Stocks Reversing Modestly Lower into Final Hour on Earnings Outlook Jitters, Technical Selling, Profit-Taking, Alt Energy/Pharma Sector Weakness

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.52 -.05%
• US 10-Year T-Note Yield 4.33% -8.0 basis points
• 3-Month T-Bill Yield 4.33% -1.0 basis point

• China Iron Ore Spot 103.8 USD/Metric Tonne +1.0%
• Dutch TTF Nat Gas(European benchmark) 34.1 euros/megawatt-hour +3.7%

• Citi US Economic Surprise Index 7.8 +1.0 point

• Citi Eurozone Economic Surprise Index 29.0 -.9 point

• Citi Emerging Markets Economic Surprise Index 9.2 -.6 point
• S&P 500 Current Quarter EPS Growth Rate YoY(197 of 500 reporting) +7.1% -1.2 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 283.74 +.14:  Growth Rate +11.1% +.1 percentage point, P/E 22.5 -.1
• S&P 500 Current Year Estimated Profit Margin 13.42% -1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(3 of 10 reporting) +22.4% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 456.05 +.49: Growth Rate +20.9% +.1 percentage point, P/E 33.3 unch.
• Bloomberg US Financial Conditions Index .65 +1.0 basis point
• Bloomberg Euro-Zone Financial Conditions Index 1.51 -7.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 7.0 -.1
• US Yield Curve 45.25 basis points (2s/10s) -3.25 basis points
• US Atlanta Fed GDPNow Q2 Forecast +2.9% +50.0 basis points
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 40.7% -.8 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.73% unch.
• 1-Year TIPS Spread 2.78 +8.0 basis points
• 10-Year TIPS Spread 2.41 -2.0 basis points
• Highest target rate probability for Sept. 17th FOMC meeting: 64.8% (+1.7 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Oct. 29th meeting: 50.2%(+.4 percentage point) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
  

Polymarket:

• Which Countries Will the US Agree to Tariff Agreements with Before August? 

• China 61.0% +29.0 percentage points
• India 10.0% -6.0 percentage points
• South Korea  73.0% +14.0 percentage points.
• Mexico 26.0% +6.0 percentage points. 

Overseas Futures:

• Nikkei 225 Futures: Indicating +36 open in Japan 
• China A50 Futures: Indicating -5 open in China

• DAX Futures: Indicating +92 open in Germany

Portfolio:

• Slightly Lower: On losses in my consumer discretionary/industrial sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 75% Net Long

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

Earnings of Note 
Company/Estimate 

Before the Open:

• (AEM)/1.78
• (MO)/1.39
• (ARCB)/1.47
• (ADP)/2.23
• (BG)/1.09
• (CHKP)/2.36
• (CHEF)/.46
• (FSS)/1.06
• (GRMN)/1.90
• (GNRC)/1.32
• (GSK)/1.17
• (HOG)/.96
• (HSY)/.99
• (HUM)/5.92
• (ITW)/2.56
• (ODFL)/1.28
• (SMG)/2.26
• (STRA)/1.43
• (TW)/.86
• (UBS)/.71
• (VFC)/-.34
• (VRT)/.83
• (WING)/.87 
• (BABA)/15.51
• (ALL)/3.25 

After the Close: 

• (ALB)/-.79
• (ALGN)/2.57
• (ARM)/.35
• (AVB)/2.81
• (CHRW)/1.16
• (CVNA)/1.17
• (CGNX)/.24
• (EBAY)/1.30
• (FFIV)/3.51
• (FE)/.49
• (F)/.33
• (GH)/-.72
• (LRCX)/1.21
• (META)/5.88
• (MGM)/.57
• (MSFT)/3.38
• (MOD)/.92
• (MYRG)/1.52
• (PPC)/1.57
• (PBI)/.28
• (PRU)/3.22
• (QTWO)/.52
• (QCOM)/2.71
• (HOOD)/.31
• (SFM)/1.24
• (RGR)/.38
• (TTMI)/.52
• (WDC)/1.48 

Economic Releases 

8:15 am EST

• The ADP Employment Change for July is estimated to rise to 75K versus -33K in June. 

