What an interesting day. Equities opened on weakness in response to a much hotter-than-expected report on producer level inflation for the month of July. However, throughout the session, investors steadily bought the dip and gained confidence going into the closing bell. I don't know if this late optimism came in front of President Trump's meeting on Friday in Alaska with Russian President Vladimir Putin or if this late burst in sentiment came ahead of Friday's releases of July Retail Sales and July Industrial Production.

There were two other items. Jefferies Market Strategist David Zervos, who has been mentioned as a potential candidate for Fed chair come May, spoke on CNBC. Zervos sounded about as dovish as one could. I guess he really wants the job because he sounded like he was auditioning. I have been outspoken about wanting lower rates, but even I tapped the brakes after this morning's PPI print. I was actually embarrassed for Zervos after that interview.

Secondly, Intel INTC spiked into the close on a report at Bloomberg News speculating that the Trump administration might be considering having the U.S. take a financial stake in the firm. I was part of that rush and now have a few shares of Intel in inventory. Intel ended up as the day's top performer in the S&P 500. Tapestry TPR was the day's worst at -15.7%.

The major indices closed out the session flat after that run into the bell. The S&P 500 closed up 0.03%. Yes, that's a new record high. The Nasdaq Composite gave back just 0.01%. So, no new record close there. Traders did take profits across the small caps and the transports. The banks and pharmaceuticals were strong today as yields backed up across the slope of the Treasury curve. The materials gave back some of this week's gains as the U.S. Dollar Index strengthened.

It's been a pleasure, gang. May until August is probably the longest I've gone without subbing for Dougie in years. Hopefully, it's not three months until next time. I enjoy the group. I like to think of myself as Earl Morrall to Dougie's Johnny U. I'd rather not be Marty Domres who replaced Morrall as Unitas' backup after Don Shula grabbed Morrall to back up Brian Griese in Miami in '72. God bless. 

I think this question was probably too difficult. Sorry guys. So far, I have only seen one member of our team get one of the four correct. That was Rojizo. Well, let's get to the answers...

Q)

Since integration (1947), only four major league hitters completed a season with an on-base percentage of less than .325 despite a batting average of .300 or greater. Minimum 500 at-bats. Hint: All four seasons occurred in between 1976 and 2003.

A)

1. In 2000, Detroit Tiger shortstop Deivi Cruz hit .302, but was only able to post an on-base percentage of .318. He did hit 10 HR and post and OPS of .767.

2. In 1976, Chicago White Sox outfielder Ralph Garr hit .300, but was only able to post an on-base percentage of .322. He only hit 4 HR and posted an OPS of just .709.

3. In 2003, San Francisco Giant centerfielder Marquis Grissom hit .300, but was only able to post an on-base percentage of .322. He did hit 20 HR and post and OPS of .790.

4. In 1987, San Diego Padre catcher Benito Santiago hit .300, but was only able to post an on-base percentage of .324. He did hit 18 HR and post and OPS of .791. 

On Thursday, August 21, ahead of the opening bell, Walmart WMT will report the firm's second quarter financial results. Expectations are for an adjusted EPS of $0.74 on revenue of $174.2 billion. 

This would compare to the $0.67 reported for the year-ago comparison on year-over-year revenue growth of nearly 4%. This would be an acceleration from 3% sales growth sequentially and in line with prior quarters. 

Of the 33 sell-side analysts that I can find who cover Walmart, 24 have revised their earnings estimates higher since the start of the quarter, while five have revised those estimates lower and four have sat on their hands.

The Chart

I think there is some potentially significant risk present in this chart. I nearly tricked myself when studying this chart, and I'll show you how. At first, I thought I saw a cup-with-handle pattern, which would be bullish. I left that pattern on the chart for you. Then I realized that I might be looking at a double-top pattern of bearish reversal. Even if wrong, this chart illustrates that elevated risk. The downside pivot is all the way down at $80. This would be a 20% haircut just to get to the pivot. Scary.

As for the indicators, above the chart, the stock's reading for relative strength is better than neutral. However, while the daily MACD appears to still be bullishly postured, readers can see that the histogram of the nine-day EMA appears to be headed lower towards the zero-bound. Additionally, the 12-day EMA appears to be curling lower towards the 26-day EMA. Such a crossover could be interpreted as a short to medium-term bearish signal. 

