Mike Santoli's market notes: S&P 500's boring run, strong manufacturing data, Apple is a beast

Published Tue, Sep 1 202012:56 PM EDT

This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. Most of the energy still coming from the trending tickers of tech, but a nice bump in ISM manufacturing allowing the metal-bending stocks to make some progress too, allowing the S & P 500 to extend its "boring" but persistent push to new highs. ISM shows this is a boom in "stuff" alongside a bust in "services." Lots of pull-forward in the manufacturing data but alongside hot housing and auto sales the economy in goods is just fine. Too bad we're mostly a service/experience economy. Equal-weighted industrials up two-thirds of a percent, transports better by 1%. Shows that the "rotation" idea can in a best-case be a "broadening." Still not a trustworthy trend but cyclical strength a big theme. Dollar continuing to slide for now reinforces the "high liquidity, negative real rates, indefinitely easy Fed" story line which is giving psychological cover for a lot of the willingness to buy and hold at elevated valuations. Does the velocity of the drop (surge in euro) tell us anything about unsettling vibrations in macro land? Not clear right now. AAPL such a beast — but is a 2.7% extension of its post-split rally on what on the surface seems bullish news about 5G iPhone/watch production a sign of growing buyer's fatigue? Crazy to say, but that's just how wild things have been. Buffett bought AAPL as a quasi-consumer-staples company and now AAPL itself is bigger than the entire consumer-staples sector. Zoom's absurd upside revenue/profit beat is testing even the New Era tech bulls' ability to project market-share and market-cap gains for new "platform" companies. CLOU ETF up 4-5%, Docusign ahead by 13%. Market is unbothered by the prospect that this whole adoption curve for WFH services could hit a wall in a return to "normalcy." The remarkable thing about this bull market is the spring-loaded disruptive growth mixed with price-insensitive traders willing to pay up for the obvious hot thing – at the same time we have "early cycle" recovery dynamics in the real economy. Unique blend of late/early-cycle market characteristics. Definitely starting to rhyme with '99 but that was far more pervasive and crazy and accompanied by a ton more new-stock sales via IPOs. TSLA having modest indigestion on the $5 billion share offering (equals only ~1% of market cap). I'd expect a much bigger share dump in conjunction with a possible S & P 500 induction. At today's prices, with so much fresh buying urgency needed to hold the stock aloft, hard to know if the market could choke it down easily. The market trend is up, but we're overbought and headed into some tough seasonal areas. Speculative games are getting silly but they can continue a long time, and there remains a wall of worry among the "old-guy pros." Breadth is meh, not much better than 50-50 up/down volume. New lows on the Nasdaq are perking up, which needs watching. VIX down a bit but higher than it "should" be given new highs and calm index action – lots of index hedging vs frothy options action in individual stocks.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 20, 2020.

Lucas Jackson | Reuters

This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics.

Most of the energy still coming from the trending tickers of tech, but a nice bump in ISM manufacturing allowing the metal-bending stocks to make some progress too, allowing the S&P 500 to extend its "boring" but persistent push to new highs.
ISM shows this is a boom in "stuff" alongside a bust in "services." Lots of pull-forward in the manufacturing data but alongside hot housing and auto sales the economy in goods is just fine. Too bad we're mostly a service/experience economy.