This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. Modest relief as the S & P 500 makes a stand at the lower end of its "range within a range" and investors for now seem willing to run with the themes of possible "peak-flation" and a strong transition of consumer energy to services from stuff. The indexes are still down small for the week and the afternoons have been heavy, but the tape hasn't buckled and there has been enough two-way action within the market to keep things together. Here's the S & P 500 since the Jan. 3 peak. Getting a foothold near 4,400 has kept it out of the breakdown zone: As feckless and unreliable as the broad market has been, it's worth noting the S & P has spent very little time so far below the late-January lows, despite the onset of the Ukraine war, further Fed hawkishness, the Treasury yield curve inversion and oil spiking above $125. Is it resilience in a very mixed, defensive tape? Or another dangerous shoe to drop? The game in the early Covid days was to anticipate the "bending of the curve" of case counts. Now it's about handicapping a bending of the inflation curve. The data this week give only halting evidence of a peak, but the market has at least found enough in the cooler core readings and makeup of the recent inflation drivers to price out a bit of Fed tightening on the back end of this expected rate-hike push. You can see it, barely, in the two-year Treasury yield easing back to 2.31% from 2.6% a week ago. Want a picture of the market's embrace of the "experiences over goods" hand-off? How about Delta Air Lines and Hilton compared to GM and Whirlpool ? This theme is already popular, but it probably has some room to go. The issue for the broad market is this: The S & P is more a play on goods than services, in terms of market-cap (at least outside of financials and some tech). Good news for economic activity, broadly, though. Response to JPM earnings is a bit of a further pile-on, given big reserves and more cautious commentary from management. What's really hampering the banks is the sense that we rushed into the later part of the cycle, the part where it's all about watching for credit losses to pick up, and less about loan growth, passive nursing of net-interest income and capital return to shareholders. It's a troubled group, technically, but valuations are down a lot and any sense that the recession watch is dramatically premature would give them a serious lift. Market breadth is quite strong, a third day in a row when the typical stock is doing better than the indexes make it appear. Today more than 80% of volume to the upside right now – both a strong bounce in the recent downside leaders of the Nasdaq and gains in the rank-and-file. VIX back down in the 22s and the VIX futures curve back in their benign "normal" state as hedgers and speculators relax a bit after the super-hot producer price index report today failed to faze the buyers — so far.
Traders on the floor of the NYSE, April 4, 2022.
This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics.