Stocks Reversing Higher into Final Hour on Stable Long-Term Rates, AI Infrastructure Build-Out Optimism, Technical Buying, Tech/Alt Energy Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.5 -.5%
• BofA Private Credit Proxy Index 73.3 +.2% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .24 -1.0 basis point
• BofA Global Financial Stress Indicator -.35 +1.0 basis point
• European Financial Sector CDS Index 55.5 -1.5%
• Emerging Market CDS Index 148.7 -.7%
• Israel Sovereign CDS 53.8 -5.9% 
• Bloomberg Global Trade Policy Uncertainty Index .6 unch.
• US Morning Consult Daily Consume Sentiment Index 86.6 -1.2

• Citi US Economic Surprise Index 57.0 +10.6

• Citi Eurozone Economic Surprise Index -59.50 +5.3

• Citi Emerging Markets Economic Surprise Index 35.5 unch.
• S&P 500 Current Quarter EPS Growth Rate YoY(485 of 500 reporting) +27.7% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 361.35 +.39:  Growth Rate +23.1% +.1 percentage point, P/E 21.1 +.1
• S&P 500 Current Year Estimated Profit Margin 15.48% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +67.2% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 889.95 +.83: Growth Rate +124.8% +.2 percentage point, P/E 20.9 -.1 
• Bloomberg US Financial Conditions Index 1.17 +3.0 basis points
• US Yield Curve 40.5 basis points (2s/10s) -2.0 basis points
• Bloomberg Industrial Metal Index 191.36 +1.4%
• Dutch TTF Nat Gas(European benchmark) 48.0 euros/megawatt-hour -2.2%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 15.5% +1.4 percentage points
• US Atlanta Fed GDPNow Q2 Forecast +3.0% unch.
• US 10-Year T-Note Yield 4.45% unch.
• 1-Year TIPS Spread 2.72 +4.0 basis points

• Highest target rate probability for July 29th FOMC meeting: 92.4% (-.8 percentage point) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 75.3%(-.8 percentage point) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +710 open in Japan 
• China A50 Futures: Indicating -112 open in China

• DAX Futures: Indicating +5 open in Germany

Portfolio:

• Higher: On gains in my industrial/tech/energy sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -.4%

Sector Underperformers:

• 1) Software -3.3% 2) Biotech -2.9% 3) Gambling -2.2%

Stocks Falling on Unusual Volume: 

• LPTH, CXDO, AI, APPN, CHA, CMCL, HURN, COGT, MIAX, SMMT, GMAB, CLYM, SNOW, DELL, EWTX, ASST, GRAL, NOW, IMNM, ZS, GENB, CBOE, NKTR, PATH, INTU, MSTR, SHAK, BRUN, NU, OLMA, OCS, PRAX, CELC and ABVX

Stocks With Unusual Put Option Activity:

• 1) BITO 2) HPE 3) CBOE 4) SOLS 5) BNY

Stocks With Most Negative News Mentions:

• 1) ODD 2) FULC 3) OCS 4) NU 5) CBOE

Sector ETFs With Most Negative Money Flow:

• 1) VGT 2) XLF 3) XLK 4) XLP 5) XLY

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.0%

Sector Outperformers:

• 1) Lithography/Photonics +6.7% 2) Semis +4.6% 3) Alt Energy +3.1%

Stocks Rising on Unusual Volume:

• VSXY, LEGN, MRVL, OPTX, PENG, LWLG, FCEL, COHR, OCTV, UMAC, HPE, ELMT, FTK, CAMT, TE, WOLF, STM, LITE, SVCO, VSH, GLW, RLAY, ASTS, ELVA, FN, UEC, SIMO, ELVA, TOYO, HSAI, BE, ACMR, CLS, UUUU, AMPX, CIFR, INFQ, OKLO, SMR, CEVA, HIMX, AAOI, BDC, AVT, CENX, ST, APTV, AA, METC, ASYS, CCJ, CSIQ, OUST, MTSI, VPG, GNRC, SMCI, IPGP, LI, ONTO, LEU, DE, FLNC, AMKR, VOYG, PDFS, GFS, ROG, MP, BABA, LII, MWH, USAR, EH, COHU, SKM, XPEV, CSTM, GRRR, NVTS, TX, XIFR, JD, RCAT, MRAM, DOO, BZ, AVGO, BLBD, OSK, TTMI, GDS, NNE, NOK, OSK, NOVT, ADEA, ALOY, THRM, PLAB, SNX, RIVN, JBL, TECK, CORZ, DCI, AIP, CEG and KC

