A week short in days, yet long in interesting moments.
The Warsh premiere, with hawkish subtitles, was delivered in style. The following day's rebound was somewhat unexpected to me, but I forced myself to stick to my factual observations from the deck and block out the "should be doing" narrative.
The dip was bought and the bulls wrapped up the week reclaiming some lost territory from the previous one, sending a signal that we are still playing in the bull market arena. Once again, hopes remain high for further cooling in both the oil market and, tagging along, yields.
The SOX pushed through another layer of turbulence and... yeah baby... all-time highs like it's April — or even May — again.
Semis Doing The Leg Work
The semis barometer — SOX — posted moves greater than +/- 5% in three of the four sessions, with the outlier being Thursday's post-FOMC session.
That was when I observed one of the strongest displays of resilience, still managing to close in the green while all the majors were succumbing to the higher-for-longer narrative.
If the FOMC session ended with a big question mark about where semis could go next, a new presidential tweet on Intel and perhaps fresh chip ambitions from Amazon pointed the way to a solid Thursday session, culminating in nothing less than all-time highs.
There Is More Hormuz To Be Priced In
Even after last week's spike immediately following the "Hormuz deal (for real)" tweet, the market found a way to build on further positive developments over the weekend.
WTI revisited the $70s handle for the first time in three months, which may once again have helped fuel a rotation, judging by where the Russell finished the week.
Next Week Horizon From The Deck
Micron, the "new" one-trillion-dollar darling of Jensen The Messiah Huang, is set to report earnings on Wednesday.
This one can definitely dictate the tempo of the AI trade in the near term, especially if something similar to Broadcom happens and the blue-sky guidance bucket is not only filled to the very top but actually overflows... well, the Trillion Dollar Club can also be pretty unforgiving.
On a more economic note, the post-Micron session will bring Core PCE alongside GDP and Personal Income, which, if we go back to how the market reacted to Kevin Warsh's first FOMC, can give us plenty to expect in terms of swings.
And above the clouds we will still have Hormuz, which, despite major advancements, can still provide a nice bucket of popcorn... very easily.
A Curious Post-Market Hint
I would feel remiss not to share a curious price action moment that occurred immediately after Wednesday's close.
Usually, I watch just a few minutes of extended-hours action after the bell. As trading wrapped up for the day on a very somber note, the leveraged ETFs of the major indices (SPXL, TQQQ, TNA), along with sector vehicles such as SOXL and TECL, all spiked almost instantaneously.
It caught my attention right away and left me wondering...
With the benefit of the rear-view mirror, we now know why.