Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +8.1% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.5 -1.2
• 2 Sectors Declining, 9 Sectors Rising
• 72.9% of Issues Advancing, 25.1% Declining 
• TRIN/Arms 1.48 +5.7%
  
• Non-Block Money Flow +$260.1M
  
• 67 New 52-Week Highs, 7 New Lows
• 45.8% (+5.9%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 61.9 +11.7

Other:

• Bloomberg Global Risk-On/Risk-Off Index 72.2 +3.9%
• Bloomberg Cyclicals/Defensives Index 242.3 +.5%
  
• Morgan Stanley Growth vs Value Index 167.9 +1.0%
• CNN Fear & Greed Index 56.0 (moved from NEUTRAL to GREED) +3.0
• Polymarket: Another US military action against Iran by 6/30 6.0% -58.0 percentage points 
• Polymarket: Will Iran Close the Straight of Hormuz in 2025? 17.0% -25.0 percentage points
• 1-Day Vix 10.2 -24.2%
  
• Vix 17.6 -11.1%
  
• Total Put/Call .88 -10.2%

Tuesday Watch

Around X:

• @Business

• NEW: Donald Trump says Israel and Iran have agreed to a ceasefire beginning in about six hours.
• Several Persian Gulf states, including Qatar and the UAE, have reopened their airspace and resumed operations at some of the world’s busiest airports after halting flights as Iran launched air strikes at a US base in Qatar.
• UK Prime Minister Keir Starmer will vow to spend 5% of British economic output on security by 2035, embracing an ambitious NATO target sought by President Donald Trump without providing a path on how to get there. 
• Senate Republicans are coming around to the $40,000 cap on state and local tax deduction demanded by key House lawmakers, but they want to lower the income threshold.
• Gold retreated as haven demand ebbed after Trump announced that Israel and Iran had agreed to a ceasefire. 
• Here’s the latest news and analysis on the oil market
  .
• Starbucks shares rose in late trading on Monday after Caixin Global reported the company is considering a full sale of its China business
  . 
• Federal Reserve Chair Jerome Powell will have two chances this week to explain to lawmakers why he and most of his fellow policymakers seem resolved to continue holding interest rates steady at least until September.
• Meta Chief Executive Officer Mark Zuckerberg discussed a possible acquisition with video startup Runway AI Inc., as part of his deal-making drive in artificial intelligence.
• Iran’s missile attack on a US air base in Qatar was telegraphed well in advance, suggesting Tehran intended a symbolic show of force while offering a way to de-escalate after US airstrikes over the weekend: Here’s your Evening Briefing. 
• Here's what you need to know to start your day. 

• @ZeroHedge 

• This leftwing radical Biden judge got jammed through the Senate in December, in the lame-duck session after Democrats lost the White House and Senate. Six months into the job, Massachusetts U.S. District Judge Brian Murphy is now openly defying a Supreme Court order. Impeach.
• As Iran has repeatedly made clear: Israel launched war on Iran, not the other way around. As of now, there is NO "agreement" on any ceasefire or cessation of military operations. However, provided that the Israeli regime stops its illegal aggression against the Iranian people no later than 4 am Tehran time, we have no intention to continue our response afterwards. The final decision on the cessation of our military operations will be made later. 
• Automotive Industry Imbalance Delays Trade Negotiations With Japan.
• Iran Reportedly Agrees To Trump-Backed, Qatari-Mediated Ceasefire With Israel.
• Schlichter: Trump's Attack On Iran Will Not Destroy The America First Movement. 
• Vindication For The Unvaccinated?
• Supreme Court Hands Trump Huge Win On Deporting 'Worst Of The Worst' Illegals. 
• WATCH: MOMENT US Army launches MASSIVE wave of interceptors to destroy incoming Iranian missiles over Qatar.
• NYC Mayor's Race Upended As Business-Unfriendly Former Rapper Socialist Tops Cuomo.
• "Congrats World, It's Time For Peace" - Trump "Thanks" Iran After "Very Weak Response".
• Oil Crashes, Stocks Soar On 'Scripted' Iranian Retaliation; Gold & Crypto Jump As Dollar Dumps. 

