Stocks Reversing Slightly Lower into Final Hour on Mideast War Escalation Fears, War-Induced Inflation Worries, Technical Selling, Consumer Discretionary/Utility Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 51.7 +1.7%
• BofA Private Credit Proxy Index 73.4 -1.4% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .28 unch.
• BofA Global Financial Stress Indicator -.19 -4.0 basis points
• European Financial Sector CDS Index 53.9 +.6%
• Emerging Market CDS Index 141.4 +.5%
• Israel Sovereign CDS 55.6 +.9%
• Bloomberg Global Trade Policy Uncertainty Index .9 +.1
• US Morning Consult Daily Consume Sentiment Index 89.0 -.3

• Citi US Economic Surprise Index 27.2 -2.3

• Citi Eurozone Economic Surprise Index 68.2 +.3

• Citi Emerging Markets Economic Surprise Index 23.8 +.2
• S&P 500 Current Quarter EPS Growth Rate YoY(444 of 500 reporting) +50.7% -1.3 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 388.14 +1.69:  Growth Rate +31.9% +.5 percentage point, P/E 20.0 +.1
• S&P 500 Current Year Estimated Profit Margin 16.23% +6.0 basis  points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +138.4% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 944.03 +3.63: Growth Rate +82.0% +.7 percentage point, P/E 20. +.4
• Bloomberg US Financial Conditions Index 1.33 +9.0 basis points
• US Yield Curve 46.0 basis points (2s/10s) +3.5 basis points
• Bloomberg Industrial Metal Index 180.4 +.6%
• Dutch TTF Nat Gas(European benchmark) 61.7 euros/megawatt-hour +11.1%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.0% -1.0 percentage point
• US Atlanta Fed GDPNow Q3 Forecast +5.8% unch.
• US 10-Year T-Note Yield 4.70% +6.0 basis points
• 1-Year TIPS Spread 1.76 +8.0 basis points

• Highest target rate probability for Oct. 28th FOMC meeting: 50.7% (+3.3 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 43.2%(-1.3 percentage points) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -110 open in Japan 
• China A50 Futures: Indicating -68 open in China
• KOSPI 200 Futures: Indicating +1 open in South Korea 

• DAX Futures: Indicating +90 open in Germany

Portfolio:

• Higher: On gains in my tech/biotech sector longs, index hedges and emerging market shorts
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, took profits in transport longs and added energy longs
• Market Exposure: Moved to 75% net long

Bear Radar

Style Underperformer:

• Small-Cap Value -.6%

Sector Underperformers:

• 1) Airlines -3.9% 2) Homebuilding -2.2% 3) Semis -1.7%

Stocks Falling on Unusual Volume: 

• MATW, IIIV, MNDY, PZZA, TTD, UTI, DOLE, ZIM, HE, AAON, MLTX, DOCS, B, BLBD, UVV, LASR, JBGS, SIMO, HELP, COHR, AXTI and LINC

Stocks With Unusual Put Option Activity:

• 1) WHR 2) PZZA 3) AIPO 4) EYPT 5) UAA

Stocks With Most Negative News Mentions:

• 1) PZZA 2) CELH 3) WDC 4) APP 5) HUBS

Sector ETFs With Most Negative Money Flow:

• 1) XLK 2) XLF 3) XLI 4) SMH 5) KBE

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.4%

Sector Outperformers:

• 1) Oil Service +5.3% 2) Energy +5.0% 3) Cyber Security +3.0%

Stocks Rising on Unusual Volume:

• VREX, HZO, BSP, SLN, NESR, FSLY, STDN, REPL, CLMT, TXG, HP, LFST, BETR, RBRK, P, SDRL, VAL, DDOG, HNRG, QDEL, BMRN, TRUP, DSP, DCTH, PBF, MP, CCOI, GMTL, IPI, TEM, AKAM, VRTX, EXK, RDNT, CCB, GRAL, LXU, NTSK, CRC, BBNX, OMDA, DBVT, KSPI, VISN, BLLN, CXW, ERO, MESO, BLZE, AEHR, AXSM, SGRY, ALOY, ADIG, ABNB, GMED, FSM, HL, QNST, VIA, UBER, CAKE and INVX

Stocks With Unusual Call Option Activity:

• 1) BETA 2) ERO 3) SE 4) BKD 5) ABCL 

Stocks With Most Positive News Mentions:

• 1) NESR 2) POWW 3) HP 4) FSLY 5) TXG

Sector ETFs With Most Positive Money Flow:

• 1) SOXX 2) DRAM 3) KRE 4) XLB 5) XLE

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:

• (ARMK)/.48
• (CAH)/2.42
• (CDNL)/.46
• (ONON)/.34
• (SE)//.86
• (SFD)/.60 

After the Close: 

• (BGS)/.06
• (CAVA)/.18
• (CRWV)/-1.23
• (HRB)/2.21
• (LITE)/2.97
• (SMCI)/.92 

Economic Releases 

• None of note

Upcoming Splits

• (MNST) 2-for-1

Other Potential Market Movers

• The 3Y T-Note auction, weekly US Retail Sales reports, Citi Natural Resources Conference, Oppenheimer Tech Conference, Deutsche Bank Industrials Summit, Raymond s Industrials Showcase, Canaccord Genuity Growth Conference, KeyBanc Tech Leadership Forum, (FLUT) investor meeting, (MNRO) annual meeting and the JPMorgan Auto 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 -10.3% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.2 -1.9
• 6 Sectors Rising, 5 Sectors Declining
• 37% of Issues Advancing, 68.0% Declining 
• TRIN/Arms .65 -47.6%
• Non-Block Money Flow -$126.9M
  
• 73 New 52-Week Highs, 69 New Lows
• 60.8% (-1.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 69.3 +2.3

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 9.0% -1.0 percentage point
• Strait of Hormuz traffic returns to normal by August 31st 4.0% -3.0 percentage points
• Iran agrees to end enrichment of uranium by Sept. 30th 7.0% -1.0 percentage point
• Israel withdraws from Lebanon by August 31st 1.0% unch.
• US Invades Iran before 2027 17.0% unch.
• US announces end of Iranian blockade by August 31st 34.0% -17.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 127.70 +1.3%
• Global Monitor Iran Instability Index 65.0 -9.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 91.0% +1.0 percentage point
• US High-Yield Tech Sector OAS Index 465.5 +.25 basis point
• Bloomberg Cyclicals/Defensives Index 274.8 +1.3%
• Morgan Stanley Growth vs Value Index 151.3 -.05%
• CNN Fear & Greed Index 65.0 (GREED) +2.0
• 1-Day Vix 8.4 -26.4%
• Vix 15.3% +2.8%
• Total Put/Call .82 +6.5%

Monday Watch

Around X:

• @Business   

• Retired Brig. Gen. Mark Kimmitt explains the global risk to US forces and allies with stockpiles of critical munitions running low. “Every Patriot [missile] that’s shot in the Middle East is one that can’t be shot at an incoming Chinese missile.”
• Well-timed rain across major growing regions have buoyed the outlook, prompting many analysts to upgrade their initially dire forecasts for the 2026 crop. 
• Here’s the latest news and analysis on the oil market. 
• Here's what's moving markets today. 
• Here’s what you need to know to start your day. 

• @Zerohedge 

• Trump Says "We Are Low Keying It" With Iran As Options For Walking Away Have Drastically Narrowed. 
• Netanyahu says Trump's new Gaza plan is unacceptable. 
• No Hikes For You. 
• Agents Over Humans, Opticals Over Memory, Open Over Closed: Goldman's Top Tech Trader's 10 Most-Watched Charts. 
• Harris Renews Calls To Pack The Court Despite Poll Showing Most Americans Agree With Its Decisions. 
• Watch: 'Privileged Idiot' DSA Co-Chair Has Absolute Porridge For Brains. 
• NEW: More drama on the Pentagon's 1260H list. A US judge blocked the Defense Department from enforcing its designation of WuXi AppTec as a Chinese military company, granting temporary relief to the major pharmaceutical contractor: 
• Trump son-in-law Jared Kushner paid $120 million for a swath of coastal Albania to build a resort. Problem is the seller is an Albanian gangster (based in Miami, of course), and the land belongs to a bunch of villagers. @WSJ uncovers this wild story: 
• Here is the magnitude of hedge fund re-grossing over the past few days in AI themes versus the de-grossing from late June to the end of July. Conclusion: Not a lot of re-grossing. 
• S&P 8000 'Here We Come': Goldman Partner Sees Even More Demand Outweighing Record Equity Issuance. 
• Rich-Kid Mamdani Ally Wants To "Abolish Rent"; Could Hawley Reform Bill Stop College Indoctrination? 
• Abdul El-Sayed acknowledges that Americans would pay higher taxes under his proposed government-run, socialist healthcare system. (video) 
• AOC starts process of freezing her eggs, hints at 2028 mindset: 'I think it's badass'. 
• "Lie To People Who Want To Be Lied To": How To Make A Political Fortune As A Far-Left Democrat. 
• UK Police Literally Have An 'Elite Squad' To Flag Spicy Social Media Posts...
• The Democrat Embrace Of Islamo-Socialism Is Party Suicide.
• Apple Tests Chinese Memory Chips As Supply Crunch Pushes PC Giants Toward CXMT.
• New data centers are being paused. Data centers must disclose their plans to: pay their own way. provide their own power. reuse their own water. reduce the cost of electricity. & avoid disturbing neighborhoods. -@GregAbbott_TX.
• Turkish FM Affirms Defense Pact With Pakistan, Saudi Arabia Is Same As NATO's Article 5.
• Fire Erupts At Saudi Aramco's Jazan Refinery As Iran-Backed Houthis Claim Drone Strike.
• From "Designed Viruses" To "Digital Telepathy" – AI Panic Kicks Into Overdrive.
• Turkey Restricts Black Sea Traffic As Drone Attacks On Commercial Vessels Spike.
• Sports Illustrated’s headline is “Sophie Cunningham got a bitter taste of karma” by getting clotheslined. Sports media is broken. It’s way more left wing than political media.
• Our investigation into Dr. Anthony Fauci’s phone is only just beginning. We have already recovered 34,000 text messages, 522 voicemails, and 3 contacts — spanning from 2014 to a few days before Fauci left the NIH. We will continue to scour every piece of evidence to deliver the truth to the American people. (video)
• The Trojan Horse Inside Your Head: How Government Propaganda Is Quietly Dismantling Free Thought.
• Diarrhea-Gate: One Sinaloa Farm, 345 Sick, And Two Restaurant Chains Down Double Digits.
• Iran's Mehr Releases Video Of Supreme Leader Mojtaba Khamenei For 'First Time' - Except It's Old.
• The Rarest Asset In A Fourth Turning: The Freedom To Act.
• Trump-Backed "El Tigre" Takes Power In Colombia As Right-Wing Wave Sweeps Americas.
• WNBA To Hold 'Listening Sessions' After Second Former NBA Star Says He's A Woman, Declares For Draft.
• JUST IN: WNBA Commissioner announces the league is meeting to review what a woman is, after multiple former NBA stars announced plans to join the league.
• If tariffs are inflationary, should tariff refunds be deflationary?
• tech fund inflows.
• Ukrainian Drone With Huge Explosive Payload Hits Bulgaria Near Vital Gas Pipeline.            
• *US SIPHONING ARMS SUPPLIES FROM ASIA, EUROPE DUE TO WAR: NYT. *US ARMS STOCKPILES AT TROUBLING LEVELS: NYT CITING OFFICIALS. 
• 'Leadership Is Rotating': This Is What Goldman Traders Are Watching Outside Of AI. 
• "We're Here To Destroy The White Race": Democratic Socialist Of America Hero Declares War On West. 

