Stocks Finish Modestly Lower on Earnings Outlook Jitters, US Election Credibility Concerns, Technical Selling, Transport/Energy Sector Weakness

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.2 -.04%
• 3-Month T-Bill Yield 5.31% -2.0 basis points
  

• China Iron Ore Spot 101.3 USD/Metric Tonne +.71%
• Dutch TTF Nat Gas(European benchmark) 31.6 euros/megawatt-hour -.68%

• Citi US Economic Surprise Index -31.1 -1.0 point

• Citi Eurozone Economic Surprise Index -26.7 +.6 point

• Citi Emerging Markets Economic Surprise Index -.8 -2.5 points
• S&P 500 Current Quarter EPS Growth Rate YoY(102 of 500 reporting) +7.0% -1.1 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 262.27 +.14:  Growth Rate +14.9% +.1, P/E 21.3 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.79% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +43.8%
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 335.31 +.36: Growth Rate +25.0% +.1 percentage point, P/E 34.6 +.5
  
• Bloomberg US Financial Conditions Index .83 -3.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .72 +2.0 basis points
  
• US Yield Curve -24.5 basis points (2s/10s) +2.25 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +2.73% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 58.0% +.4 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.39% unch.: CPI YoY +3.01% unch.
  
• 10-Year TIPS Spread 2.28 -1.0 basis point
  
• Highest target rate probability for Sept. 18th FOMC meeting: 93.6%(+5.1 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 53.4%(+2.5 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -19 open in Japan 
• China A50 Futures: Indicating -31 open in China

• DAX Futures: Indicating +113 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech/financial sector longs
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 50% Net Long
  

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (T)/.57
• (BSX)/.58
• (CME)/2.54
• (FI)/2.10
• (GEV)/.73
• (GD)/3.28
• (IP)/.41
• (NEE)/.94
• (ODFL)/1.45 
• (THC)/1.90
• (WFRD)/1.74
  

After the Close: 

• (CP)/1.01
• (CLS)/.81
• (CMG)/.32
• (F)/.68
• (IBM)/2.18
• (KLAC)/6.15
• (LVS)/.58
• (MOH)/5.55
• (NEM)/.62
• (ORLY)/10.98
• (RJF)/2.31
• (RHI)/.71
• (NOW)/2.83
• (TER)/.77
• (URI)/10.55
• (VMI)/4.05
• (WHR)/2.37
• (WH)/1.03
• (OTIS)/1.02
• (PTEN)/.08
• (ROK)/2.08
• (SAVE)/-1.34
  

Economic Releases

8:30 am EST

• Advance Goods Trade Balance for June is estimated to shrink to -$98.7B versus -$99.4B in May.
• Wholesale Inventories MoM for June is estimated to rise +.5% versus a +.6% gain in May.
• Retail Inventories MoM for June is estimated to rise +.5% versus a +.7% gain in May. 
  

9:45 am EST

• S&P Global US Manufacturing PMI for July is estimated to rise to 51.7 versus 51.6 in June.
• S&P Global US Services PMI for July is estimated to fall to 54.8 versus 55.3 in June.
• S&P Global US Composite PMI for July is estimated to fall to 53.9 versus 54.8 in June.
  

10:00 am EST

• New Home Sales for June is estimated to rise to 640K versus 619K in May.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Logan speaking, Fed's Bowman speaking, Atlanta Fed GDPNow Q2 update, 5Y note auction, weekly MBA Mortgage Applications report and the (RIOT) bitcoin conference could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Tuesday Watch

Evening Headlines

Bloomberg:

• The Hong Kong Tower That Symbolizes China’s Credit Bubble Bust.
• Citi Warns of Euro-Yen Intervention Risk If Pair ‘Threatens’ 180.
• Asian Stocks Track US Rebound Ahead of Earnings.
• American Farmers’ Next Hot Commodity Is Canola for Biofuels. 
• Harris Has Enough Delegates to Clinch Nomination for President.
• Roblox Is Fighting to Keep Pedophiles Away, and Not Always Winning.
• Five Things You Need to Know to Start Your Day: Asia.

