US STOCKS: S&P Pauses For A Breath With Eyes On All-Time Highs

The ESU5 overnight range was 6130.75 - 6160.25, Asia is currently trading around 6145. US stocks paused for a breath overnight after some impressive recent gains. The Russell 2000(-1.16%) and Dow Transports(-1.07%) both had decent retracements.

• Lance Roberts on X: “Now, while the bullish backdrop to the markets is intact, the crowd is being forced to chase long exposure heading into month end, which is squeezing skew higher.  Ultimately, this will revert. Use pullbacks towards support to add exposure as needed.” 
• “GS is tracking Q2 GDP at 4.1% annualized at the same time the economic data continues to underwhelm those expectations.” See Graph Below
• Bob Eliott on X: ”European asset managers were huge buyers of US financial assets in recent years.  That's now reversing and has a long way to run.”
• A quite remarkable turnaround for stocks, again points to a market that is still underweight as dips continue to be well supported and PM’s are being forced back in as price tracks higher. 
• This in the face of some well documented headwinds that have been building. These include: Share buybacks that are now in their blackout period, the absence of this large underlying bid reportedly around $40 billion a week, has barely registered for now. 
• This together with what looks to be some large month-end rebalancing was to provide some decent headwinds for US Equities in the short-term. 

• Zerohedge on X: ”Pension funds are estimated to sell $56BN in global equities at month-end: UBS”

  Fig 1: Financial Conditions Vs Economic Surprise Index

  

  Source: @LanceRoberts