Stocks With Unusual Call Option Activity:

• 1) SW 2) XP 3) HPE 4) SHOO 5) LFVN 

Stocks With Most Positive News Mentions:

• 1) MRVL 2) PENG 3) UMAC 4) RLAY 5) COHR 

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) IGV 3) DRAM 4) AGIX 5) XLB

Charts: 

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

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

Earnings of Note 
Company/Estimate 

Before the Open:

• (M)/.03
• (MDT)/1.54
• (OLLI)/.87 

After the Close: 

• (AVGO)/2.40
• (AI)/-.37
• (CRWD)/1.07
• (DSGX)/.52
• (FIVE)/1.76
• (WOOF)/.02
• (PVH)/1.82
• (VEEV)/2.14 

Economic Releases 

8:15 am EST

• The ADP Employment Change for May is estimated to rise to 120K versus 109K in April. 

10:00 am EST

• Factory Orders for April is estimated to rise +4.6% versus a +1.5% gain in March.
• Factory Orders Ex Transports for April is estimated to rise +.6% versus a +1.6% gain in March.
• ISM Services Index for May is estimated to rise to 53.8 versus 53.6 in April.
• ISM Services Prices Paid for May is estimated to rise to 72.3 versus 70.7 in April.
• Final Durable Goods Orders readings for April. 

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -3,266,330 barrels versus a -3,327,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,835,000 barrels versus a -2,572,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,530,330 barrels versus a -2,107,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.12% versus a +2.9% gain prior. 

2:00 pm EST

• Fed releases Beige Book report. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Logan speaking, Fed's Barr speaking, weekly MBA Mortgage Applications report, Piper Sandler Exchange/Trading Conference, William Blair Growth Stock Conference, Evercore TMT Conference, Deutsche Bank Consumer Conference, (COCO) annual meeting, (SEDG) annual meeting, (URBN) annual meeting, (PLTR) annual meeting, (LMND) annual meeting, (ANF) annual meeting, (DUOL) annual meeting, (POWI) annual meeting, (QS) annual meeting, (OKLO) annual meeting, (HNGE) annual meeting, (APP) annual meeting, (RBRK) annual meeting, (CVNA) investor meeting and the BofA Tech 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 +15.2% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.2 -.2
• 7 Sectors Rising, 4 Sectors Declining
• 52.8% of Issues Advancing, 44.9% Declining 
• TRIN/Arms 1.34 +44.1%
• Non-Block Money Flow +$3.5M
  
• 125 New 52-Week Highs, 50 New Lows
• 54.2% (+.2%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 63.9 +2.8

Polymarket: 

• Will China invade Taiwan by end of 2026? 6.0% -1.0 percentage point
• Trump announces US blockade of Hormuz lifted by June 30th 57.0% +6.0 percentage points
• US x Iran permanent peace deal by June 30th 25.0% +1.0 percentage point 
• US announces new Iran agreement/ceasefire extension by June 30th 59.0% +10.0 percentage points
• US Invades Iran before 2027 17.0% -1.0 percentage point

Other:

• Bloomberg Global Risk-On/Risk-Off Index 122.8 -.6%
• Global Monitor Iran Instability Index 80.0 -6.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 96.0% +1.0 percentage point
• US High-Yield Tech Sector OAS Index 423.25 -2.25 basis points
• Bloomberg Cyclicals/Defensives Index 264.8 -.4%
• Morgan Stanley Growth vs Value Index 162.3 +.1%
• CNN Fear & Greed Index 57.0 (GREED) -2.0
• 1-Day Vix 8.3 -14.0%
• Vix 15.9 -.9%
  
• Total Put/Call .72 -1.4%

Tuesday Watch

Around X:

• @Business  

• The White House says it will reduce tariffs on agricultural equipment, such as combines and harvesters, in order to reduce costs for US farmers and manufacturers.
• Joseph Sanberg, the co-founder of climate-finance startup Aspiration Partners, was ordered to spend 14 years behind bars after admitting he defrauded multiple investors and lenders, according to prosecutors.
• Bloom, a maker of fuel cells that has seen its stock price double in the past two months, doesn’t see a need to sell shares to meet surging demand from artificial intelligence data centers, its CEO says.
• Anthropic has confidentially submitted draft paperwork for a public listing, potentially leapfrogging longtime rival OpenAI. 
• Get up to speed on what's moving global markets.
• Here’s what you need to know to start your day.    

• @ZeroHedge

• How U.S. Retailers Are Absorbing The Fuel-Price Shock.
• Mystery Deepens: Remains Of Missing Los Alamos Nuclear Lab Employee Discovered In Forest.
• Short Seller Andrew Left Found Guilty of Securities Fraud: BBG.
• Ron Paul: The Federal Reserve Is Why The People Are Unhappy.
• "
  Debug": Google Seeks Federal Approval To Release Millions Of Mosquitoes In California, Florida.
• California Legislators Shriek: 'Stop Nick Shirley!'.
• "Relentless Retail": Goldman Breaks Down The Latest Market Flows And Positioning.        
• Massachusetts Sues UnitedHealthcare Over Alleged $100 Million Fraud.
• Shaky Lebanon Ceasefire Reached As Trump Proclaims Iran Talks Back On; Tehran Claims Attack On US Container Ship.
• CTA (modest), Retail (relentlessly) and Corporates (buybacks in full swing) are acting as sponsors of equities, with little regard for concentration considerations, or valuations: Goldman.
• Tonight, I spoke with President Trump and told him that if Hezbollah does not cease attacking our cities and citizens—Israel will attack terror targets in Beirut. This stance of ours remains unchanged. In parallel, the IDF will continue to operate as planned in southern Lebanon. -@netanyahu.
• The U.S. Strategic Petroleum Reserve (SPR) is less than 10 days away from falling to its lowest level since August 1983- over 15,625 days ago- a level not seen since the SPR's initial fill-up that began in 1977.
• Reports in Lebanon of a wave of Israeli attacks in recent minutes in several villages in the Tyre area, including Yater, Sediqin, Buyot a-Siyad, al-Bazuriya, and al-Khosh, which is one of the suburbs of Tyre: Kan 11 news. 
• Headline Havoc & Mighty Macro Conjure Another Chaotic Day; Bonds, Bullion, & Bitcoin Battered.    

• @CNBC

• CNBC Daily Open: Iran deal hopes dim, while AI dazzles investors. 
• Asia-Pacific stocks set to open subdued amid uncertainty over U.S.-Iran peace talks.
• Blue Origin launchpad damaged in rocket explosion may not be restored until 2028, NASA's Isaacman says.
• Tuesday's big stock stories: What’s likely to move the market in the next trading session.
• Stock futures are little changed after all three major indexes close at new records: Live updates.

• @TheTranscript 

• Alphabet is seeking to raise $80B to fund AI infrastructure and compute capacity: — $30B in underwritten offerings — $40B through an At-The-Market (ATM) program — $10B private placement from Berkshire Hathaway. Alphabet: "The company is experiencing strong demand for its AI solutions and services from enterprises and consumers, at levels that are exceeding the company's available supply," $GOOG : -2% AH. (pic)
• HPE CEO: "HPE delivered an exceptional quarter with record-breaking revenue, higher-than-anticipated profitability, and increased free cash flow..." CFO: "Based on our performance, we are raising our fiscal 2026 guidance..." $HPE: +32% AH.