Zerohedge:  

• "You're Full Of Sh*t": Secret Service Director Grilled, Says Agency Has 'No Radio Communications' From Assassination Attempt.
• "Joe Biden's F**k You": Biden Megadonor Refuses To Fundraise For Kamala Harris.
• Mr. Beast's Co-Host Deletes X Posts After Reports Swirl Of Inappropriate Conversations With Minor .
• 'Pure Blood': Dating Divide Over Vaccination Status Splits Those Looking For A Partner.
• Mainstream Media Already Turning On Biden's "Dark Legacy" In Ukraine.
• Proof Of Life? Biden 'Phones In' During Harris Campaign Event.
• A Decade Of Conspiracists?
• Chaos Ensued The Last Time A US President Bowed Out Only Months Before An Election.
• Police Departments Advertise Six Figure Salaries , Better Quality Of Life, To Lure New Recruits.
• Kamala Harris: The Next Worst Thing.
• Dearborn, Michigan Is "America's Jihad Capital" And Has Descended Into "Civil War".
• US stocks gained in a tech-led rebound ahead of earnings and data, while politics took the limelight - Newsquawk Asia-Pac Market Open.
• Sen. Ron Johnson Reveals Preliminary Findings From Attempted Assassination Of President Trump.
• Liberal College Professors Get On The Kamala Bandwagon: She Is "Engaging And Energetic", "Has A Good Record".
• Stocks rally ahead of key earnings and data - Newsquawk US Market Wrap.
• "Only Half Gone!"
• Biden Ouster Sparks Some 'Trump Trade' Unwind, Big-Tech & Bond-Yields Bounce.

Wall Street Journal:

• Higher Prices on Tampons, Pads Prompt Hard Choices for Americans.
• America’s 60-Year-Olds Are Staring at Financial Peril.
• How the Bet on Joe Biden Turned Into an Epic Miscalculation.
• What Kamala Harris Believes. The Vice President’s political record reveals the views of a California progressive.
• Democrats Will Pay for the Biden Big Lie. By dropping out, he removes all doubt that Americans were played for suckers.
• Another Coronation for Kamala. She floated to the top in a one-party state. Who thinks she has the skills to serve as president?
• Alexa Is in Millions of Households—and Amazon Is Losing Billions.
• Warner’s TNT Makes Matching Offer for Amazon’s NBA Package.
• Elon Musk Says Tesla to Use Humanoid Robots Next Year.
• China’s Long Blueprint for Economy Falls Short on Details, Raising Concerns.

CNBC.com:

• How Biden’s unpopular economic record could be a challenge for Kamala Harris.
• Domino’s Pizza CEO talks weakness in its international business.
• CrowdStrike shares tumble as fallout from global tech outage continues.
• Google cancels plans to kill off cookies for advertisers.
• Tesla reports second-quarter earnings on Tuesday and investors want a robotaxi update.
• Republican representatives call on CrowdStrike CEO George Kurtz to testify. 
• Delta cancels hundreds more flights in struggle to recover from Microsoft outage.

MarketWatch.com: 

• These ‘cheap’ stocks could get a tailwind no matter who wins the White House.
• CrowdStrike’s stock extends declines as it draws a downgrade in wake of incident.
• Nvidia’s stock gains as analyst says a $2 billion beat could happen this quarter.
• Is Google’s biggest competition itself? Watch Alphabet’s earnings for signs. 

Fox News:

• Elon Musk says his child was figuratively 'killed by the woke mind virus,' vows to destroy it.
• FEC commissioner says Harris campaign going to take millions in Biden donations.
• Russell Brand calls Biden’s exit from presidential race an ‘extraordinary masquerade’.

TheGatewayPundit.com:

• Democrats Want Kamala Gone… They Will Let Her Make a Mockery of Herself (VIDEO).
• Explosive Move: Nancy Mace Forces Impeachment Vote on Secret Service DEI Director Kim Cheatle Within 48 Hours!
• Dissident Dem Senator Might Challenge Kamala Coronation, Fight Her for Nomination.
• DEVELOPING: Joe Biden Abruptly Cancels NINE TRIPS, Extends ‘Covid Isolation’ at Delaware Beach House After Dropping Out of 2024 Race.
• Kamala Harris Talks to Biden as if He’s a Toddler in Campaign Headquarters Call: “Joe, Are You Watching? Do You Hear This Clapping?” (VIDEO).
• Jaw-Dropper! Trump Leads Kamala 64% to 29% in Latest Poll – Up 10 Pts. in PA… Up 30 Pts in AZ… Up 40 Pts in GA!
• REPORT: Top Democrats Threatened to Invoke the 25th Amendment to Forcibly Remove Biden from Office Unless He Quit Race – Have Alternative Candidate to Kamala Harris.
• Is This a Recording? Joe Biden *Allegedly* Calls in to His Former Campaign HQ Before Kamala Speaks – Sounds Like Hell, Slurs… Did He Have a Stroke? (AUDIO).
• Questions Congress Side-Stepped About Trump Assassination Attempt at Hearing Today.
• INGRASSIA: Kamala Harris Helped Defraud The Republican Party And America By Covering Up Joe Biden’s Senility And Health Woes.
• Nancy Pelosi Endorses Kamala Harris After She Threatened Biden and Forced Him Out of Race, “We Can Do This the Easy Way or the Hard Way”.
• WHOA! Secret Service Director Cheatle STONEWALLS During Testimony Following Trump Attempted Assassination – REFUSES TO ANSWER QUESTIONS! (VIDEO).

