Capitulating bears – is not really an indication of an imminent top, but is such analysts failing to thinking ‘outside the box’ a bit about the leadership over the past year, and the lukewarm (at best) behavior of much of the rest of the list. depositphotos I do not think people are as ‘over-excited’ about stocks as bears contended. To the contrary, I sense (and feel) frustration that so few stocks participated. In fact that’s a bullish argument for the future, given that money managers are pressed to find ways to capitalize on potential upside ‘without’ working harder.By the I mean a lot of managers try to keep life simple, buy Indexes or ETF’s, and go play golf or whatever. Do I think the ‘mega-caps’ can replicated what’s already occurred? Nope. But S&P (SPX) can grind higher if the backfilling I’d talked of continues, while smallcaps that actually (or finally) have business models or reformed their modes by ‘not’ raiding their stocks like it was management’s ATM cash machines… well such stocks have opportunity to attract investors.  For much of the year I’ve contended ‘geopolitics’ as the biggest concern, not the Fed (which will hold steady until they ease apparently.. and meanwhile the higher yields are a boon to retired baby-boomers who often see more return).Geopolitics remains foremost, along with the idea of things not to be ruffled too much ahead of Elections (though I have this wildcard thought that one of the candidates might not be the candidate after the Convention, and that might be ‘why’ the first ‘Debate’ is being held so early in June, before the Conventions…I think it gives time for ‘backroom dealing’ if that’s determined by one Party).  Now as far as Iran, well, karma had its way. Probably will not change regime, as the great majority of its leaders, enforcers known, are primarily IRGC (with their intolerance for everyone pretty much). However, to lose both President and Foreign Minister is likely to impact policies, based on the replacements.In Iran, the President is supposedly the chief officer for executing domestic programs, and Foreign Minister the chief officer for executing foreign policy of the leader. However Raisi tended to overrule everything, as hit interviews on NBC revealed, and other comments that showed his lack of any humanity. It really is sad, because Persia was not Arab, didn’t engage in modern bigotry until the Ayatollahs, or promote infiltrating (not just as refugees) distant parts of the world such as happened to parts of Europe. Quite a muddled region.Fortunately ‘both’ these Islamic thugs are gone, but nobody knows yet what’s next, and ‘el supremo’ is still there. The people of Iran mostly prefer freedom, and return to fairly normal lives that prevailed in pre-Islamic Persia (Iran). It’s unlikely however, that the world we be so blessed, but one can hope. Absent that the best one can hope for is a ‘Saudi/Israeli/Jordanian’ Security alliance. Of course Tehran ‘blames’ US sanctions for lack of ‘Eli Copter’ being able to get ‘parts for maintenance (that’s the joke after one of their radicals actually said that was the pilot’s name). I point out Iran has Russian, French as well as newer Italian helicopters, so there’s no reason they had to use very oldest but I suppose that’s karma too, the old Bell was the least likely to make the trip.  Market X-ray: Hard to assess implications of Iran being bereft of two of the most vehement zealots, but if Washington, Jerusalem and Riyadh were very smart, they’d try to secure a regional ‘security alliance’ right now, while Iran is at minimum distracted while they mourn (or celebrate) Raisi’s death.S&P continues to look toppy and we are definitely open-minded to more rest or even something nastier, but much depends on events. Risk in the market is somewhat displayed by a stocks we do ‘not’ follow: Palo Alto Networks. So PANW missed by 5 million, which pundits say is a ’rounding error’. And their CEO says all was ‘better than expected’. Ah ha…but the shares plunged 27 or so in aftermarket trading. That’s sort of a ‘take no prisoners’ reaction.The flow of funds has persisted, and muddled through heavy May seasonality. Of course it’s breadth that matters now and going forward, and nothing terribly fresh is occurring. So S&P can be termed overbought but not overloved, since skepticism continues to dominate, even as most bears by now capitulated. I’m open to an intraweek rally effort and even a subsequent pre-holiday fade. Bottom-line: New closing record for S&P, while DJIA dropped a bit. So for the moment you’ll likely see dips bought ahead of Nvidia (NVDA), then we’ll see. There is almost no prospect for significant S&P advance directly here of a meaningful macro perspective, but certain small-caps could persevere. S&P nominally so.More By This Author:Market Briefing For Monday, May 20, 2024
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