Wednesday Watch

Around X:

• @Business

• President Donald Trump said Israel has agreed to the conditions needed for a 60-day ceasefire in Gaza, adding that the plan would now be presented to Hamas.
• President Donald Trump said he is not considering delaying his July 9 deadline for higher tariffs to resume, and renewed his threat to cut off talks and impose duty rates on several nations, including Japan. 
• Here’s the latest news and analysis on the oil market.
• Google ends tests of a feature that would have let users open a snapshot of cooking-recipe content directly in web search results — a welcome development for creators who were concerned about eroding traffic to their sites. 
• Toyota is slowing plans to build EVs in the US to free up manufacturing capacity for a popular gas-powered SUV. 
• Some of Wall Street’s largest lenders boosted their dividends after passing this year’s Federal Reserve stress tests, a hurdle that regulators made easier to clear by softening some of the requirements laid out in previous years.
  Jurors in the Sean “Diddy” Combs case told the judge they reached a verdict on sex trafficking and prostitution charges but were divided on a lone racketeering charge.
• Centene shares plunged after the health insurer pulled its 2025 guidance following an early analysis of data from the Affordable Care Act marketplace that showed a significant revenue hit from a risk-sharing mechanism.
• Leveraging home sensors and AI, Whisker Labs has developed new ways to rapidly track electricity flows to detect grid faults — leaving some power providers trailing. 
• Bond traders who rapidly built up long Treasuries positions in recent weeks are counting on Thursday’s jobs report to give the market rally more room to run. 
• Jeff Bezos sold 3.3 million Amazon shares in recent days, netting $736.7 million.
• Here's what you need to know to start your day
  .
• Get up to speed on what's moving global markets.  

• @ZeroHedge 

• UPenn, Trump Admin Reach Deal To Strip Trans Swimmer Of Past Titles & Awards.
• The face you make when you’ve convinced NPR that socialism is just vibes.
• Rubio Announces USAID Has 'Officially' Ceased Operations. 
• "This Is The Next Level": AI-Powered "Digital Workers" Deployed At Major Bank To Work Alongside Humans
  .
• The Curbing Of The Administrative State
  .
• Bridgewater’s Flagship Pure Alpha Fund Gains 17% in 1H: Reuters
  .
• Productivity Gains From Using AI
  . 
• Judge Orders Halt To Mass Layoffs At Dept. Of Health And Human Services.
   
• "Violent Moves": Stocks Start H2 With Momo Massacre & Massive Short-Squeeze; Bullion Bid & Bonds Battered
  . 

• @CNBC 

• Wednesday’s big stock stories: What’s likely to move the market in the next trading session.
• Google promotes ‘AI Mode’ on home page 'Doodle'.

• @TheTranscript 

• $AMZN CEO: One of the why questions we’re always asking is how can we help operations employees access inventory more efficiently? We’re taking a big leap forward by introducing DeepFleet, an exciting new AI model that makes our one million+ robot fleet work smarter. Think of DeepFleet as an intelligent traffic management system for our fulfillment centers. Just like smart traffic systems reduce congestion in cities, DeepFleet coordinates our robots’ movements to find optimal paths and reduce bottlenecks.

Night Trading 

• Asian equity indices are -.75% to +.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 73.5 -1.25 basis points. 
• China Sovereign CDS 50.25 +.25 basis point.
• China Iron Ore Spot 93.3 USD/Metric Tonne +.05%.
• Polymarket: US-EU Trade Agreement by July 9th 37.0% -15.0 percentage points. 
• Polymarket:  Reconciliation Bill Passed by July 4th 60.0% -7.0 percentage points

• Swiss Franc/Offshore Chinese Renminbi Cross 9.05 +.03%.
• Bloomberg Emerging Markets Currency Index 37.16 -.07%.
• Bloomberg Global Risk-On/Risk Off Index 72.6 +.9%.
• US 10-Year Yield 4.25% +1.0 basis point.
• Volatility Index(VIX) futures 20.2 -.1%.
• Euro Stoxx 50 futures +.21%. 
• S&P 500 futures +.04%. 
• NASDAQ 100 futures +.08%.

