In this August 3, 2026 market‑update video, Kenny Polcari opens from his Florida office and delivers a rapid briefing on the latest equity, bond, commodity and macro‑economic developments. He notes that Friday’s market split was driven by investors rewarding AI‑related earnings winners (notably Amazon) while penalising AI‑promises (Apple). Amazon’s 15% jump to $271.58 is attributed to stronger AWS margins and tangible AI‑infrastructure returns, whereas Apple fell about 7% after a softer outlook tied to supply‑chain constraints. Sector performance showed limited breadth: consumer discretionary rose mainly due to Amazon, while basic materials, utilities, financials and other defensive sectors lagged, reflecting a rotation toward growth and higher Treasury yields. He discusses the bond market’s rising yields (2‑year at 4.28%, 10‑year at 4.73%, 30‑year at 5.26%) and explains why long‑end yields matter more for the real economy than Fed policy. Oil prices slipped after a geopolitical de‑escalation involving Trump and Saudi production increases, easing inflation concerns. Gold held a tight range around $4,000, with potential downside if oil and inflation pressures subside. Upcoming data includes manufacturing PMIs and earnings from Palantir, Snap, Berkshire Hathaway, Marriott, Tyson Foods, Williams, and a high‑profile SpaceX report, which he frames as an “Odyssey” with lock‑up expiration risk. European markets are modestly higher, US futures are up, and he ends with a prosciutto‑melone appetizer analogy to illustrate the market’s sweet‑salty split. He offers a contact number for personal portfolio discussions.
Chapters
Well, good morning. Yes, it's me, Kenny Polcari, your host of the party. And here I am back in my office in Florida. You see my big beautiful plant here? It got even bigger during the month I was away. And today is Monday, August 3rd, 2026. And here are the things that you need to know to get your day started. Well, and the saga continues, right? It was a split decision on Friday with Apple and Amazon. Oil closed higher on Friday,, but it is plunging this morning. Bonds, well, they're telling you the real story, so you need to pay attention. Gold is unchanged. And guess what? SpaceX reports tomorrow, and it's Homer's Odyssey in real life. And what do we have for dinner tonight? Well, it's an appetizer. We're going to prosciutto melone, and I'll explain that to you at the end. Well, good morning and welcome to the month of August. Here we are in the last month of summer. The market ended the last week of July looking mixed on the surface, But underneath, Friday was all about one thing: investors separating the AI winners from the AI promises. The Dow gained 277 points, the S&P up 52 points, the NASDAQ ahead by 250, the Russell lost 14 points, the transports lost 15 points, the Equal Weight S&P lost 17 points, while the Mag 7 added a whopping 1,060 points or 3.2%. Apple, the only loser in that group, reminding us once again that the AI story is alive and well. Investors are rewarding the companies that are proving that they can monetize AI versus those that are just asking you to trust in the process. Amazon, as we talked, as we discussed, was the undisputed star of the show. Investors, traders, and algos, along with some short covering, caused that stock to explode, gaining 15% to end the day at $271.58, creating a $30 gap on the chart. That's the market telling you that earnings weren't just good, they fundamentally changed the investor expectations. As we discussed on Friday, uh, Amazon Web Services accelerated again, margins improved, and management proved that the hundreds of billions of dollars being invested in AI infrastructure are finally generating real returns. On the other hand, we had Apple, they told you a little bit of a different story. Yes, they reported solid quarterly results, while at the same time though, Timmy Cook offered a softer outlook because of supply chain constraints and more moderate revenue expectations. The stock initially plunged, falling nearly 10%, only to have it recover as the day went on, ending the day down $24 or about 7% at 308.91. Interestingly enough, only 4 of the 11 S&P sectors ended the day higher. Now, consumer discretionary gained 3.3%, but before you go out and start celebrating the return of the consumer, the move was almost entirely a result of Amazon. Remember, because Amazon is the largest weighting in the sector, and after delivering another blowout, uh, quarter and surging by 15%, the result is a stronger sector performance. The reality is that investors weren't buying discretionary stocks because they were suddenly bullish on the consumer. Uh-uh. They were buying Amazon because it proved the thesis that AI spending is translating into real earnings growth. Now, we also saw strength in communications, energy, and industrials. Not much, but there was, there was strength. And