This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. Broad indexes doing their best to sidestep big-cap earnings blow-ups, fast-moving macro inputs from bonds and straight fatigue following a quick three-week climb and seven-day win streak. A perfectly apt moment for the S & P 500 to pause slightly above the old record highs, but the bid in cyclical sectors just strong enough to hold the index mostly steady. Still could see a bit of backsliding (long daily upside streak + quick revival of bullish sentiment/positioning sets one up, perhaps) but could drop 3% and still be in a pretty upbeat seasonal/technical set-up. Bond market has been rushing to price in quicker Fed rate hikes next year and maybe build in some risk that they might prove a mistake (of less good than harm) if they happen. Short-term yields ramping while the Treasury curve flattens. The current debate: If Fed rate hikes are no solution to supply-chain drivers of goods inflation, should the Fed really revamp its timetable? What if it's not just the supply chain, but the labor market is about to get rapidly tighter? So far stocks OK with all this as it is premised on high nominal growth (real growth + higher prices) and the consumer/business spending trajectories give enough for stock pickers to fall back on. SNAP earnings shocker rocking the entire digital-ad food chain. On one hand, that's what happens when a stock valued > 30x sales and was promising 50% annual revenue growth hits a wall and revises growth down to 30% for the coming year. On another, suggests business-model tweaks and transitions underway to work around ad-measurement challenges. The impetus to reach mobile-phone junkies isn't going away, all about how the social-media platforms can create new tools to reach them. One interesting result: For the first time in its history as a public company, Facebook trades at a discount to the S & P 500 based on forward price/earnings ratio: Banks and consumer-finance companies have no quit. AXP earnings builds confidence in spending/travel outlook. Transports having another strong day in fast catch-up mode, with zero help from airlines. The takeaway from the tape is positive for the domestic economy for sure. How markets navigate the monetary-policy implications for valuations is TBD. Wild action in DWAC hogging all the adrenaline from "legacy" meme stocks AMC and GME . A viral buying stampede amplified by partisan energies. DWAC already traded $10B worth of shares today, the same small traders and bots shuttling the entire float around many times over. For comparison's sake: Apple, with its $2.5 trillion market cap, has today turned over $5.3 billion worth of shares. Market breadth is almost dead split up vs. down stocks and volume. VIX has some lift, not much, still under 16, but I wonder if it can slide too much more from here. Earnings season causes lots of divergent stock moves, which suppresses index volatility and can restrain VIX, but bond-market volatility is surging and Fed meeting in 12 days is going to start getting more trader attention.
A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 5, 2021.
Andrew Kelly | Reuters
This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics.
- Broad indexes doing their best to sidestep big-cap earnings blow-ups, fast-moving macro inputs from bonds and straight fatigue following a quick three-week climb and seven-day win streak.