Since integration (1947), only four major league hitters completed a season with an on-base percentage of less than .325 despite a batting average of .300 or greater. Minimum 500 at-bats. 

Hint: All four seasons occurred in between 1976 and 2003. 

For the quarter about to be reported, expectations are for Palo Alto PANW to report an adjusted EPS of $0.89 on revenue of $2.5 billion. This would compare well to $0.75 per share for the year-ago period while reflecting sales growth of more than 14%. This would be in line with the firm's recent past as Palo Alto has reported year-over-year sales growth of between 12% and 15% for five consecutive quarters.

Interestingly, and I don't know if this is meaningful or not, of the 44 sell-side analysts that I can find who cover the stock, 37 have revised their earnings estimates for the quarter higher since the period began. Only one has revised his numbers lower, while six have sat on their hands.

Readers will see a very broad triple-top pattern of bearish reversal that began in earnest about a year ago. The pivot is much lower, down at $144 so there is indeed some risk present in this chart. This week, the stock has started to rally a bit and is looking to possibly test the stock's 21-day EMA from below. Taking that line would get the swing crowd behind the stock and potentially allow for a run at the stock's all-important 200-day SMA. That's where the professional money has to make a decision.

Note that relative strength is now off of its weakest reading and is approaching a more neutral setting. Looking below the chart, we see a daily MACD that has been weak, but is strengthening going into earnings. Within that indicator, the histogram of the nine-day EMA is still in negative territory but is ascending towards the zero-bound rapidly. In addition to that, the 12-day EMA is curling up towards the stock's 26-day EMA. Though both are still in negative territory, a crossover there would be seen as technically helpful for the bulls. 

...Where no one has gone before. 

After a little bit of merge-related ridiculousness, Paramount Skydance (PSKY) appears to be back on trend.

Buy it here? Definitely thinking about it. Would love to get some near the central line of my Pitchfork model.

Not often you see four consecutive bull flag patterns. Adding some AMD on today's weakness. 

The Trade Desk TTD is down 6.5%on news that a report appeared in The Information that claimed a new arrangement between the firm and Walmart WMT (one of the Trade Desk's most important clients) would no longer be exclusive. 

Readers will recall that I went bottom fishing in this name last week and initiated a long position. Thankfully, I never grew this position beyond that initial trade. My 8% rule has been triggered by this news and I am out at a small loss. 

Reuters is reporting that the U.S. Navy and U.S. Air Force are possibly considering cancelling two nearly completed software contracts and reopening the bidding to other platforms that had not been previously available. At stake is the overhaul of the U.S. Navy, U.S. Air Force and U.S. Space Force human resources systems.

The Space Force may want to use a different platform than its parent, the Air Force. The Pentagon is said to be working to quickly update the Department of Defense's antiquated contracting process while ensuring no taxpayer dollars are wasted.

Firms likely to benefit from a reopening of these contracts would be Salesforce CRM, Palantir Technologies PLTR and Workday WDAY. Firm's likely to not benefit from a reopening of these contracts would be Accenture ACN and Oracle ORCL. 

On Wednesday, President Trump signed an executive order that will ease regulation for commercial spaceflight. 

The statement released by the White House notes, "Inefficient permitting processes discourage investment and innovation, limiting the ability of U.S. companies to lead in global space markets." 

The order directs the Secretary of Transportation to eliminate or expedite environmental reviews for launch and reentry licenses and permits. 

"Outdated or overly restrictive rules" are to be eliminated. This order could likely be expected to benefit SpaceX, Rocket Lab RKLB, Firefly (FLY), Lockheed Martin LMT, Boeing BA, Northrop Grumman NOC, Blue Origin and Virgin Galactic SPCE. 

With the probability for something dovish from Fed Chair Jerome Powell rightfully diminished next week, I am taking some profits across Peloton Interactive PTON, though my target price remains $9. 

I am also making sales into strength this morning in both Palantir Technologies PLTR and Rocket Lab RKLB. I have not lost faith in either stock. They are still my number one and number four stocks in terms of weighting. Just right-sizing these positions ahead of next week as they have become much larger in terms of exposure than would be prudent. 

