Santoli’s Wednesday market notes: Tech giants support the market as many stocks slide

Published Wed, Jul 14 20211:30 PM EDT

This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. Still a hesitant, unbalanced market, propped by the familiar Nasdaq giants while most stocks slip. In all, the index is being held harmless by the growth bid while small-caps and financials struggle. Market is acting as if we're back in the decelerating-recovery/disinflationary zone even as the red flashing inflation numbers and massive earnings rebounds win headlines. Treasury yields give back yesterday's odd auction-related lift, and Jay Powell is out with reassurance that the Fed is some distance away from any market-threatening action. Backdrop: The S & P 500 has doubled off the March 2020 low and is now pushing up against the aggressive pre-Covid rally trend line set after the launch of the December 2018 low. The S & P has compounded at 25% annualized since the end of 2018 – excellent, even if we hadn't had a -35% interlude. Bank earnings seeing the typical mixed/skittish response, mostly fine and as-expected results, but yields and the fortunes of the broader reopen/reflation themes matter more in the moment. S & P Bank ETF retracing and testing its big multi-year breakout. AAPL is now getting the typical fundamental headlines and analyst calls that typically follow a breakout in share price. Market cap pushing $2.5 trillion. Mostly an abstraction, but while AAPL is working will make it harder for the indexers to feel much pain. AAPL valuation on forward earnings still below 2020 peak, though as with everything of quality not "cheap." The complaints about market breadth won't let up. Often this is a sign of waning rally energy that eventually reaches the overall tape. Note "often," not always and "eventually," not immediately. Today looks like 40:60 up:down volume, not atrocious but draggy. We're still rotating in a benign way, but with more slippage along the way. VIX eases back a bit, above the recent floor, not collapsing or complacent, stalled as the S & P hesitates near highs. A coincident indicator and at this point a non-signal but not a bearish one.

Traders on the floor of the New York Stock Exchange.

Source: NYSE

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

Still a hesitant, unbalanced market, propped by the familiar Nasdaq giants while most stocks slip. In all, the index is being held harmless by the growth bid while small-caps and financials struggle.