Morning Preview Links

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

Stocks Slightly Higher into Final Hour on BBB Passage Hopes, US Economic Data, Sector Rotation, Consumer Discretionary/Energy Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.2 +.07%
• US 10-Year T-Note Yield 4.25% +2.0 basis points
• 3-Month T-Bill Yield 4.32% +5.0 basis points

• China Iron Ore Spot 93.6 USD/Metric Tonne +.43%
• Dutch TTF Nat Gas(European benchmark) 33.7 euros/megawatt-hour +2.4%

• Citi US Economic Surprise Index -1.4 +10.0 points

• Citi Eurozone Economic Surprise Index 28.3 +1.0 point

• Citi Emerging Markets Economic Surprise Index 27.2 +.6 point
• S&P 500 Current Quarter EPS Growth Rate YoY(17 of 500 reporting) +2.2% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 280.57 +.13:  Growth Rate +10.3% unch., P/E 22.1 unch.
• S&P 500 Current Year Estimated Profit Margin 13.42% +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 446.03 +.18: Growth Rate +19.4% unch., P/E 32.8 -.8
• Bloomberg US Financial Conditions Index .47 -2.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.53 +57.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 4.4 +.1
• US Yield Curve 47.0 basis points (2s/10s) -3.75 basis points
• US Atlanta Fed GDPNow Q2 Forecast +2.5% -.4 percentage point
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 48.1% +1.4 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.68% unch.: CPI YoY +2.64% unch.
• 1-Year TIPS Spread 2.56 +1.0 basis point
• 10-Year TIPS Spread 2.30 unch.
• Highest target rate probability for Sept. 17th FOMC meeting: 72.8% (-2.0 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Oct. 29th meeting: 55.8%(-1.9 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
  

Polymarket:

• US-EU Trade Agreement by July 9th 40.0% -12.0 percentage points
• Reconciliation Bill Passed by July 4th 60.0% -7.0 percentage points

Overseas Futures:

• Nikkei 225 Futures: Indicating -97 open in Japan 
• China A50 Futures: Indicating -137 open in China

• DAX Futures: Indicating +163 open in Germany

Portfolio:

• Slightly Lower: On losses in my utility/industrial/tech sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some
• Market Exposure: Moved to 75% Net Long

Bull Radar

Style Outperformer:

• Small-Cap Value +2.5%

Sector Outperformers:

• 1) Homebuilding +5.1% 2) Regional Banks +3.3% 3) Oil Service +3.2%

Stocks Rising on Unusual Volume:

• BMNR, MUX, MESO, LE, KLG, AEHR, BLDR, LVS, ICHR, WYNN, LGIH, OPRA, IBP, CLDX, THS, PKG, CC, DFH, PKX, MGM, SEDG, KTB, ARCB, ALGT, PRCH, HAS, FND, BBWI, OLN, LIND, RXO, LPX, VC, CCS, ZD, IREN, HUN, EYE, M, HSY, HUBG, RUSHA, WLK, PSFE, TMHC, HRI, CMPR, SEI, AGCO, BULL, HP, CUBI, CRUS, SXT, PHM, DOW, CMP, LEN, SDM, FUN, DOW, FUN, DOOO, NXT, EGBN, DIOD, XYF, EMN, SON, PATK, RHI, GFS, DHI, CADE, SJM, CNC, H, FBIN, F, XYF, COLB, BUSE, MRNA, KNX, WAL, PHH, YELP, NCLH, BJRI and UHS

Stocks With Unusual Call Option Activity:

• 1) ATAI 2) ILMN 3) VRNT 4) JMIA 5) KBE

Stocks With Most Positive News Mentions:

• 1) WOLF 2) ATAI 3) MLCO 4) JMIA 5) MUX

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) IYW 3) SHLD 4) XLC 5) XLK

Charts:

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

Afternoon Market Internals

NYSE Composite Index:

• Volume Running +43.2% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.3 -.9
• 3 Sectors Declining, 8 Sectors Rising
• 73.0% of Issues Advancing, 25.6% Declining 
• TRIN/Arms 1.05 -7.1%
  
• Non-Block Money Flow -$4.2M
  
• 103 New 52-Week Highs, 12 New Lows
• 52.6% (+11.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 67.7 +2.7

Other:

