This is a daily notebook by Mike Santoli, CNBC’s senior market commentator, with ideas for trends, stocks, and market statistics. There are plenty of reminders of unresolved/unwelcome issues (weak housing/services data, energy stress in Europe), but shortfalls follow in most regions. Stocks today are remarkable. A slight drop in the US dollar and Treasury yields added some pressure on equities, with a weak Services PMI leading to an explosive wave of bond buying. It’s hard to get excited when weak economic indicators drop slightly 10 years back below 3% in the short term, but here we are. The S&P 500 Index is in the hazy zone, a 4% to 5% pullback after a 17% rise is not a serious reversal, but the band and trading sentiment are fragile. Any drop to the high of 3,900 would still be fairly routine but may not feel the same. Still think the force of the rally from the June lows offers a good stepping stone in the absence of further significant macro shocks. Well, the index has stopped at the 200-day average almost so far. It also coincided with a rebound above 18 times earnings 12 months ago. This was the pre-pandemic valuation ceiling and appears to be an area where macro/index investors have lower buying demand. Though as previously noted, the index-topping giant-cap growth stocks (AAPL, MSFT, AMZN, TSLA) continue to raise the benchmark’s P/E to higher levels than even the weighted S&P equal number and small cap value. Opinions are divided over whether Federal Reserve Chairman Jerome Powell will make a clear attempt at Jackson Hole on Friday to tone down hopes of a “dovish pivot” with a tough message of filial piety. incessant war on inflation or not. Looks like he will just reiterate the existing framework (needs to see clear evidence of a downward trend in inflation but more tightening is underway, some rallies are premeditated and we’ve got it). neutral policy). The PMI for services deteriorated rapidly (indicating a gradual monthly decline) and a sharp drop in home sales led to the view that much of the Fed’s intended work has been done. Of course, a soft landing is not a foregone conclusion, but neither market is completely assuming it is one. Mention fragility sentiment: There is no clear buy-in to the “new bull market” thesis. The deal/call ratio has edged higher over the past two days due to a modest drop. The big hedge funds are just net selling on a record of the S&P 500 index (not a perfect contrarian indicator – from late 2015, still have many bearish months ahead), but it shows positioning. Hedging/bearish has become quite stable. Commodity trade got some life, with crude oil up 3%+ and threatening to break a minor downtrend that has been in place since June. Metal bouncing. They are still much below their highs but need to be monitored. Market breadth is decent, volume is up 60% on the NYSE, but like most other indicators is in the middle/indeterminate. Credit is OK. VIX holds the second place, it will probably be a little slower to drop to Jackson Hole and September will come.