Don’t fight it. The stock melt-up, I mean. It’s a losing battle. At least until September, when the seasonal turns in bears’ favor.

As noted in “August Bulls,” stocks tend to grind higher through summer’s dog days, and between retail appetite, the resumption of buybacks as corporates exit earnings blackouts and likely ongoing support from systematic flows, the demand backdrop’s supportive.

Although trailing realized vol inflected higher on short-term lookbacks (e.g., 10-day) courtesy of the mild selloff around the July jobs report and the next session’s sharp rebound, three-month rVol sports a 12-handle and one-month’s still single-digits. As the updated figure below reminds you, spot remains very well-behaved notwithstanding the August 1-August 4 see-saw.

Since mid-May, we’ve had just seven sessions during which the S&P moved 1% or more in either direction. That sort of compressed daily return distribution’s highly conducive to vol-selling, and vol-selling can be self-fulfilling on a number of fronts.

Say what you will about “fake beats,” lowered bars and so on, but reporting season in the US went well. “We continue to see very strong beats across the board [with] 82% of S&P 500 companies beating on earnings, well above the historical average of 74%,” Deutsche Bank’s Binky Chadha remarked, adding that beat rates like the one we just witnessed are “usually only seen coming out of big downturns.” (That’s the “Liberation Day” effect.)

The figure below, from Goldman’s David Kostin, gives you some context for how far out ahead of expectations aggregate index EPS growth is running with most constituent companies on the books, but it’s also a helpful reminder that this is always a charade — actual earnings growth has exceeded pre-reporting season expectations every quarter but one going back to Q1 of 2022.

I should note: That 9% figure (in green) is probably a bit higher now, which is to say closer to 10% after this week.

All the usual caveats still apply. Market concentration’s as extreme as it’s ever been on a variety of metrics. Relatedly, Mag7 market cap domination is pushing up towards levels observed around historical bubbles. And then there’s anything and everything to do with Donald Trump, who’s volatility personified.

But fading a melt-up in the middle of the summer can be injurious to your financial well-being, something I tried, with varying degrees of success, to communicate since mid-June.

Markets are desensitized to tariff news by now, and while it seems pretty clear the US labor market’s faltering, and that domestic demand is too, the world’s largest economy probably isn’t headed for any sort of hard stop.

As BofA’s Michael Hartnett noted in his latest, the pros are by and large convinced that “Goldilocks” is the most likely outcome. Maybe that’s a contrarian indicator, but… well, suffice to say if you started holding your breath waiting on a so-called “Wile E. Coyote” moment for the US economy every time someone suggested a gravity event was imminent over the last few years, you’d be dead by now, and several dozen times over.

Big US tech hit fresh records Friday, helped along by Apple, which scored its best one-week gain in half a decade.

As the simple figure shows, the shares rose 13% over five sessions, with sentiment bolstered by the prior week’s solid quarterly report and Tim Cook’s apparently successful effort to shield the company from Trump’s forthcoming semiconductor levies.

If you’re keeping track at home, the market-cap gain for Apple this week was $840 billion. Not too bad.

Finally, it doesn’t hurt the bull case that Fed cuts are coming. With Stephen Miran set to occupy a governor’s seat starting with the September FOMC, it’s entirely possible the Fed will cut at all three remaining meetings in 2025, particularly if the jobs data doesn’t improve.

Oh, and The Wall Street Journal said late Friday that Jim Bullard’s now in the running to replace Jerome Powell as Chair.