Golden Path & VIX 50-Day Moving Average
Absent any macro news, earnings and fundamentals should re-dominate the narrative with Golden Path
Recap
VIX closed back below 50-day moving average
New 52-Week Highs vs New 52-Week Lows
NYSE New 52-Week Highs: 127 vs New 52-Week Lows: 17
Nasdaq New 52-Week Highs: 126 vs New 52-Week Lows: 90
Market has resumed bullish with New 52-Week Highs > New 52-Week Lows
New Highs - New Lows
McClellan Oscillator
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Posts of Interest
I have said this many times over the past few months—do not underestimate Golden Path. Golden Path is going to continue to be more bullish than expectations and this Japan Yen Trade to recession fears was the buy the dip moment. This is economic Goldilocks and soft landing is pretty much going to happen based on the jobs, retail sales, and inflation data we continue to see.
Per Fundstrat, about 91% of the S&P 500 companies have reported and 79% are beating expectations, beating by a median of +6% and the other 20% who are missing expectations, missing by a median of -5%.
And Walmart’s earnings denied any recession fears:
Walmart's raised full year sales outlook reflects the retailer's confidence in the value-seeking consumer and consistent performance.
The consumer is still hanging in, being choiceful, discerning, and looking for value and convenience.
International business at Walmart has turned the corner, indicating potential growth and success in global markets.
E-commerce momentum in the US is off the charts, with continued growth and a focus on membership income.
Core e-commerce was the biggest single contributor to Walmart's operating income in the quarter, demonstrating the significant impact of online sales on the company's profitability.
Walmart Plus members shop with us about three times more frequently than an average customer, making it a large contributor to our operating income.
"We're gaining share and customers. Our value proposition is resonating with them."
On top of that, we are starting to see AI contribute productivity gains
Container shipping rates rising while goods is seeing falling prices it very interesting—the consumer is continuing to spend but more on value items as Walmart shared. Nike to Starbucks, etc. are saying they cannot raise prices and are focusing on product price points that better serve price-conscious onsumers.
Goods continue to be in deflation, which is good news for 2.0% inflation target.
This is bullish as well for shelter inflation
With strong jobs and no mass layoffs, American consumers continue to power economic growth.
Initial Unemployment Insurance Claims are a leading indicator and it’s nothing recessionary.
Forecast
The big risk event coming up is the Jackson Hole meeting, which I think will be bullish for the markets.
The market is still in fear, so expect us to grind higher.
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