This is the daily notebook of Mike Santoli, CNBC’s senior markets commentator, with ideas about trends, stocks and market statistics. Global growth gloom with a hint of Covid caution settled upon U.S. morning trading, costing the S & P 500 about 1% of its 7% three-week rally but otherwise not offering much concrete evidence about the fate of the latest rebound attempt. China’s latest Macau lockdown and stiffer restrictions go along with a subplot of a stealth wave around the world to pinch risk appetites at least for now. Bond yields slipping, U.S. dollar ripping, the question of whether the Federal Reserve can and will ease back before the recession threat grows larger are the overlays. Yawn if you’ve heard this before, but the S & P 500 has not done anything yet to reverse the six-month downtrend. However, it is holding above both the early-month lows and the May intraday low as well, so inconclusive is the main conclusion for now. We’ve seen a pattern of early weakness and afternoon firmness in equities the past week or so. Today might be a small test of whether this is a trend with anything behind it aside from new-quarter money topping up depleted equity allocations. Market already pretty far along in pricing in serious risk to the expansion as Goldman Sachs’s “Cyclicals vs. Defensives” stock basket performance shows. Note the defensive group has hefty tech exposure, the profitable flavor of tech also described as “quality.” Though today the Big Tech slug is hurting not helping with AAPL and others giving back some recent gains. As noted, the dollar’s surge against every other currency has become pretty extreme in degree and speed. It’s a pressure point on corporate earnings and U.S. growth, but it also provides some help by contributing to the Fed’s desired objectives of restraining price inflation and snugging up financial conditions. U.S. Dollar Index here over the past decade. Sure, it’s getting overbought, but that also is a sign of a powerful underlying trend. There is sometimes a simplistic notion that dollar headwinds make smaller stocks a better bet, given there are fewer trade-dependent multinationals to be found in small-cap indexes. This, though, tends not to overcome concerns over a slowing economy and waning liquidity. Still, the discount of small versus large stocks has grown quite extreme, for those willing to bet that the laws of mean-reversion remain in force. Market breadth today is quite weak on NYSE, a bit better on Nasdaq. VIX up a small amount and still in the 26-27 range. It’s on alert but showing no real rush for downside protection, given the grinding nature of the decline in recent months.