• @WallStEngine

• US data center construction spending has now topped a $50B annualized rate, driven by AI Infra demand. From March 2022 to March 2026, data center construction spending surged 336%, from ~$11B to ~$50B. Over the same period, general office construction fell 34%, from $65B to ~$43B. (graph)
• $CRDO Q4’26 EARNINGS HIGHLIGHTS: Revenue: $437.0M (Est. $432.5M) ; +157.0% YoY. Adj. EPS: $1.16 (Est. $1.00). Adjusted Gross Margin: 68.3% (Est. 65.4%). Non-GAAP Net Income: $226.7M. Cash & Short-Term Investments: $1.4B. Q1 Guide: Revenue: $465.0M-$475.0M (Est. $464.7). GAAP Gross Margin: 66.9% to 68.9%. Non-GAAP Gross Margin: 67.0% to 69.0%. GAAP OpEx: $167.6M-$171.6M. Non-GAAP OpEx: $86.0M-$90.0M. 
• $MCHP projects its Data Center Solutions unit will grow ~65% in 2026 to about $500M in revenue, up from $302.7M in 2025. The unit includes storage controllers, PCIe/CXL memory controllers & Switchtec PCIe switch/retimer products. March-quarter revenue for the unit rose 62.9% YoY. 

• @EricLDaugh

• BREAKING — IT'S OFFICIAL: TINA PETERS RELEASED from Colorado prison!! Let's GO! The MAGA pressure worked, her rights were violated and they ADMITTED IT. PETERS: "It's been quite the ordeal, but I really want to thank God for faithfulness and getting me through it." "I'm so grateful to the supporters that have stood with me." She exposed the fraud, and they WENT AFTER HE FOR IT and violated her rights. Tina Peters needs compensation! (video)

• @GeneralMCNews

• BREAKING: President Trump goes scorched earth on Benjamin Netanyahu: "You're f***ing crazy. You'd be in prison if it weren't for me. I'm saving your ass. Everybody hates you now. Everybody hates Israel because of this." 

• @sendefender 

• During a call between the two leaders earlier today, President Trump lashed out at Israeli Prime Minister Benjamin Netanyahu over Israel’s escalation in Lebanon and its chance at damaging peace talks with Iran, at one point calling Netanyahu “crazy” and accused him of ingratitude, two U.S. officials and a third source briefed on the call told Axios. Summarizing President Trump’s remarks to Netanyahu, a U.S. official said to Axios: “You're fucking crazy. You'd be in prison if it weren't for me. I'm saving your ass. Everybody hates you now. Everybody hates Israel because of this.” While a second source briefed on the call said Trump was “pissed” and at one point yelled at Netanyahu: “What the fuck are you doing?”

• @BRICSinfo

• JUST IN: Israeli National Security Minister Ben Gvir says "it is time to say NO to President Trump." "Now is time to do what is necessary and continue striking Hezbollah."
• JUST IN: President Trump says he believes US and Iran will come to an agreement to extend the ceasefire and reopen Strait of Hormuz within a "week.".

• @brewmarkets

• Fun fact: Google owns 7% of SpaceX and 14% of Anthropic.

• @ArdisDoc

• The app we've been building is finally real. VaxApp launches June 2026, and the waitlist is officially open! Built by Dr. Bryan Ardis and Dr. Sherri Tenpenny, VaxApp puts real vaccine education in your pocket: plain-language breakdowns of all vaccines, the ingredients, the reported adverse events, the questions worth asking your doctor, and direct contacts for all 50 state health departments. Informed consent starts with information. This is the tool that finally gives it to you. (video)

• @Pro_Trading

• Despite cheating with 12 other women according to his wife and soliciting sex on a junior high app, Graham Platner blames his marital problems on media gossip. (video)

Night Trading 

• Asian equity indices are -1.0% to +.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 71.25 unch. 
• China Sovereign CDS 40.25 +.75 basis point.
• China Iron Ore Spot 104.60 USD/Metric Tonne -.14%. 
• Crude Oil 91.77/bbl. -.42% 
• Gold 4,508.1 USD/t oz. +.04%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.59 -.08%.
• Bloomberg Emerging Markets Currency Index 35.30 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 123.0 -.4%.
• US 10-Year Yield 4.45% -1.0 basis point.
• Japan 30-Year Yield 3.95% unch. 
• Volatility Index(VIX) futures 20.5 +.6%.
• Euro Stoxx 50 futures +.30%. 
• S&P 500 futures -.41%.
• NASDAQ 100 futures -.65%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and healthcare 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.