basic materials led the way lower, falling 2.4%. And you can point to sector rotation and higher Treasury yields. Now the media is going to have you try to believe that, uh, that the weakness was in a report suggesting that the Chinese manufacturing sector is stalling. Okay, so here's how you connect those dots if you believe the data to begin with. China is the largest consumer of industrial commodities, so if the reports suggest a weaker China, then you can expect them to buy less copper, aluminum, steel, chemical, cement, lumber, iron ore, etc. Now I'm not sure about you, but that's a bit of a stretch for me because I don't really believe much that comes out of China in terms of they telling you the truth or they're not. So I'm more in the camp that it was sector rotation and higher yields rather than this sudden collapse in Chinese demand. But that's me, you do you. The other weak sectors included utilities, financials, consumer staples, healthcare, and real estate, which makes sense if you consider the rotation story out of those defensive dividend-paying sectors that we saw everyone run into and back into the mega-cap AI names, right, which we certainly saw. Semi surged 14.7% for the week after losing 28% since mid-June, right? That move is a reminder of some of the strongest rallies often begin after the most painful sell-offs. Now let's see if there's more follow-through this week because that'll be important. Okay, let's move on to the bond market because if Treasury prices fell again on Friday The TLT lost 7/10 while the TLH lost 6/10, and that sent yields higher, right? The 2-year ended the week yielding 4.28. It is up 4.8% over the past month. The 10-year at 4.73 is up 8.2% since July 1st, while the 30-year ended the week at 5.26%, up 10% since July 1st. And for me, that's the real reason that we've seen the market become much more volatile. Remember, it's the 10-year Treasury that It serves as the benchmark for what consumers and businesses pay to borrow money over the long term. Mortgage rates, auto loans, commercial and real estate financing, and corporate borrowing all tend to follow the 10-year much more closely than they follow the Fed funds rate. Why? Because the Fed only controls the overnight lending rate. It can cut short-term rates all it wants, but it cannot dictate what happens at the long end of the curve. That's determined by the bond market, right? By investors in the bond market. And that's what really matters to investors. So think about this for a minute. If the bond market is pushing yields higher, right, on the long end on its own, then money becomes more expensive across the economy. That's a tightening, right? So why would the Fed need to raise rates in the bond market at all if the market is already doing the heavy lifting? That's been Kevin Walsh's message all along, and it's exactly what we're seeing play out today. So maybe Neelie Kashkari and Lorie Logan and Beth Hammack, well, maybe they need to go back to school. And let's be clear, there isn't really any other reason to cut rates right now other than Trump stamping his feet, uh, because the economy is not in a recession. The eco data remains fairly strong, so a hold is actually appropriate. Now, oil wasn't helping the situation either. On Friday, WTI was trading in the mid-80s and Brent was trading in the upper 80s, keeping inflation concerns front and center, right? Adding to the pressure on the bond market. But once again, the story changed over the weekend because Trump called off what he described as the big military action after regional allies indicated that negotiations were making meaningful progress towards a deal. And I understand it was the Saudis that came to him and said, you know, hold off. At the same time, Saudi Arabia did confirm that they're gonna increase oil production, something that the market largely expected, But it is welcome news nonetheless. The combination this morning has sent crude sharply lower, right? WTI is down $5 to around $79.50 a barrel, while Brent has fallen about $4 to $83.50. Now, if these declines hold— and we've been here before— they'll help ease some of the inflation concerns that have been driving Treasury yields higher and could provide a welcome tailwind for both consumers and the broader market. But as I said before, and we've said before, ain't over until it's over. Now gold, that continues to trade in the very tight range that we discussed, $4,000, $4,200. This morning it's trading at $4,047. It's really been holding that $4,000 line all along. Now there's nothing really to say here, but if a deal is done and the temperature in the region subsides and oil declines, taking the pressure off of inflation, then the next move in gold should be lower. Now the chart suggests 3,450, 3,500-ish, so we'll see about that. Ego data today includes the SP Manufacturing PMI 53.8 and ISM Manufacturing