• @CNBC

• How a war-torn Myanmar plays a critical role in China's rare earth dominance.
• Tuesday’s big stock stories: What’s likely to move the market in the next trading session. 

• @WSJ

• Commandos, secret operations and drones now offer action video that is effective as countries flaunt their tactical triumphs.
• NATO’s annual summit opens on Tuesday, with defense funding for readiness and resilience high on the agenda.
• Exclusive: New York intends to build a large nuclear-power facility, the first new U.S. plant undertaken in more than 15 years. 

• @FoxNews

• China needs to take two lessons from Trump's announced ceasefire between Israel and Iran, Mark Montgomery tells @IngrahamAngle.
• @DNIGabbard praises President @realdonaldtrump's "herculean effort" after he announces a ceasefire between Iran and Israel. 
• Vance touts destruction of Iranian nuclear program as Trump announces Israel-Iran ceasefire.
• @VP JD Vance: "We know that they cannot build a nuclear weapon." (video) 

• @GatewayPundit

• RFK Jr. Announces “Health Insurance Breakthrough” That Affects Nearly 260 Million Americans.

Night Trading 

• Asian equity indices are +.75% to +1.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 77.5 -4.0 basis points. 
• China Sovereign CDS 51.5 -3.5 basis points.
• China Iron Ore Spot 93.5 USD/Metric Tonne -.5%.
• Polymarket: Another US military action against Iran by 6/30 10.0% -53.0 percentage points
• Polymarket: Will Iran Close the Straight of Hormuz in 2025? 18.0% -42.0 percentage points
• Swiss Franc/Offshore Chinese Renminbi Cross 8.83 +.02%.
• Bloomberg Emerging Markets Currency Index 37.0 +.07%.
• Bloomberg Global Risk-On/Risk Off Index 69.65 +.23%.
• US 10-Year Yield 4.35% unch.
• Volatility Index(VIX) futures 20.0 -3.5%.
• Euro Stoxx 50 futures +1.37%. 
• S&P 500 futures +.58%. 
• NASDAQ 100 futures +.83%.

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 higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the day.

Stocks Reversing Higher into Final Hour on De-escalating Mid-East Tensions, Lower Long-Term Rates, Plunging Oil, Homebuilding/Transport Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.95 +.21%
• US 10-Year T-Note Yield 4.32% -5.0 basis points
• 3-Month T-Bill Yield 4.26% -4.0 basis points

• China Iron Ore Spot 94.2 USD/Metric Tonne +.3%
• Dutch TTF Nat Gas(European benchmark) 40.52 euros/megawatt-hour -.99%

• Citi US Economic Surprise Index -20.8 +3.1 points

• Citi Eurozone Economic Surprise Index 24.4 -5.1 points

• Citi Emerging Markets Economic Surprise Index 28.4 -1.6 points
• S&P 500 Current Quarter EPS Growth Rate YoY(9 of 500 reporting) +1.3% -.1 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 278.87 +.36:  Growth Rate +9.6% unch., P/E 21.5 +.1
• S&P 500 Current Year Estimated Profit Margin 13.25% +1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 433.96 +.62: Growth Rate +16.2% +.2 percentage point, P/E 32.5 unch.
• Bloomberg US Financial Conditions Index .29 +25.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index .91 -27.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 4.8 +.5
• US Yield Curve 49.0 basis points (2s/10s) +2.5 basis points
• US Atlanta Fed GDPNow Q2 Forecast +3.4% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 40.3% +.6 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.58% unch.: CPI YoY +2.62% unch.
• 1-Year TIPS Spread 2.65 -6.0 basis points
• 10-Year TIPS Spread 2.31 -3.0 basis points
• Highest target rate probability for Sept. 17th FOMC meeting: 65.3% (+5.0 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Oct. 29th meeting: 46.2%(+9.6 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
  

Polymarket:

• Iran Military Response to US forces by 6/30 27.0% -47.0 percentage points
• Another US military action against Iran by 6/30 25.0% -39.0 percentage points
• Will Iran Close the Straight of Hormuz in 2025? 26.0% -8.0 percentage points
• US-EU Trade Agreement by July 9th 51.0% +4.0 percentage points 
• Reconciliation Bill Passed by July 31st 73.0% +4.0 percentage points 

Overseas Futures:

• Nikkei 225 Futures: Indicating +302 open in Japan 
• China A50 Futures: Indicating -35 open in China

• DAX Futures: Indicating +228 open in Germany

Portfolio:

• Higher: On gains in my utility/financial/tech/consumer discretionary/industrial sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and emerging market shorts
• Market Exposure: 75% Net Long

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

Earnings of Note 
Company/Estimate 

Before the Open:

• (CCL)/.25
• (SNX)/2.71 

After the Close: 

• (AVAV)/1.40
• (BB)/.00
• (FDX)/5.88
• (WOR)/.83 

Economic Releases

8:30 am EST

• The Philly Fed Non-Manufacturing Activity for June. 
• The 1Q Current Account Balance is estimated to widen to -$445.5B versus -$303.9B in 4Q. 

9:00 am EST

• The FHFA House Price Index MoM for April is estimated unch. versus a -.1% decline in March.
• The S&P CoreLogic CS 20-City MoM SA for April is estimated unch. versus a -.12% decline in March.

10:00 am EST

• The Richmond Fed Manufacturing Index for June is estimated to fall to -10.0 versus -9.0 in May.
• The Conference Board Consumer Confidence Index for June is estimated to rise to 99.8 versus 98.0 in May.  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell testifying to House, Fed's Hammack speaking, Fed's Barr speaking, 2Y T-Note auction, weekly US retail sales reports, (MA) annual meeting, (DASH) annual meeting, (OKTA) annual meeting, (CF) investor day, JPMorgan Energy/Power/Renewables/Mining Conference and the Northland Growth Conference could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +6.5% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 14.7 -.3
• 7 Sectors Declining, 4 Sectors Rising
• 42.1% of Issues Advancing, 55.4% Declining 
• TRIN/Arms 1.61 +78.9%
  
• Non-Block Money Flow -$147.9M
  
• 45 New 52-Week Highs, 38 New Lows
• 41.6% (-.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.2 -3.2

Other:

• Bloomberg Global Risk-On/Risk-Off Index 68.5 -.8%
• Bloomberg Cyclicals/Defensives Index 241.1 -.2%
  
• Morgan Stanley Growth vs Value Index 165.4 -.56%
• CNN Fear & Greed Index 53.0 (NEUTRAL) -2.0
• Polymarket: Iran Military Response to US forces by 6/30 75.0% +19.0 percentage points
• Polymarket: Another US military action against Iran by 6/30 64.0% +10.0 percentage points 
• Polymarket: Will Iran Close the Straight of Hormuz in 2025? 49.0% unch.
• 1-Day Vix 14.8 -19.7%
  
• Vix 21.5 +4.1%
  
• Total Put/Call .94 +5.6%

Monday Watch

Around X:

• @Business 

• Iran’s leaders are discovering they’re on their own against the US and Israel, without the network of proxies and allies that allowed them to project power in the Middle East and beyond. 
• Defense Secretary Pete Hegseth says Iran's nuclear ambitions have been obliterated during last night's air strikes. He praised President Donald Trump's military strike as "bold and brilliant." (video) 
• US strikes on Iranian nuclear facilities are sharpening the focus on one option Iran has yet to really deploy: disrupting regional oil trade, especially through the critical Strait of Hormuz. 
• Major US cities are tightening security after President Donald Trump unleashed airstrikes on Iran, a direct military intervention that’s deepened Washington’s role in Israel’s war with Tehran and raised concerns about potential retaliation.
• What follows US airstrikes is hard to predict, but it will be decided by clerics in Tehran, writes @MarcChampion1.  
• China criticized the US strike on Iranian nuclear facilities and again said it’s willing to join international efforts to restore peace in the Middle East.
• NATO has offered to tweak key language on ambitious defense spending targets to help win support from holdout Spain. 
• US strikes on Iran over the weekend have added to risks for global oil supply.
• Bank of New York Mellon Corp. approached Northern Trust Corp. last week to express interest in a possible merger in what would be a megadeal for the US financial services industry, the Wall Street Journal reported. 
• A group of the nation’s largest health insurers agreed to streamline preapprovals for medical care, addressing a controversial process that can result in delays or outright denials of patient treatment.'
• Federal Reserve Bank of San Francisco President Mary Daly said central bankers need to communicate with flexibility at times of uncertainty, given that using strong forward guidance sometimes “comes with a price”.
• PJM Interconnection, which serves about 20% of Americans in the mid-Atlantic to the Midwest, declared an energy emergency alert with power demand expected to climb to a 14—year high amid.
• A Republican effort to block US states from enforcing new artificial intelligence regulations will remain in President Trump’s massive tax and spending package for now, marking a win for tech companies.
• The US is adding a slew of big batteries that may keep your lights on this summer.
• Markets are bracing for a flight to safety as investors await Iran's response to US strikes.  
• Here's what you need to know to start your day. 

• @Zerohedge 

• Futures Slide, Oil, Gold And Dollar Spike But No Panic Moves.
• Report Warns "Woke Army" & Dark-Money Funded NGOs Could Take Iran's War "To America's Streets".
• Hedge Fund CIO: "A Tsunami Of Global Liquidity Is Seeking A Safe Haven".
• Well would you look at that: guess who is eating all those tariff costs (hint, it's not US consumers). (graph)
• NYT: "Intelligence officials have detected signs that Iran-backed militias are preparing to attack U.S. bases in Iraq, and possibly Syria." 
• *GROSSI SAYS IAEA INSPECTORS MUST BE ALLOWED BACK TO IRAN SITES. *GROSSI SAYS HOSTILITIES MUST END FOR IAEA INSPECTORS TO RETURN. *GROSSI: NO ONE IN POSITION TO ASSESS FORDOW UNDERGROUND DAMAGE.
• Here's How US Strikes On Iran Unfolded. 
• First Robotaxi Rides. (video)
• Trump Slams Massie As 'Not MAGA' Amid Iran Policy Infighting Among President's Base. 
• Fordow Before and after. (pic) 
• Natural Gas Projects Reboot After Officials Wake Up To Stark Realities.
• IRAN'S ATOMIC ENERGY AGENCY SAYS NUCLEAR SITES QUICKLY BEING REBUILT, ACTIVITY TO CONTINUE WITH GREATER POWER – IRANIAN MEDIA.
• $150 Oil? Goldman Lays Out How Markets Will React To US Escalation In Iran.
• Here's What Goldman's Hedge Fund Honcho is 'Seeing, Hearing, Thinking, & Doing In The Markets'.
• US Military Scrambles For Ways To Protect Bases From Drone Warfare.
• Iranian Parliament Backs Strait Of Hormuz Closure, Oil Market Braces For Turmoil. 
• From hedge funds to quants, longs are light which should leave less room for an unwind panic. 
• Satellite Imagery Flags "Unusual Activity" At Iran's Fordow Nuclear Site Days Before U.S. Strike.
• Global Fertilizer Market Thrown In Chaos After Mideast War Shutters Iran Urea Production.  

• @WSJ

• President Trump’s “big beautiful bill” is getting smaller after the Senate’s rules arbiter decided several provisions don’t qualify for the procedure the GOP is using to bypass Democratic opposition.
• From @WSJopinion: Trump is again offering Iran’s leaders a choice of negotiating peace or retaliating and inviting more harm to their country. They learned the hard way on Saturday that doubting Trump’s red lines is a mistake. 
• Vice President JD Vance signals that Iran’s enriched-uranium stockpile is intact, a hurdle to closing a path to a bomb. Tehran says it has minimized damage as it tries to buy time to weigh a response.
• Fred Smith, who founded FedEx and turned it into a global transportation giant, died Saturday at age 80. 