Around X:

• @HawleyMO

• NEW - Whistleblowers tell me law enforcement personnel were in fact STATIONED to the roof the day of the Trump rally, but abandoned it, citing the heat. They also say law enforcement were supposed to be patrolling the building, but opted to stay inside instead. (pic)
  

• @bennyjohnson

• Jim Jordan ENDS Disgraced Secret Service Director Kim Cheatle's CAREER in Scorched EARTH Public humiliation. Secret Service Director admits UNDER OATH to purposely weakening Trump's security detail amid massive threats to Trump's Life. Cheatle must be charged and arrested: (video)

• @kylenabecker
  

• WOW: Director Kim Cheatle confirms that fierce Trump critic Sheila Jackson Lee was heavily involved in the oversight of the Secret Service. Sheila Jackson Lee died on Friday. (video)

• @GenFlynn
  

• All kidding aside, this is a very serious time for America. Unprecedented type actions in the past 24 hrs alone. That said, some stray electrons on a Monday morning: First, Biden inner circle began yesterday on T.V. saying , “Biden not withdrawing”. 90 mins later, a letter is released he obviously didn't write withdrawing from the race in an incredibly humiliating manner. Some takeaways:

• @VigilantNews

• AOC Unexpectedly Asks Secret Service Director a GOOD Question. This is a Matrix-like moment. “The individual used an AR-15 in order to act out his assassination attempt. An AR-15 has a range of about 400 to 600 yards. My question is, why is the Secret Service protective perimeter shorter than one of the most popular semi-automatic weapons in the United States?”
• WHAT?! Trump Shooter Used 3 Encrypted Accounts OVERSEAS to Communicate. Who was Crooks communicating with?
  

• @OversightPR
  

• ASSASSINATION INFO DROP. We found the assassin’s connections through our in-depth analysis of mobile ad data to track movements of Crooks and his associates. To do this, we tracked devices that regularly visited both Crooks’s home and place of work and followed them.

• @WallStreetSilv
  

• Did Joe Biden even sign the letter? The B looks totally different from how he signs everything else. He doesn't have a history of underlining his signatures. (pic)

• @stoolpresidente  

• I feel like I'm taking crazy pills when the left keep calling Trump a threat to Democracy when the Dems didn't let their own party vote for their candidate. It's insane!!!! (video)

• @simonateba

• BREAKING - EXPLOSIVE - BRUTAL: Republican Congresswoman Nancy Mace (
  @NancyMace) demolishes Secret Service Director Kimberly Cheatle, tells her she's 'full of shit' and is saying 'bullshit,' won't answer any helpful question during brutal 'Yes or No' questioning. WATCH. (video)

• @greg_price11

• Kimberly Cheatle is shown footage of Trump rally goers pointing to the shooter on the roof. She then attempts to explain how the Secret Service were not aware that there was a threat to President Trump and why the rally was never paused. This is a crazy clip. (video)
  

• @The_Real_Fly
  

• SECRET SERVICE DIRECTOR SAYS THEY DO NOT HAVE RECORDED RADIO COMMUNICATIONS FROM DAY OF TRUMP SHOOTING. (video)

• @gatewaypundit
  

• Holy Crap! Secret Service Director Admits that Crooks Had a Range Finder - And that Was Completely Acceptable! (VIDEO)

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 1,012,894 Reports(+1,222 from prior report) Through June 28th, 2024.

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

Night Trading 

• Asian equity indices are unch. to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 95.25 -2.25 basis points.

• China Sovereign CDS 63.0 -3.25 basis points.
  
• China Iron Ore Spot 102.8 USD/Metric Tonne -.7%

• Bloomberg Emerging Markets Currency Index 39.2 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 58.6 +2.7%.
• Volatility Index(VIX) futures 15.2 +1.0%.
• Euro Stoxx 50 futures +.14%.

• S&P 500 futures -.15%.

• NASDAQ 100 futures -.28%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.

