It was a wild day yesterday. The S&P and Nasdaq opened flattish, but then quickly sank with the S&P down as much as -0.70% and the Nasdaq down by -1.80%. But then, just as quickly, the markets turned higher with the S&P and Nasdaq up as much as 1.16% and 1.15% respectively. But that didn't last long either as they both headed back down before the S&P closed lower by -0.51%, and the Nasdaq by -0.93%.

All the while, the Dow, small-cap Russell 2000, and mid-cap S&P 400 were in the green. At their best, the Dow was up 1.47%, the Russell was up 2.75%, and the S&P 400 was up 2.33%, before settling with gains of 0.20%, 1.26%, and 0.90% by day's end.

The market rotation trade continues with the tech-heavy Nasdaq bearing the brunt of the rotation 'out,' while the small-cap Russell is the biggest beneficiary of the rotation 'in.'

Since the market rotation began just a couple of weeks ago on 7/11, the Nasdaq has shed -7.87%, while the Russell has gained 8.35%. Wow!

Yesterday's first estimate for Q2 GDP came in well above expectations at 2.8% vs. views for 2.0%. It was also a marked improvement over Q1's 1.4%. As impressive as it was, some worry that the pickup in the economy could further delay a rate cut.

Weekly Jobless Claims fell by -10,000 to 235K vs. the consensus for 238K.

Durable Goods Orders showed New Orders off -6.6% m/m vs. last month's 0.1% and the consensus for 0.3%. Ex-Transportation it was up 0.5% vs. last month's -0.1% and views for 0.2%. Core Capital Goods were up 1.0% vs. last month's -0.9% and estimates for 0.2%.

And the Kansas City Fed Manufacturing Index slid to -13 vs. last month's -8 and estimates for -5.

Today we'll get Consumer Sentiment, and the report everyone's been waiting for ? the Personal Consumption Expenditures (PCE) index. That's the Fed's preferred inflation gauge. And it'll be the last inflation report we get before the Fed meets on July 30-31. The headline rate is expected to be up 0.1% m/m vs. last month's 0.0%, while the y/y rate is expected to come in at 2.5%, which is under last month's 2.6%. The core rate (ex-food & energy) is expected to be up 0.1% m/m, in line with last month's pace. The y/y rate, like the headline number, is expected to come in at 2.5% vs. last month's 2.6% as well.

That comes out at 8:30 AM ET.

We'll also get another 97 companies on deck to report earnings with names like Bristol Myers, Colgate-Palmolive and 3M to name a few.

With one more day to go, the big three indexes are currently down for the week, while the small-cap Russell 2000 and mid-cap S&P 400 are up.

As for the S&P 500 and Nasdaq, they are currently off -4.73% and -7.87% from their recent high close. That puts both of them in or around pullback territory.

But I'd like to remind that pullbacks (defined as a decline of -5% to -9.99%) are common. Every bull market has them. In fact, stocks usually pull back roughly 3-4 times per year. Pauses like these help refresh and strengthen the market before their next leg up.

So keep that in mind if the pullback deepens, as it could offer a tremendous buying opportunity.

Best,