• @GatewayPundit

• NEW: Los Angeles Riots Cost Taxpayers Over $30 MILLION, Including $1.4 Million in Clean-Up/Public Property Damage – Leftist LA City Controller Blames ICE: “Raids Have Now Cost LA Taxpayers $32 Million”.
• “Make Iran Great Again” – President Trump Suggests Regime Change in Iran After US Drops Bombs on Nuclear Sites.
• US Officials Issue Terror Threat Alert for Potential Cyber Attacks and Violent Extremists Following Iran Strikes.
• Border Czar Tom Homan on Potential Sleeper Cells from Iran in the US (VIDEO).
• WHAT? Out-Of-Touch Zelensky Asks ALL Allies To Devote 0.25% of Their GDP to Finance Ukrainian War Effort.
• BREAKING: Congregants Flee as Active Shooter Rams Truck Into Christian Church in Michigan, Opens Fire – Suspect Killed by Armed Security Guard (VIDEO)
  .
• The Dragon’s Hidden Hand: How Chinese Organized Crime Could Serve as a Fifth Column in America.
   

• @FoxNews  

• State Department issues worldwide caution for US travelers following Trump's Iran strikes.
• Nearly half of Iranian nationals caught by Border Patrol during the Biden administration were released into the US, CBP source tell FOX News. (video)

• @C_3C_3

• Reminder… Barack Hussein Obama secretly delivered $400 million in cash on pallets to Iran in the dark of night then released over a billion more to fund the nuclear program POTUS Trump obliterated.

• @WallStreetApes

• 1) Barack Obama made 3 CASH PAYMENTS to Iran. - January 17, 2016: $400 million. - January 22, 2016: $1.3 billion. - February 5, 2016: $10 million. Obama was paying his organization. 2) Donald Trump “Barack Obama is the founder of ISIS. He’s the founder”. Make sense yet? (video)

• @nicksortor

• ALERT: There is a MASSIVE deep state effort to force Tulsi Gabbard out of her DNI position due to her restrained approach to war. DO NOT FALL FOR IT. They want to ELIMINATE Tulsi’s powerful office completely, and fold it into the CIA. That would be an ABSOLUTELY DEVASTATING outcome. If want to give the deep state exponentially more power, eliminate @TulsiGabbard and her office. And we’ll feel the devastating impacts for decades.

• @VigilantFox

• Rep. @WesleyHuntTX just delivered the most powerful rebuttal to Whoopi Goldberg’s crazy race claim—and Bill Maher’s liberal audience erupted in applause. “I don’t even ever want to hear Whoopi Goldberg’s conversation about how it’s worse to be black in America [than to live in Iran].” “My district in the great state of Texas is actually a white-majority district that President Trump would have won by 25 points… I am literally being judged not by the color of my skin, but by the content of my character. That’s the progress, because a lot of white people had to vote for me—a lot.” (video)

Night Trading

• Asian indices are -1.25% to -.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 81.5 +1.75 basis points.
  
• China Sovereign CDS 55.0 +2.75 basis points.
• China Iron Ore Spot 93.7 USD/Metric Tonne +.2%.
• Polymarket: Iran Military Response to US forces by 6/30 56.0% +4.0 percentage points
• Polymarket: Another US military action against Iran by 6/30 54.0% -9.0 percentage points 
• Polymarket: Will Iran Close the Straight of Hormuz in 2025? 49.0% +19.0 percentage points
• Swiss Franc/Offshore Chinese Renminbi Cross 8.77 -.02% 
  
• Bloomberg Emerging Markets Currency Index 36.86 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 69.3 +.4%.
• US 10-Year Yield 4.40% +2.0 basis points.
  
• Volatility Index(VIX) futures 21.6 +2.3%. 
• Euro Stoxx 50 futures -.53%.
• S&P 500 futures -.41%.
• NASDAQ 100 futures -.53%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and consumer discretionary shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the week.