takes A Licking and Keeps on Ticking

 Friday 120/9/2026

Takes a Licking, Keeps on Ticking

 

Our title is the by-line of Timex watches. Back in the 1950s. Former newscaster John Cameron Swazye would feature a Timex watch in a grueling situation, say tied to an outboard motor at speed. After a high-speed run, the camera would do a closeup to show the watch running,  Swazye would exclaim the Still Ticking by-line.

We can same thing about today’s stock market. Here is the ‘box score’ which would have decimated any ordinary stock market.

Mortgage rates soar to 7%. Thirty-year Treasury bonds yield 5.6%. Brent Crude oil at $102.74. Presidential approval ratings are under 40%.

But the stock market keeps on ticking. Yes, all three DOW measures, Industrials, Transports, and Utilities have made tops this year.

But he SPX and NDX hit new highs, how is this possible?

Three stocks account for 21% of the SPX capitalization. Apple AAPL, Nvidia NVDA, and Microsoft MSFT by market capitalization are worth 21% of the SPX. This means the other 497 stocks amount to 79% of the value.

But even then, a handful of stocks make up the next 20 percentage points.

Companies ‘investing’ in Artificial Intelligence AI are known as hyper-scalers. These include cash rich Alphabet (Google, Amazon, Microsoft, and Meta (Facebook).  These firms have raised hundreds of millions in recent debt offerings. The bet is that their customers will have enough cash to ‘invest’ in their AI offerings. More analysts are beginning to doubt that strategy but for the time being, the markets literally buy into that story.

For the first time in my memory, a President  waging  a ‘war’ has announced what he won’t do, attack Iran before the mid-term elections.

Discouraged at the Hormuz Strait, Iran turns to the Houthis now slowing traffic through the Red Sea, aka the Bab el-Nabdeb Strait.

None of this is lowering the price of diesel fuel now averaging about $5.50 nationwide. Truckers are asking /west Coast ports to assist in paying their high cost of diesel to transfer the shipped goods over land.

The Socialists have run out of other people’s money, again. France is broke, protests/riots in Spain and France. Undeterred, Britain’s PM Andy Burnham want so cast off all things Thatcher and move way left.

Here, also undeterred, the /Democrat Socialists look to win House seats and are neck and neck in the Minnesota Senate race. Texas may get its first Democrat Senator since 1994. Governor race is a toss-up. Point being the negative mood is generating a throw the bums out attitude in many arenas. A  Democrat House plans revenge on Trump.  That negative mood will eventually work into the markets but not quite yet.

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