• Bloomberg Global Risk-On/Risk-Off Index 71.4% -3.8%
• Bloomberg Cyclicals/Defensives Index 247.5 +.2%
  
• Morgan Stanley Growth vs Value Index 165.5 -3.7%
• CNN Fear & Greed Index 66.0 (GREED) unch.
• Polymarket: US-EU Trade Agreement by July 9th 35.0% -17.0 percentage points 
• Polymarket:  Reconciliation Bill Passed by July 4th 62.0% -5.0 percentage points
• 1-Day Vix 9.1 -10.4%
  
• Vix 16.9 +.7%
  
• Total Put/Call .89 +12.7%

Tuesday Watch

Around X:

• @Business

• South Korea’s $206.5 billion sovereign wealth fund is standing by US Treasuries as a core holding, undeterred by recent market volatility.
• Italy will increase its imports of US soybeans as part of a new effort to rebalance trade between the two countries, US Agriculture Secretary Brooke Rollins told reporters after meeting with her Italian counterpart.
• The US will start reopening ports to Mexican livestock in phases, after trade along the southern border had been halted in May by the spread of a parasitic fly. 
• Here’s the latest news and analysis on the oil market.
• A Paris-based ESG data firm specialized in real estate is planning to dramatically increase its presence in the US, based on an assessment that Americans will soon need to pay more attention to how energy efficient their homes and offices are.
• A group of Senate Republicans is pushing a plan to soften an aggressive planned phase out of subsidies for wind and solar projects under President Donald Trump’s tax-and-spending package.
• The US Treasury didn't take measures that could have prevented or mitigated major cyberattacks, a Bloomberg News investigation found. 
• Accelerant Holdings filed for an IPO, joining a rush of insurance-related listings in the US.
• BlackRock’s Rick Rieder sees more opportunity in the stock market at the moment than at the long-end of the Treasury curve. 
• On the heels of its blockbuster IPO, stablecoin issuer Circle said it is seeking to create a national trust bank in the US. 
• Here's your Evening Briefing. 
• Get up to speed on what's moving global markets. 
• Here's what you need to know to start your day. 

• @ZeroHedge 

• Quantum Meets AI: Morgan Stanley Maps Out Next Tech Frontier.
• A Translation Guide To Progressive Slavespeak.
• New California Laws Effective July 1 Could Impact Students, Paychecks, Airbnb-Stays.
• Disney Hit With More Layoffs As Latest Woke Projects Bomb Hard.
• Ultra-Processed Foods Linked To Brain Changes That Drive Overeating. 
• The Complete Flows, Technicals & Positioning Market Summary As We Enter The Second Half.  
• Social Media: The Biggest Threat To Teens' Mental Health? 
• Dollar Crashes To Worst H1 In 52 Years As Stocks Soar To Best Quarter Since Q1 2023 Despite Tariff Tantrum. 

• @CNBC 

• Meta shares hit all-time high as Mark Zuckerberg goes on AI hiring blitz.
• Despite tariffs, Andy Jassy says Amazon hasn't 'seen prices appreciably go up,' so far. 
• Tuesday’s big stock stories: What’s likely to move the market in the next trading session. 

• @FoxNews

• Survivor of Mao's Cultural Revolution warns New Yorkers to "wake up" about @ZohranKMamdani: "He is a full-fledged Communist". (video)
• Fox News Poll: 6 in 10 are proud of US today – the most in more than a decade.

• @GatewayPundit

• Chinese Drug Gangs Buying up Rural US Land, says new Tucker Carlson Documentary.
• JUST IN: Senate Rejects Measure to Kick Illegals Off Medicaid 56-44.
• Democrat Infighting: Hakeem Jeffries Demands Socialist NYC Mayoral Candidate Mamdani ‘Clarify’ Defense of Genocidal ‘Intifada’ Chant.
• DOJ Charges 324 in Largest Healthcare Fraud Takedown in U.S. History — $14.6 BILLION Scheme Involved 96 Doctors, Nurses, and Pharmacists Targeting Medicare and Medicaid.

