on.
Gold’s biggest setup in months.
Wednesday morning
setup: S&P 500 futures are up following yesterday’s first ATH since June;
both tech and small caps are lagging, pointing to another potential broadening.
A jump in US tech stocks is holding too, with Nasdaq-100 contracts rising after
a 3.3% surge in the session before, powered by semiconductor stocks and blowout
Palantir earnings. S&P futures are up 0.4%, just shy of 7800, a new all-time
high, while Nasdaq futures underperform, rising 0.2%, as results from
AMD and SpaceX failed to impress, sending shares in both lower in after-hours
trading. AMD’s forecast didn’t meet high expectations, while SpaceX investors
focused on the hikes being made to its AI spending. Semis/memory are lower with
some likely profit-taking after yesterday’s surge; NVDA/GOOG are leading Mag7
names higher as it appears that squeeze portion of this rally has room left to
run, as JPM says keep an eye on IGV as the squeeze may turn into a narrative
shift flipping one of the lightest owned sub-sectors into a leader in the
near-term. Germany’s Infineon, up 69% this year, picks up the baton for
European semiconductor sector results Wednesday. Tuesday gains have fed into a
bounce for the Kospi and Nikkei 225 in Asia. Euro Stoxx 50 futures are also up
0.4%. The mood in stocks and in bonds has been bolstered by oil prices
continuing to ease off, with Brent slipping below $79/bbl before rising
above $80 as Houthi rebels threaten Saudi shipping north of the Red Sea and the
UKMTO reported a ship sunk off Yemen after it was attacked by an unmanned craft.
Qatar said a proposal had been drafted and both American and Iranian officials
sounded hopeful about reopening the Strait of Hormuz. Treasury yields are
dipping, while yields are down in Japan, Australia and New Zealand, the latter
after weak quarterly jobs data. The Bloomberg Dollar Spot Index is softer,
with the Swiss franc and Swedish krona leading gains among major currencies and
the kiwi the laggard. Asia FX is green across the board. Commodities are
bid, led by Precious Metals; WTI seeing support around $75/bbl though that
could change following the expected formal announcement of a new deal between
the US and Iran. Today's US economic data calendar includes July ADP
employment change (8:15am), July final S&P Global US services PMI (9:45am)
and July ISM services index (10am). Fed speakers scheduled include Cook
(4:05pm) and Daly (8:35pm)
Fundamental
Headlines
The
Economy
US
Weekly mortgage
applications fell 2.9% while purchase applications declined 4.0%.
Month to date
retail chain store sales were up 8.7% versus +8.3% in the prior week.
The June jobs report
(JOLTS) showed a total of 7.35 million job openings versus estimates of 7.4
million.
June
factory orders fell 0.3% versus expectations of +0.2%; ex transportation, they
were down 0.4% versus +0.5%.
The July
ADP employment report showed a total of 44,000 new jobs versus consensus of
70,000.
The August small
business optimism index was 45.1 versus predictions of 47.5.
International
June Japanese YoY average earnings rose 3.4%, in
line.
June EU PPI was down 0.3%, in line.
The July Japanese
services PMI came in at 51.2 versus forecasts of 51.9; the July composite PMI
was 52.7 versus 53.1; the July German services PMI was 49.8 versus 49.6; the July
composite PMI was 51.3 versus 51.2; the July EU services PMI was 51.9 versus 51.6;
the July composite PMI was 52.0 versus 51.9; the July UK services PMI was 52.1
versus 51.8; the July composite PMI was 52.2 versus 51.4.
Other
Yen intervention will not change fundamentals.
https://mrzepczynski.blogspot.com/2026/08/yen-intervention-will-not-change.html
June median household income.
https://politicalcalculations.blogspot.com/2026/08/median-household-income-in-june-2026.html
Iran
Overnight news.
Monetary
Policy
Warsh is off to a good start.
https://alhambrapartners.com/weekly-market-pulse-warsh-is-off-to-a-good-start/?src=news
Counterpoint.
https://talkmarkets.com/article/is-the-bond-market-putting-warsh-in-a-corner-1785840719
AI
Data center construction spending goes exponential.
Investing
The 60/40 portfolio
is no longer working.
https://www.apollo.com/wealth/insights-news/insights/daily-spark/60-40-no-longer-working
Total return
forecasts for major asset classes.
https://www.capitalspectator.com/total-return-forecasts-major-asset-classes-4-august-2026/
Everything feels like
gambling.
https://huddleup.substack.com/p/why-everything-feels-like-gambling
The return of fiscal QE.
News on Stocks in Our Portfolios
What
I am reading today
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