We see cooler heads prevailing in market activity over the past couple sessions — for sure since the big run-up mid-yesterday afternoon, when indices hit 200-day moving averages and kept churning… until they put on the brakes, pretty hard. Overall, we’re not far off at the close of this Hump Day session than we were at the start of it: the Dow was -171 points, -0.50%, the Nasdaq -164 points, -1.25%, and the S&P 500 -0.72%. The Russell 2000 fell most precipitously today, -1.58%.

As San Francisco Fed President Mary Daly warned earlier, “Markets are getting ahead of themselves.” Should more cold water to the face be needed, the Fed minutes from the latest Fed monetary policy meeting showed a more hawkish overall tone than Jay Powell’s press conference might have betrayed. So far, the economy is pulling back on inflation without any meaningful erosion to employment or even, meaningfully, to overall demand. But that’s not a good enough reason to mount a bull run.

In fact, those who say this run-up over the past five weeks still rests in the “bear-market rally” category are technically correct: only the Dow is down single-digits year-to-date (the other major indices are down much farther), even after the strongest month of trading so far this year. Q2 earnings season was somewhat better than expected, but that’s looking backwards. To see where we’re headed, check things like Building Permits (future housing starts) and Weekly Jobless Claims (anticipating the monthly non-farm payroll report) — both those areas are already showing unmistakeable signs of weakness.

This is not “hair on fire” stuff, but that the market is showing some reservation at this juncture does demonstrate some maturity among the overall outlook. It’s also mid-August, when, historically, trading volumes are down. Thus, we’re not looking at much of a catalyst to push or pull the markets in either direction in the coming days, though tomorrow’s jobless claims, Philly Fed and Existing Home Sales may move the needle somewhat.

After today’s close, Cisco Systems (CSCO Quick QuoteCSCO - Free Report) once again beat expectations on its bottom line in fiscal Q4 — the company has not missed on earnings at least since Zacks recalibrated its methodology in 2014 — this time by a penny, to 83 cents per share. Revenues also surpassed estimates, to $13.10 billion from $12.75 billion expected. Full-year guidance has pulled tighter and gross margins came in light in the quarter, but shares are +2.8% in late trading. Many of Cisco’s issues stem from China supply chain — does the company see this improving? The conference call is getting underway shortly.

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