Welcome back to the U.S. stock analysis channel. I’m Lorde.

Today we hold a cautious, wait-and-see stance on the overall market, are bearish on select consumer stocks, and have some tactical views on near-term moves in the bond market. The market rose on light volume, but the internal structure showed clear divergence. While the Philadelphia Semiconductor Index strengthened, the S&P 500 had only 207 advancing stocks against 294 decliners, and just six of the eleven sectors posted gains — breadth was unimpressive. The consumer discretionary sector, names like Nike NKE and Lululemon LULU, came under pressure from a weak retail outlook. Separately, the U.S. Treasury’s bond buyback program may have a hidden motive: triggering CTA short covering to temporarily push Treasury yields lower and create a favorable backdrop for the midterm elections. Historical data also shows that in September and October, especially during midterm election years, market volatility typically rises meaningfully. The boring August is nearly over; a more eventful market may be right around the corner.

Let’s start with two economic data points. The August consumer confidence index fell from 90.2 to 89.4, missing the 90.0 consensus. The expectations index dropped 5.8 points to 68.2. Consumers turned more pessimistic about the future business environment, labor market prospects, and income outlook. The other release was July new home sales, which plunged 10.5% to 607,000 units, below expectations. These numbers once again sound an alarm for the consumer discretionary sector. Dick’s Sporting Goods delivered a very weak forward outlook and tumbled 30% in a single day, dragging down Nike NKE and Lululemon LULU along with it.

Over in the bond market, Goldman Sachs floated a very interesting idea. They argue that Treasury Secretary Bessent’s bond buybacks may be more than just a surface-level operation; behind the scenes there could be an intent to trigger CTA short covering. If that strategy succeeds, it could push the 10-year Treasury yield toward a near-term potential target of 4.3%. In other words, short-term bearish on yields, which means bullish on bond prices. Of course, this kind of short-term tactic carries uncertainty, and over the longer run, such buyback programs could damage the Treasury’s credibility and the standing of the U.S. dollar.

Earnings season aftershocks are still playing out. Let’s focus on a few names.

First, INTU. The stock has fallen below $321, a level that has acted as consecutive strong support, and the price action looks very choppy. The company’s forward guidance missed expectations, revenue growth is slowing, and it plans to cut prices to defend market share, which could hurt margins. Technically there is overhead pressure, while downside room appears limited. The stock is likely to enter a prolonged consolidation phase and lacks the catalyst for a sustained breakout. I personally stopped out at $371 earlier and am currently bearish on it, staying on the sidelines.

Nike NKE, weighed down by retail weakness, is barely holding above $38.4. This level is the near-term battleground for bulls and bears. The company’s fundamental growth is anemic, and its forward P/E faces downward pressure. If it breaks below $38.4, the next support levels trace back to historical marks from 2014, whose validity is questionable and which sit far away. The subsequent path depends heavily on the macro environment and consumer spending conditions. I’m bearish on it for now.

Lululemon LULU looks even less encouraging. The performance was poor, and the company is in a recessionary outlook for the current fiscal year. The technical picture is very weak; the weekly chart shows a stair-step decline, with a massive overhang of trapped longs above $118 creating layer after layer of resistance. Recently it has formed a range between $109 and $125, but everything above is a resistance zone. For the trend to reverse, the business needs a material improvement in fundamentals, and the wait could stretch one to two years. I’m bearish on it as well.

Finally, a quick mention of NVIDIA NVDA. Ahead of earnings, the stock put in a textbook stabilization pattern, but honestly, in the face of the earnings event itself, that pattern doesn’t carry much weight. The direction will be entirely determined by the after-market earnings release. We just need to be patient and wait.

To wrap up, here are the risk factors to keep on your radar. On the macro front, declining consumer confidence and the plunge in new home sales suggest the economy may be weakening, while persistent high inflation continues to erode discretionary consumption. At the individual stock level, INTU, Nike NKE, and Lululemon LULU all face the risk of slowing growth or even recessionary performance, with soft forward guidance. On the policy side, the Treasury bond buyback program I mentioned carries uncertainty in its short-term tactics and could pose credibility risk over the long term. Most importantly, there is market volatility risk. Historical seasonal charts show that in midterm election years, S&P 500 volatility begins to rise in September and peaks for the full year in October, meaning the next two months could see violent two-way swings. Additionally, NVIDIA’s NVDA earnings result will directly impact the semiconductor sector and broader market sentiment, carrying the risk of a downside surprise that misses expectations.

Today’s market was quiet, but the undercurrents beneath the surface are worth noting. The alarm bells in consumer stocks, the maneuvering in the bond market, and the approaching seasonal volatility all remind us to buckle up. That’s all for today. We’ll see you next time.