Stocks Finish Higher on China Rate-Cut, Less Democrat Presidential Candidate Chaos, Technical Buying, Tech/Construction Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.8 -10.2%
• DJIA Intraday % Swing .62 -38.5%
  
• Bloomberg Global Risk On/Risk Off Index 57.6 +4.7%

• Euro/Yen Carry Return Index 187.9 -.29%

• Emerging Markets Currency Volatility(VXY) 7.4 -.3%

• CBOE S&P 500 Implied Correlation Index 11.2 -14.7% 

• ISE Sentiment Index 121.0 -21.0
  

• Total Put/Call .88 +8.6%

• NYSE Arms 1.35 +117.7%
  
• NYSE Non-Block Money Flow +$237.9M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 49.4 -2.7%
  

• US Energy High-Yield OAS 261.4 -1.6%
• Bloomberg TRACE # Distressed Bonds Traded 243 -17
  

• European Financial Sector CDS Index 60.4 -2.1%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 154.4 -1.0%
  

• Italian/German 10Y Yld Spread 128.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 96.70 -1.3%
  

• Emerging Market CDS Index 163.26 -2.5%
  
• Israel Sovereign CDS 127.8 +.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.0 +.29%

• 2-Year SOFR Swap Spread -18.75 basis points -1.0 basis point
  

• Treasury Repo 3M T-Bill Spread .5 basis points +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -.75 +.75 basis point
  
• MBS  5/10 Treasury Spread 144.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 689.0 -3.0 basis points
  
• Avg. Auto ABS OAS 60.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.2 +.24%
• 3-Month T-Bill Yield 5.33% unch.
  

• China Iron Ore Spot 102.8 USD/Metric Tonne -.71%
• Dutch TTF Nat Gas(European benchmark) 31.8 euros/megawatt-hour -1.0%

• Citi US Economic Surprise Index -30.1 +4.9 points

• Citi Eurozone Economic Surprise Index -27.3 -1.3 points

• Citi Emerging Markets Economic Surprise Index 1.7 -3.0 points
• S&P 500 Current Quarter EPS Growth Rate YoY(73 of 500 reporting) +8.1% -.8 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 262.13 +.53:  Growth Rate +14.8% +.2, P/E 21.1 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.80% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +43.8%
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 334.95 +2.77: Growth Rate +24.9% +1.1 percentage point, P/E 34.1 -.1
  
• Bloomberg US Financial Conditions Index .86 -5.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .70 -9.0 basis points
  
• US Yield Curve -26.75 basis points (2s/10s) +.75 basis point
  
• US Atlanta Fed 2Q GDPNow Forecast +2.73% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 57.6% -2.0 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.39% unch.: CPI YoY +3.01% unch.
  
• 10-Year TIPS Spread 2.29 -1.0 basis point
  
• Highest target rate probability for Sept. 18th FOMC meeting: 91.7%(-2.3 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 52.0%(-5.5 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -19 open in Japan 
• China A50 Futures: Indicating -32 open in China

• DAX Futures: Indicating +145 open in Germany

Portfolio:

• Higher:  On gains in my biotech/tech/industrial/consumer discretionary/financial sector longs
  

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure: Moved to 75% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Value +.3%
  

Sector Underperformers:

• 1) Telecom -.7% 2) Energy -.5% 3) Oil Service -.2%

Stocks Falling on Unusual Volume: 

• CELH, AEHR, VZ, CRWD and HE
  

Stocks With Unusual Put Option Activity:

• 1) ZI 2) CSTM 3) CRWD 4) BK 5) COPX
  

Stocks With Most Negative News Mentions:

• 1) CRWD 2) DAL 3) CVS 4) ODD 5) DRCT
  

Sector ETFs With Most Negative Money Flow:

• 1) AIRR 2) XLI 3) SMH 4) XLP 5) VGT

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.7%
  

Sector Outperformers:

• 1) Semis +3.7% 2) Construction +2.0% 3) Construction +1.9%

Stocks Rising on Unusual Volume:

• SAVA, MAT, EMBC, FDMT, WBTN, TEX, AMSC, IQV, DNLI, S, CELC, ACMR, TSLA, NYT, AWI, IMMR, SLAB, AIR, ML, TALO, AGYS, ADMA, LXEO, NFLX, SCHW, NKE and LXEO
  

Stocks With Unusual Call Option Activity:

• 1) TELL 2) ALIT 3) ACB 4) S 5) CRWD

Stocks With Most Positive News Mentions:

• 1) TELL 2) MAT 3) SERV 4) RDDT 5) DQ
  

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) XLC 3) XBI 4) SOXX 5) XLY
  

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume