This is the daily notebook of Mike Santoli, CNBC’s senior markets commentator, with ideas about trends, stocks and market statistics. It’s another turn around the track, with investors presuming the Federal Reserve will be resolute for longer than the economy and companies can muster any growth. Tightening financial conditions and searing volatility in bonds and currencies are depleting risk appetites. So far, this means the S & P 500 is just testing the low end of its June-July range. The bounce off the mid-June low was fairly rote and didn’t come close to turning the broader trend, but for now it seems a sloppy, twitchy tape is the rule. Could this ultimately prove a basing phase, maybe with deeper retests of the month-old lows just above 3,600? Sure, but needs to prove it. The big growth index heavies are showing some traction, notably AAPL – often the life raft with the most people hanging off it in a storm. Nothing to get too excited about yet, but Nasdaq 100 has been improving a bot relative to the broader S & P 500, likely a matter of Big Growth’s defensive/quality properties asserting themselves as cyclical sectors’ struggle and longer-term yields stay beneath their recent highs. Many strategists/analysts running some bleaker scenarios through their targets and ratings this week, marketing their models to mood. Bank of America dropping S & P 500 year-end view to 3,600 , Goldman airing the recession case taking it to the low 3,000s. The 3,500 area has long been a focal point for those looking for plausible downside destination tethered to some satisfying story line. It’s exactly halfway between the March 2020 low and January 2022 peak. It’s also about where the index’s 1,000-day (200-week) moving average sits, often support in bad corrections/cyclical bear markets. The fact the market firmed up a bit on Fed Governor Christopher Waller downplaying the chance for a 100 basis point rate hike in two weeks shows the kind of game this has become. The market wants to look through and beyond this sprint toward “neutral” on rates. The Fed says it needs to see the data cooperate over several months. Meantime the dollar screams higher, commodities crack and market-based inflation measures are down a lot, raising the chance for a financial mishap while making the Fed appear to be chasing lagging indicators. The bull case for risk assets is now 75bp in July and then a nearly two-month “wait and see” period until the next meeting. JPM and MS earnings not received well, getting dinged on M & A-related loans and need to build capital for rainier days. The banks reflect well the tension between a “pretty good” level of current economic activity and consumer financial cushion against rapidly slowing forward indicators and pinched outlook. JPM valuation down to 1.25x book value. It bottomed just under here in early 2020, but more like 1x book in 2016 around the vaunted “Dimon bottom” in stocks. Bank earnings season is often a seesaw, in terms of reactions to the numbers, so watch for bounces as other biggies report. Sentiment and positioning are still quite cautious/fearful. Justifiably so, one might say, given the strength of the downtrend and macro stresses. But better than everyone being happy and embracing max risk when things are dicey. National Association of Active Investment Managers’ equity exposure bumping along near record-lean levels. Market breadth is quite weak, nearly a 90% downside volume day on NYSE, a bit better on Nasdaq. Credit markets are weaker with dollar ripping/recession talk flying/JPM bridge-loan write-downs weighing on the market. Again, not at desperate/crisis conditions and a bit less stressed than junk debt was recently, but a pressure point. VIX up a small amount. Pretty unimpressible so long as S & P is above the lows and the megacaps have a bid.