• @CNBC

• S&P 500 futures are flat as traders wait for possible Strait of Hormuz deal, inflation data ahead: Live updates.
• How a small Israeli startup was linked to rogue AI hacks at OpenAI, Anthropic and Meta.   
• Pentagon pushes defense companies to boost weapons production after concerns of depleted stocks. 
• SK Hynix said on Friday it will invest 54 trillion Korean won ($38.1 billion) to build two new memory chip manufacturing plants, as demand for the components, which are key to AI, continues to grow. The South Korean tech giant announced a 35.2 trillion won investment in a fabrication plant, or fab, in Yongin called “Y2,” with 19.1 trillion won earmarked for a facility in Cheongju called “M17.” 

• @MarengoFS 

• $RKLB Earnings Preview.

• @MarioNawful

• The former head of Mossad was just quietly placed in charge of one of the largest military industrial conglomerates in the United States. Lt. Col. Anthony Aguilar argued that changes everything about how the U.S.-Israel relationship actually works. "Everything from microchips that go into the F-35 to sensors that go into the Patriot missile interceptor program, to drone technology, to communications and radios. They touch everything, and the guy in charge is now an Israeli Mossad agent." While Congress fights over $500 billion in unbudgeted war costs, the integration is already done. (video)

• @GenFlynn

• Breaking: The Storm has arrived! In the old days, one would ring the church bells warning of an incoming storm. People from all around would understand exactly what was happening. Right now, church bells across the country are ringing…the question is anyone listening? Without accountability of those who committed the most egregious crimes of treason or conspiracy to overthrow our government are placed in checkmate, the storm will not subside and in fact it will only grow in intensity. Warning, the storm is here!

• @ShadowofEzra

• Michigan Democrat primary winner, Jeremy Moss, says: “I don't think it's wrong for Israel to use America as a pawn, America is not our homeland”. (video)

• @KobeissiLetter

• BREAKING: US corporate profits before tax as a % of GDP are up to a record 14%. This ratio has nearly doubled since the 2008 Financial Crisis. This also exceeds previous peaks of ~13% posted in 1951, 2010, and 2011. Meanwhile, US corporate profits after tax as a % of GDP are up to ~11%, also an all-time high. By comparison, this figure averaged ~5% between 1980 and 1995. This comes as nominal profits after tax have surged +101% since the 2020 pandemic, to a record $3.62 trillion. US corporations are more profitable than ever.

• @GuntherEagleman

• A “women’s” league forming a committee to define the word woman is peak woke stupidity. Common sense didn’t walk out, it got thrown out.

• @bennyjohnso

• Cop Who Was Jailed Over The Arrest of George Floyd Believes He Was Set Up To Be MURDERED. In Prison Attack to SILENCE Him. Tou Thao says if he lied, he would have been spared prison and maybe even been made police chief. He chose to speak the truth because of his Christian faith. “There’s people in government who want us dead. If we die, the truth dies.” “I could have taken the easy way out and sided with the woke mob… if I would’ve went that way, who knows, I probably could’ve been the Chief of Minneapolis.”

• @Jason

• Google’s power move is to undercut the entire token market by making Gemini free for consumers AND by going open source like they did with android. Keep all the clever hooks in the open source models to Google franchises like YouTube, Gmail, search, android, play store, ad networks, Google suite etc The android playbook applied hard to frontier model space.

• @mcafeenew

• NICK SHIRLEY JUST EXPOSED RAPHAEL WARNOCK — MORE VOTES THAN ACTUAL RESIDENTS IN THREE GEORGIA COUNTIES! Atlanta is next on the citizen journalist’s hit list. Nick Shirley and his team have taken Atlanta by storm this week, tracking down leads from Tulsi Gabbard’s document dump on the 2020 election. They discovered that Senator Raphael Warnock, who “won” that year alongside Biden, received more votes in three separate counties than those counties even have residents.