PMI of 53.9, both in the expansion zone. We're also going to get ISM Prices Paid component, which is supposed to come in at 71, which is down from 73, and that suggests that input costs may be easing. That's all bullish. Earnings report includes Palantir, Snap, Berkshire Hathaway, Marriott, Tyson Foods, and Williams Brothers. And these names represent tech and software, communications, diversified industrials, hotels, consumer discretionary, consumer staples, and energy, natural gas, AI data center stuff, right? And then comes the odyssey, because why not? Tomorrow SpaceX reports, and so begins another chapter in the Musk saga. Think about it as Odysseus, like Musk, didn't set sail knowing exactly how the journey would end, right? There were storms, there were monsters and sirens tempting him off course in moments when success looked anything but certain. Yet every challenge revealed something about the strength of the ship, the resolve of the crew, and the leadership of its captain. And here we have Musk. Now, tomorrow's earnings aren't the destination. They're simply another stop along this voyage, and investors want proof. They want to know whether the company is navigating in the right direction, whether Starlink is generating the cash needed to fund the next leg of the journey, whether Starship remains on course, and whether Musk can keep steering through the inevitable storms that come with building the most ambitious company in history. And then comes Thursday, the first insider lockup expiration. 900 million more shares will become eligible to trade. Think of that as sailing between Celia and, uh, uh, Charybdis, right? Think like a rock and a hard place. On one side lies the risk of heavy insider selling flooding the market with new shares. On the other side lies the opportunity for investors to hold tight, signaling confidence that the greatest part of the journey still lies ahead. How the market and investors navigate this narrow passage may matter even more than the earnings themselves. Now, SpaceX closed at $108.37. It's down $42 from the opening trade. It's down $117 from the high set on June 16th. And with so much supply coming to the market, the next move is anybody's guess. Now, street analysts suggest that the stock, uh, could trade down to the mid-80s. Before finding its bottom. So sit tight because this is going to be very interesting to watch. Now, European markets are all higher. They're up about 0.8%. The United Kingdom is the only one not participating, right? It's essentially flat on the day. This morning, US futures are up big. Now, I wonder who knew on Friday that Trump was going to call off this attack. I mean, did I just say that? Anyway, the Dow's up 510 points, the S&P's up 45, the NASDAQ's up 100, and the Russell's up 25 The S&P closed at 7,489, up 52 points on Friday. We broke up and through the trendline resistance at 7,468, and we only came back to settle below, but it looks like we're going to pierce it again this morning. Now, while we did not hold it on Friday, my gut says that we're going to do that today. So keep your eyes on all the geopolitical headlines because that is front and center today. Tomorrow will be about SpaceX. But remember, All those headlines create short-term opportunity and chaos, but they don't price thoughts in the long term, which is why you need to stick to the plan. If you'd like to discuss your goals and evaluate the risk in your portfolio, or simply get a second opinion, give me a call at 561-931-0190 because I'm always happy to discuss your portfolio, give you a complimentary, uh, risk assessment. Okay, so now it was time to come up with dinner, and this isn't really dinner, it's an appetizer, and I think it works perfectly with where we are. It's prosciutto melone. Now you know this, right? But so here's the thing, uh, here's the thing about today's tape, right? It's got this split personality. You got Amazon and Microsoft surging while you got Apple and Meta sliding. You got semis getting crushed while defensives get rewarded. It's kind of this sweet and salty all at the same time, right? Get it? Now for this, you need the ripe cantaloupe that you're going to cut into wedges. You know how this goes. Then you need thin slices of the fresh-cut best prosciutto di Parma that you can get, and you need a good olive oil. You're gonna place the cut cantaloupe on the plate. You're gonna drape thin slices of prosciutto crudo right over the top or wrap it around it. That's it. No stove, no fuss. Maybe a drizzle of very good olive oil if you're feeling really fancy. That's it. It's sweet melon, it's salty ham, it's two completely different diverse flavors, yet somehow it all works. Just like today's market. Anyway, it is a glorious day here in South Florida right now, but it is supposed to rain, so let's see what that means for the market. Until tomorrow, take good care.