Upside:

-SNOA +107% (announces launch of diaper rash product in Walmart and other U.S. chains)

-WULF +27% (signs 200+ MW in two 10-year high-performance computing (HPC) colocation agreements with Fluidstack; Google receive warrants to acquire ~41M shares of TeraWulf common stock)

-DLO +25% (earnings, guidance)

-BMRA +22% (UAE Ministry of Health and Prevention approves Biomerica’s Fortel Ulcer Test for Home Use)

-GRRR +17% (earnings, guidance)

-RRGB +12% (earnings, guidance)

-BLSH +8.9% (post-IPO momentum)

-OBIO +4.9% (announces Publication of AVIM Therapy Clinical Data in JACC: Advances Demonstrating Potential to Improve Cardiac Function in Patients with Hypertension and Diastolic Dysfunction)

-EQX +4.1% (earnings, guidance)

-VIPS +3.2% (earnings, guidance)

-WB +3.1% (earnings, guidance)

-HITI +2.4% (to acquire majority stake in Remexian Pharma GmbH)

Downside:

-IBTA -36% (earnings, guidance)

-ATNF -23% (enters $500M at-the-market sales agreement with Clear Street LLC)

-COHR -18% (earnings, guidance)

-SDGR -16% (announces discontinuation of SGR-2921 Program in patients with relapsed/refractory acute myeloid leukemia or high-risk myelodysplastic syndromes)

-BMBL -13% (shareholders offering share block at discount to closing price)

-LUNR -11% (prices upsized offering of $300M in convertible senior notes due 2030 [upsized from $250M])

-TPR -11% (earnings, guidance)

-PAGS -6.6% (earnings)

-NTES -6.0% (earnings)

-DE -5.6% (earnings, guidance)

-BIRK -5.0% (earnings, guidance)

July Producer Prices just crossed the tape and the numbers are hot. Nobody looking for a large rate cut (Sarge staring sorrowfully into a mirror) in September or a series of rate cuts that get the Fed Funds Rate considerably lower over a few months is happy. Clearly, unless consumer prices follow producer prices in short order, corporate margins will be compressed. Clearly, it is going to be more difficult now to get where I had wanted to see the yield curve. Now that these numbers came in on the wonky side, I am going to have to write a feature piece for the TheStreet Pro. I will inform the chat once that piece is published.

(All times Eastern, expectations are my own)

08:30 a.m. - Initial Jobless Claims (Weekly): Expecting 223K, Last 226K.

08:30 - Continuing Claims (Weekly): Last 1.974M.

08:30 - PPI (Jul): Expecting 0.2% m/m, Last 0.0% m/m.

08:30 - Core PPI (Jul): Expecting 0.2% m/m, Last 0.0% m/m.

08:30 - PPI (Jul): Expecting 2.4% y/y, Last 2.3% y/y.

08:30 - Core PPI (Jul): Expecting 2.7% y/y, Last 2.6% y/y.

10:30 - Natural Gas Inventories (Weekly): Last +7B cf.

S&P Futures: -2 vs FV.

Nasdaq Futures: -2 vs FV.

US Ten Year Note: 4.21%

US Two Year Note: 3.67%

US Three Month T-Bill 4.21%

US Dollar Index: 97.83, flat.

Gold: -0.17%

Silver: -0.59%

Copper: -0.4%

WTI Crude: +0.43%

Bitcoin: -1.56%

Tis' Thursday. Tis' July PPI Day. One day ahead of the big Alaska Summit. One week ahead of Jackson Hole. Gang. I have bad news for you. Dougie is out today. However, I also have good news. For the first time since May, it is I, your old buddy Sarge, who will do his best to fill in for his legendary majesty this day. So, prepare. Hydrate. Coffee. get that blood moving. Exercise. You know the drill. We start the day by getting our aggression going. Why? Why not? There are dragons to slay and money to make. For this day is a gift from above. Let's show gratitude for this gift and make it count. We win. When? As often as possible. We never lose for lack of effort. When we do lose, we learn. Those are the rules. This is our code. So... a big, fat good morning to you and yours. This is Thursday. There have been and there will be many days like it, but this one is mine. Let me hear you roar and let us rock. Always faithful.