• @WallStreetApes 

• Finally MTG says it out loud. America funded the Ukraine War, “How come we couldn’t watch that war on television”. ‌ There was no war footage. ‌ American taxpayers ARE STILL paying to: ‌ - Fund the Ukraine Government - Paying for Ukraine public sector retirements, salaries and pensions - Our tax dollars are still being used to boost Ukraine’s economy and military Total U.S. Aid: As of March 2025, the U.S. has allocated approximately $182.8 billion in emergency funding for Ukraine and the region, with $83.4 billion disbursed and $140.5 billion committed. This includes military, economic, and humanitarian aid. (video)

• @bennyjohnson

• AOC built her entire political brand on being a “Girl from the Bronx.” But is that true? No. It’s a lie. I travelled to AOC’s actual hometown to investigate. It’s safe, clean, patriotic and wealthy. It’s a slice of small town American heaven. Here’s where AOC is really from… (video)

• @LawrenceSellin

• Chinese Fifth Column. In addition to her alleged criminal activities, Linda Sun (Sun Wen 孙雯), former Deputy Chief of Staff to NY Democrat Governor Kathy Hochul, has been deeply involved with Pro-CCP Chinese-American groups and the Chinese Consulate. There are many like her.

Night Trading 

• Asian equity indices are -.25% to +.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 74.75 +.25 basis point. 
• China Sovereign CDS 50.0 -.5 basis point.
• China Iron Ore Spot 94.1 USD/Metric Tonne -.21%.
• Polymarket: US-EU Trade Agreement by July 9th 54.0% unch. 
• Polymarket:  Reconciliation Bill Passed by July 4th 44.0% -16.0 percentage points

• Swiss Franc/Offshore Chinese Renminbi Cross 9.03 +.03%.
• Bloomberg Emerging Markets Currency Index 37.17 +.04%.
• Bloomberg Global Risk-On/Risk Off Index 73.4 -1.1%.
• US 10-Year Yield 4.21% -1.0 basis point.
• Volatility Index(VIX) futures 18.8 +.5%.
• Euro Stoxx 50 futures +.15%. 
• S&P 500 futures +.03%. 
• NASDAQ 100 futures +.05%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and financial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.

Stocks Rising into Final Hour on US-Global Trade Deal Optimism, Lower Long-Term Rates, Short-Covering, Tech/Financial Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.2 +.3%
• US 10-Year T-Note Yield 4.23% -5.0 basis points
• 3-Month T-Bill Yield 4.27% -3.0 basis points

• China Iron Ore Spot 94.2 USD/Metric Tonne -.11%
• Dutch TTF Nat Gas(European benchmark) 32.9 euros/megawatt-hour -2.3%

• Citi US Economic Surprise Index -11.4 -1.1 points

• Citi Eurozone Economic Surprise Index 27.3 +.6 point

• Citi Emerging Markets Economic Surprise Index 26.6 -4.5 points
• S&P 500 Current Quarter EPS Growth Rate YoY(17 of 500 reporting) +2.2% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 280.44 +.27:  Growth Rate +10.3% +.1 percentage point, P/E 22.1 unch.
• S&P 500 Current Year Estimated Profit Margin 13.41% +14.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 445.85 +.77: Growth Rate +19.4% +.2 percentage point, P/E 33.6 +.2
• Bloomberg US Financial Conditions Index .49 +4.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index .96 -41.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 4.3 unch.
• US Yield Curve 50.75 basis points (2s/10s) -3.5 basis points
• US Atlanta Fed GDPNow Q2 Forecast +2.9% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 46.7% +2.4 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.68% unch.: CPI YoY +2.64% unch.
• 1-Year TIPS Spread 2.55 unch.
• 10-Year TIPS Spread 2.30 -1.0 basis point
• Highest target rate probability for Sept. 17th FOMC meeting: 75.0% (+.2 percentage point) chance of 4.0%-4.25%. Highest target rate probability for Oct. 29th meeting: 59.9%(+2.2 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
  

Polymarket:

• US-EU Trade Agreement by July 9th 54.0% unch. 
• Reconciliation Bill Passed by July 4th 60.0% -15.0 percentage points

Overseas Futures:

• Nikkei 225 Futures: Indicating -97 open in Japan 
• China A50 Futures: Indicating -137 open in China

• DAX Futures: Indicating +163 open in Germany

Portfolio:

• Higher: On gains in my industrial/financial/tech sector longs
• Disclosed Trades: None
• Market Exposure: 100% Net Long