Recapping the day's news and newsmakers through the lens of CNBC.
The second half of August ought to be quiet time. People are on vacation. Congress is in recess, and the president is hanging out on Martha's Vineyard. The stock market has been doing fine. So, hey, what's to worry about?
It turns out there's plenty, everything from a looming debt-ceiling showdown to speculation over who will be the next Fed chairman to the "Hindenburg Omen."
David Blitzer, chief of the S&P 500 index committee, doesn't expect a government debt default, which would be catastrophic. But he does foresee another game of debt ceiling chicken that could throw the market into turmoil this fall.
Of course, the market is always susceptible to correction after a good run, as investors look for excuses, like a belief in "tired market syndrome," to nail down gains. Some market watchers worry that S&P is meeting resistance at 1,700.
The Hindenburg Omen, then, could be the trigger for trouble. It is one of those bits of Wall Street lore that may or may not have a foundation in fact, but could influence the markets if enough people believe in it.
Believers say the market fares poorly after witnessing five omens, and there have been five in the past eight trading sessions, the tightest cluster since November 2007.
Among the most important are occasions when unusually high numbers of NYSE stocks hit new highs and lows. Others are when the NYSE index is higher than it was 50 days earlier, when market breadth is negative, and when there are fewer new highs than lows.
Now for the good news: S&P's Blitzer figures any market pullback will be short-lived, with stocks heading back upward because fundamentals are fairly good.
"The big issue is the debt ceiling, the budget deficit, the U.S. Congress. It's the whole fiscal policy side that's the huge problem. At this point, it looks like a nasty standoff. Nobody wants to give anything. The clock is ticking on the debt ceiling. I don't think we're going to default but I think we're going to have one of these crazy 11th-hour skirmishes.... Everybody will decide the U.S. Congress is even worse than their worst nightmare and the markets will get hit as a result."
—S&P's David Blitzer
"There have been multiple occurrences of the Hindenburg Omen in the last several weeks. ... that sure makes that 'check engine' light glow much, much brighter."
—Art Cashin, UBS director of floor operations
Poor quarterly results expected from retailers
You don't get a healthy economy without a free-spending consumer. We all know that. Which is why the upcoming reports from retailers will be so important.
And one analyst, at least, is not at all optimistic. Though consumers have been opening their wallets for big-ticket items like cars, homes, travel and technology, they haven't done the same for ordinary retail items, said hedge fund manager David Berman of Durban Capital.
He believes reports coming soon will show retail sales grew just 2 percent in the first quarter, versus 4 percent in the previous quarter. Though the bulk of reports are still to come, several major retailers have already reported poor results, and there are signs retailers have resorted to way too much discounting. Much of the retail spending that is occurring is being soaked up by Apple, Samsung and Amazon.
"In a few weeks, we're going to have a lot of retailers reporting. We actually think it's going to be a lot worse than people think. We thought things would bounce back, but they don't seem to have. ... I just think it's going to be horrible. I think people just do not understand right now just how choppy it is."
— David Berman of Durban Capital
Will Apple wow us again?
Apple will announce its next iPhone on—drumroll—Sept.10!
Gee, what a surprise! Why wouldn't they wait until after Christmas?
Apple hasn't actually said when this key announcement will come, but reports have begun to circulate—citing anonymous sources, of course. Still, the news was good enough to drive Apple's shares up today.
No word yet on what will distinguish the next iPhone from current models. Speculation centers on bigger screens, cheaper models, more colors—even a fingerprint sensor.
The big question: Will the new model have "OMG" factor that makes a tech product a must-have for consumers.The history is mixed, with some iPhones dazzling and others falling flat, causing some grousing and sniping from analysts.
"We just want OMG. In the meantime, the stock got too cheap. And you saw a lot of analysts cut the price target to a level that was under where the stock went. ... I'm going to wait and see. I'm not going to pass judgment that this is already just a nothing phone. That's kind of the rap on Apple and I'm kind of tired of that negative rap."
—CNBC's Jim Cramer
And a Twitter IPO is coming...
Speaking of announcements that haven't been made, or even scheduled, there's speculation that Twitter will soon reveal plans for its initial public offering. So, if you want a share of the initial shares, better get on your broker's good side.
There's no guarantee of a first-day bump with Twitter—we all remember the Facebook snafu last year. But now that Facebook has produced stunning results, its stumble out of the gate is forgiven.
That could encourage Twitter to go public early next year. Given the lead time required, that schedule would dictate an SEC filing pretty soon. Twitter's management has denied IPO plans, but recently sent a not-so-subtle signal with a job posting for a financial reporting manager who could handle the paperwork "when we are ready to go public."
"Twitter is staying private for as long as possible. In the meantime, it's doing everything it can to bolster its business model so it can avoid Facebook's post-IPO crash."
—CNBC's Julia Boorstin
How they wield the axe at AOL
How do you put the fear of God into the troops? Well, how about a public execution?
That's what AOL CEO Tim Armstrong did the other day, as he conducted a conference call with employees of AOL's 900 Patch local-news sites, a stable being cut to 600.
An audio recording indicates that the Patch creative director, Abel Lenz, was photographing Armstrong as he spoke, a task that apparently had been among his duties. An angry-sounding Armstrong fired Abel on the spot. And he invited other employees to leave if they thought his plans for Patch were "a joke."
It's too soon to know if the bloodletting will help turn AOL around. Or how the company's new reputation for employee relations will affect any future hiring.
"Abel, put that camera down right now. Abel, you're fired. Out."
—AOL CEO Tim Armstrong
—Jeff Brown, Special to CNBC.com