Euro stocks up on rebound day. Rebound for the US, because Euro stocks are in no kind of correction. They follow in fact one of the cleanest uptrends ever, look at the chart of the STOXX 600. The glory and damnation of the AI just passed by Euroland with no effects.

Yesterday, the market punished NVIDIA because, if things are so good, why are they so intent into financing everybody to buy back their chips? The market is fed up with so much data center capex. That and reports that China has started manufacturing machines to etch advanced chips, that hurt too.

China ADDED as much electricity generation last year as the entire generation of Germany... And people still think that the power-hungry AI will be computed in the US instead of in China.

For anybody thinking about keeping SpaceX stock after the first days, have a look at Rivian's chart. Rivian went public when the EVs were all the rage, like the semis today. Everything passes, there is a new rage and then investors ask about financial performance, and you get a chart like that.

There was absolutely no weekend covering, at least not in the Nasdaq, the Russell was a bit more cautious. Investors have suddenly realized that to solve the oil crisis all you have to do is to ask ChatGPT to design a "Mr. Fusion Home Energy Reactor" like depicted in Back to the Future. No worries!

My disappointmeter is pointing to "very high" chances of weekend disappointment, basically because the expectations are so huge. Anything less than a 120 ships a day crossing the strait without hindrance would be a less-than-expected outcome, at least considering the price that oil is marking today.

A tale of two tweets: First one, unhinged and desperate, did not move the weekend futures at all. Second one, hopeful, sent the oil futures down and stock futures up. So the markets keep being desperate for good news, and wanting to believe them, in spite of all the previous disappointments.

Surprisingly enough, I still read and listen to market comments that grab the "war will finish in two or three weeks" part of the address as the last hopium straw they can find. It's not that they are trying to manipulate the market, I'm sure, they are just very long and suffering, and hope counts.

High Yield bonds keep crashing too, not to be forgotten. This is a measure of the faith in the general economy. It seems to be faltering.

After a tremendous run, high yield bonds, that had taken the first week of war in stride, are now correcting, yield gap gaping. Now we have to choose the main cause, whether it's war and uncertainty, or the private credit cracks. I vote for private credit because the first week of war was quiet.

The fight of the SP not to lose the 6900 is epic. And curious, other days, like yesterday for example, options sellers had no problem letting it be crossed, to recover it at the session's end. But today they have gone full Gandalf on that level. I guess they fear that if lost today, is lost for good

Detailed technical chart of the day:

Apparently $250b, just in cryptos, I wonder where they are gone.

I cannot avoid it. Every time I write "anything goes" I think of this :-)

In one week, we'll have the TSLA results. It's always an uncomfortable time for Tesla investors, as reality will intrude in Fantasyland. Fortunately, the effect is fleeting.

The Leading Economic Index kept its downward walk in August, expanding an uncommon divergence with the ever-rising stock market.

Mr. Bahnsen of the Dividend Cafe shares this chart. There is not much to add to it.

US market cap is again double the GDP. It's just numbers, I know, but somehow it seems reasonable that there must be some relation between the value of the traded companies and the total output of the economy. 150% was enough to puncture the Internet bubble in 2000.

On the topic of "hard" data resilience vs "soft" data negativity, we have the medium-hard LEI. The Conference Board Leading Economic Index for the US fell sharply by 1.0% in April 2025 to 99.4 (2016=100), after declining by 0.8% in March (revised downward from the –0.7% originally reported).

The market kept rising on diminishing breadth. Now four consecutive sessions with negative breadth. Indexes can go up on negative breadth, but the Magnificent 7 now aren't what they were. Wait till the McClellan oscillator closes up the lower dotted line, after being down it. Usually works.

Equal weight SP500 underperforming in the last sessions. McClellan Oscillator turning down on lackluster breadth. This is a market being hold up by the big names and little else. That's not a good structure.

The FX market, the most liquid and less emotional one, has never bought the "nicer headlines" narrative. The US dollar keeps subdued. Tonight, bonds again at their red lines, although the 30Y won't touch its by a smidge. It's like it's saving it for a special occasion.

So, tariffs. Big picture, the main characters are first, the EU, yes, they trade a *lot* more than China with the US. Second Canada and Mexico, yes each of them trade a lot more than China, then Southeast Asia considered as a block. And then China. China is just the poster child. (source: Wikipedia)

Container volume is going to drop next week, even more the week after. It reminds us that the consequences of the trade war have a delay to become apparent. Well that delay is mostly over, so perhaps next week we'll see some more action about ending the tariffs nonsense. #EconSky

This is a weekly chart of the SP 500. Look at the last weeks, then look at the rest. That should be enough to convince you that we are in a different environment. When the environment changes you change your mind. Don't think that the "markets always go up" mantra cuts it anymore. #EconSky

This is a chart of the first tariffs trade mini-war, end of 2018. Notice the first leg down, the two rebounds to the 200D average, and the final leg down, 20% total from max. We could be repeating history, only the second rebound is not guaranteed, and of course the 2019 recovery neither. #EconSky

The 9 trillion conundrum. 9 trillion is the amount of US Treasury debt to need refinancing this year. Talk about a second mortgage! Like a light-year, the enormousness of a trillion precludes imagination. Anything that derails the rollover can cause waves much bigger than any tariffs. #EconSky

GDPNow estimate for Q1 still very low. Some say that the humongous gold repatriations of late (caused by fear of tariffs) have discombobulated it, but won't affect the real GDP. OK, but I'm still trying to wrap my head around a estimate that uses data that won't be in the real one. #EconSky

Shiller's PE still on 35, even after the correction. One of the fundamental questions for investors is if the "neutral" PE, that was about 15 long time ago, has moved. It seems to have moved, but is the new normal 20 or 25, or other. Anyway 35 seems too disconnected from reality to be true. #EconSky

White House adviser expects US GDP growth of at least 2% to 2.5% in Q1. They should exchange views with the Atlanta Fed, a bit of a round table to reach a consensus...