Santoli’s Friday market notes: The S&P 500’s latest slip brings it closer to a key level for investors

Published Fri, Sep 10 202112:57 PM EDT

This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. A slow bleed lower through the week. Not a rush for the exits, but a hesitancy to add equity risk given a sense that the fundamental soft patch and policy trigger points have opened a window for seasonal weakness to manifest. Cursory overnight bounce in index futures loosely attributed to a Biden-Xi phone call unwound, giving way to a muted, tetchy and mixed tape. The slippage is taking the S & P 500 down toward a challenge of a year-long rally trend line, along with its 50-day average and the 4,370 where the index found traction a few times going back to July. Still routine, but close to a zone where tests would be relevant. AAPL also retreating toward the $149 to $150 level from which it broke higher in the latest grabby-seeming push to the recent high. More important as an index input (~6% of the S & P 500) then a macro or fund-flow bellwether. The rest of FAANMG hangs in OK for now. If the S & P 500 finishes down it would be a fifth straight daily loss, yet with an aggregate decline of less than 1.5% at this point. The rotational energy remains, only a bit sloppier than it's been. Cyclical sectors holding up better than defensives today. The market has been digesting and meting out corrections to groups along the way. A quarter of the S & P 500 members are at least 15% off their high, with 40% of names off 10% or more. Is a "catch-down" move for the S & P in store, or might the market's little stumble be a trap for newly emboldened bears? Covid case data is getting no worse; it's still plausible we've seen a local peak in delta intensity. The PPI number was elevated vs. expectations, though seems not to have altered the general sense of lingering cost pressures for businesses. Industrial metals also continue to rally, a somewhat encouraging global macro indicator while also serving as ammo for the "sticky inflation in stuff" camp. The sense that the Fed is on track to follow other central banks toward tapering asset purchases and starting the clock toward less-generous policy is helping to keep market-implied future inflation expectations in check well below springtime highs. Still no sign of macro stress or risk aversion building up in credit markets, corporate debt still very well-bid. This argues against the idea that stocks are picking up fresh signs of outright economic weakness beyond what we're already seeing. Though it must be said that in a couple of recent market skids credit followed stocks lower rather than led the way. Market breadth is nearly evenly mixed, slight negative tilt advancing/declining volume.

Traders on the floor of the New York Stock Exchange (NYSE) in New York, on Wednesday, Aug. 11, 2021.

Michael Nagle | Bloomberg | Getty Images

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

A slow bleed lower through the week. Not a rush for the exits, but a hesitancy to add equity risk given a sense that the fundamental soft patch and policy trigger points have opened a window for seasonal weakness to manifest.