• @GenFlynn

• The American First movement divide must end. I will lock arms with anyone who stands up for the United States of America and the Liberties we have fought for and many have sacrificed their lives for. We are the plan. America’s non negotiables: 1. Call out Covid for what it was (a crime against humanity). 2. We will always protect our children. 3. Election integrity is mandatory. 4. Sovereignty must be protected at all costs. 5. Not Anti-War, just Anti-Stupid War. 6. Demand accountability. 7. Stop using our tax money to fund all forms of corruption. 8. Recognize that this is a spiritual battle between globalism and American Christian principles. 9. Sharia Law is not compatible with Constitutional Law. 10. American Patriots will never quit. Local action = National impact I can respect Tucker Carlson’s 10-point proposal, but may suggest increased strength in a few areas. Honest, Optimistic, Wise, and United are a bit vague. I would adjust these to: Demand accountability, Demand accountability, Demand accountability…and to only unite with those who love and fight for this country. To the others…WAR. (video)

• @amitisinvesting

• BERKSHIRE IS BUYING STOCKS AGAIN FOR THE FIRST TIME SINCE 2022: - Bought $25B of stock, sold $3.7B. - Bought Taylor Morrison Home for $6.8B. - Invested $10B in Alphabet $GOOGL during Q2, now a top 5 holding. - Even bought $4.5B of their own stock back. berkshire’s back.

• @nogps1

• What right do they have? In what world should we have to endure a life where our skies and sun are covered, just because a few corrupt globalists decide this is our future... and all to further their plans to gain total control of the population, using their climate scam alibi! (video)
• You can't run from this, unfortunately... Geoengineering is now global, and it will continue unless enough people start realizing what is happening and say a collective NO!! None of us consented to this, none of us were even consulted, and there has never been any oversight! (video) 

• @JuanOsavin107Q

• A friendly reminder that commercial airlines NEVER fly in a formation like this!! And no, it's not a military air show over the city of Leicester, UK. They're spraying you like bugs. (video)

• @LaraLogan

• Just so we are clear,when children are trafficked they are raped over & over every day, often for years. That can mean thousands and thousand of times. Sometimes violently, sometimes to the point of death. These are crimes against humanity. God help us all.

• @Bitcoin_Teddy

• ICU Nurse, Tiffany Dover, was one of the 1st people in the world to get a COVID mRNA injection...within 30 seconds on national TV, she collapsed. (video)
• 5 years ago Bill Gates told the world that people had “no choice” avoiding the COVID shot, claiming the unvaxxed would “endanger their grandparents” & the vaxxed were 100% protected. Every single claim was false. All of it. And he walked away without a single punishment. (video)

• @overton_news

• Bill Maher ends his show with a brutal minute-long takedown of Anthony Fauci and the liberal elites who turned him into a self-aggrandizing celebrity. The last line of the entire thing was pure cinema. His audience burst out into a massive applause the moment they heard it. MAHER: “But you have to try awfully hard not to notice how much Fauci is energized by being embraced by one particular cultural tribe.” “It was Julia Roberts who was telling Fauci he was Jesus with a petri dish. Not Randy Quaid.” “And that side likes to think of themselves as the purely ‘Science’ people, even though keeping kids out of school that long and traumatizing two-year-olds with masks wasn’t good science.” “Fauci supported some strange policies for such an esteemed epidemiologist.” “Natural immunity doesn’t count now? Meaning, even if you’ve had the disease, you still had to get the shot?” “That sounds more like what Pfizer and Fauci’s celebrity friends wanted to hear.” “He let this shit go to his head.” “Turns out the really dangerous ‘intimate contact’ wasn’t shaking hands, it was kissing ass!” (video)

•  @ImBreckWorsham

• Is it just me, or is @RobertKennedyJr being awfully quiet about the new MRNA flu vaccine?

Night Trading

• Asian indices are +.25% to +1.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 67.75 -.75 basis point.
• China Sovereign CDS 37.25 -.25 basis point.
• China Iron Ore Spot 95.25 USD/Metric Tonne +.21%.
• Crude Oil 78.87/bbl. +.9%
• Gold 4,384.60 USD/t oz. -.34% 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.34 -.10%. 
  
• Bloomberg Emerging Markets Currency Index 34.52 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 127.4 +1.1%.
• US 10-Year Yield 4.66% +1.0 basis point. 
• Japan 30-Year Yield 3.95% +2.0 basis points. 
• Volatility Index(VIX) futures 18.6 -.6%. 
• Euro Stoxx 50 futures -.08%.
• S&P 500 futures -.01%.
• NASDAQ 100 futures +.12%.

Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by technology and industrial 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 week.