This is feeling very much like the "rallies" in April and May

I am noticing a trend, aren’t you? Once a month for each of the last three, we are getting these feel-good, moderately small, stock market rallies.

In April it was based on the idea that inflation was peaked.

In May, it was based on the Fed stating it was committed to fighting inflation

This week, it is based on more Fed testimony, this time affirming they will do whatever it takes.

Now, this is all kind of funny. A “whatever it takes” commitment to harnessing price inflation would crash the stock market. Investors trade stocks higher because they don’t understand the relationship between the supply of credit and the boom/bust cycle of stock markets.

So these are feel good market rallies based on optimism, not data.

In fact, the data is terrible.

U.S. businesses suffered a sharp slowdown in June, a pair of surveys showed, as high inflation forced customers to cut back on orders and rising interest rates induced growing worries about a recession.

The S&P U.S. services index fell to a five-month low of 51.6 in June from 53.4 in May, based on “flash” survey. Readings above 50 signifies expansion; below that, contraction.

The U.S. manufacturing index, meanwhile, slid to a nearly two-year low of 52.4 from 57. Similar surveys in Europe also pointed to a manufacturing slowdown.

The one upside of the report: Weaker demand triggered declines this month in the cost of business supplies and what companies charge.

This is a big week for Fed data releases. The M2 money supply gets updated on the 28th and the personal savings rate on the 30th.

The Yield Curve sits at 10 basis points.

So again, I am not buying this rally.