$VIX is up double digits and AI/Tech complex is weak (concerns). NYSE Advancers outpacing Decliners, $RSP green, $JNK green intraday. 4 pm is the more important read. TBD. Click image to enlarge.

"Persian Gulf oil exports have surpassed prewar levels, as an improvised shipping system under U.S. protection is helping tankers move oil through one of Iran’s fiercest waves of attacks in the Strait of Hormuz." The Wall Street Journal

2000 vs. 2026: U.S. household balance sheets are substantially stronger in 2026 relative to 2000, as measured by aggregate net worth, financial assets, home equity, and leverage. Household liabilities have increased in dollar terms, but considerably less than household assets.

The inflation environment preceding the 2022 stock bear market was fundamentally different from what we see today. During 2021 and early 2022, a significant inflation shock helped trigger an aggressive Federal Reserve tightening cycle that ultimately included 525 basis points of rate hikes. Those policy changes had important implications for economic growth, corporate earnings, and stock valuations, even after inflation expectations began to decline. In contrast, five-year breakeven inflation has remained relatively stable in recent years, with the latest reading at 2.37%, well below the approximately 3.5% level reached in 2022. While inflation remains a legitimate concern, the current evidence does not suggest a comparable inflation shock that would necessarily require a similarly aggressive and prolonged Fed tightening cycle. IF (emphasis) inflation remains relatively contained, the implications for monetary policy, economic growth, and corporate earnings could be considerably more favorable than those experienced during the 2022 bear market.

The market remains vulnerable. If weakness continues, the evolution of weight of the evidence will assist with the "pullback/correction to be followed by higher highs vs. full-blown bear market vs. end of the secular bull" questions. TBD.

From @WSJ: "Only 37% of Democrats say their party should become more liberal, while a majority, some 52%, say the party should either become more moderate or stay the same." "In another sign of moderate impulses, two-thirds of Democrats in the poll said they prefer a candidate who reaches across the aisle in the spirit of compromise to pass legislation, far more than the one-quarter who want a candidate who won’t compromise on principles." "And more Democrats call themselves 'somewhat liberal' than 'very liberal.' They support centrist ideas such as border security, police funding and voter ID laws more than the very-liberal group does." A WSJ poll finds resistance among Democrats to a leftward shift for their party. Read more in today’s WSJ Politics Newsletter:

It is always better to prepare a game plan for a large market drop that never happens vs. not being prepared for a large market drop that does happen. #ContingencyPlanning# #RealisticExpectations# #DayByDay# #DataVsFear#

If the vulnerable S&P 500 hypothetically dropped from last week's closing high to Wednesday's rising 200-day moving average, that would be a normal pullback of 7.10%. All TBD. Day by day.