8:30 am EST

• The US Treasury Quarterly Refunding Announcement.
• 2Q GDP is estimated to rise +2.5% versus a -.5% decline in 1Q.
• 2Q Personal Consumption is estimated to rise +1.5% versus a +.5% gain in 1Q.
• 2Q GDP Price Index is estimated to rise +2.2% versus a +3.8% gain in 1Q.
• The Core PCE Price Index QoQ is estimated to rise +2.3% versus a +3.5% gain in 1Q. 

10:00 am EST

• Pending Home Sales MoM for June is estimated to rise +.2% versus a +1.8% gain in May.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,979,330 barrels versus a -3,169,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -973,330 barrels versus a -1,738,000 barrel decline the prior week. Distillate inventories are estimated to rise by +17,170 barrels versus a +2,931,00 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall -.28% versus a +1.6% gain prior.

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds Rate at 4.25-4.5%. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The FOMC press conference, weekly MBA Mortgage Applications report, Goldman Sachs AI Symposium, Alzheimers Assoc. Intl. Conference and the (MCK) annual meeting 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 +6.1% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 19.5 -1.6
• 6 Sectors Declining, 5 Sectors Rising
• 48.7% of Issues Advancing, 48.8% Declining 
• TRIN/Arms 1.87 +47.2% 
  
• Non-Block Money Flow +$150.3M
  
• 74 New 52-Week Highs, 18 New Lows
• 53.8% (-.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 59.2 -2.1

Other:

• Bloomberg Global Risk-On/Risk-Off Index 80.3% +1.0%
• Bloomberg Cyclicals/Defensives Index 250.0 -1.8%
  
• Morgan Stanley Growth vs Value Index 168.8 +.03%
• CNN Fear & Greed Index 71.0 (GREED from EXTREME GREED) -3.0
• 1-Day Vix 7.7 -3.0%
  
• Vix 15.1 +.7%
  
• Total Put/Call .87 +3.6%
• Polymarket:  Which Countries Will the US Agree to Tariff Agreements with Before August?

• China 46.0% +14.0 percentage points
• India 9.0% -7.0 percentage points
• South Korea  66.0% +8.0 percentage points.
• Mexico 22.0% +2.0 percentage points. 

Tuesday Watch

Around X:

• @Business

• Commerce Secretary Howard Lutnick said a 90-day extension of a trade truce with China was a likely outcome with negotiations between the two countries underway in Stockholm. 
• China’s proposed coal mine developments risk creating an oversupply and derailing climate goals, according to Global Energy Monitor. 
• Here’s the latest news and analysis on the oil market. 
• Union Pacific is nearing an agreement for a stock-and-cash deal for Norfolk Southern that would value the smaller rival at about $320 a share.
• Gold held a decline after the dollar rose the most since May following a tariff deal between the US and the European Union, with investors now focusing on prospects for an extension of a trade truce between Washington and Beijing.
• Alphabet's Waymo plans to launch robotaxi service in Dallas next year in partnership with Avis, a push by the autonomous car company to diversify beyond its relationship with Uber to further expand across the US.
• Celestica raised its full-year revenue forecast for the third time in a row as demand grows for its cloud-computing segment. 
• Berkshire Hathaway is selling about a third of its stake in VeriSign, locking in a sizable gain since the Warren Buffett-led investment firm began building its stake in the domain name registry services company more than a decade ago. 
• Uber is pushing back on a new NYC proposal requiring delivery app workers to display company-issued identification numbers on reflective vests, saying it "singles out" immigrant workers for "heightened surveillance and control".
• Cadence Design pleaded guilty to charges accusing the company of violating US export controls by selling hardware and software to China’s National University of Defense Technology. 
• An activist investor and a real estate executive are calling donors to commit at least $25,000 to an effort opposing Zohran Mamdani’s run for mayor of New York City. 
• The US Education Department said that it has launched an investigation of Duke University and the Duke Law Journal over allegations of civil rights violations. 
• Get up to speed on what's moving global markets.
• European capitals defended the trade deal struck with Donald Trump, which will see the European Union accept a 15% tariff on most of its exports to the US while reducing levies on some American products to zero: Here’s your Evening Briefing.   
• Here's what you need to know to start your day. 

• @ZeroHedge 

• Electric Utilities Will Invest More Than $1.1 Trillion By 2030 To Meet Demand Growth. 
• South Korea wants to modernize the US navy. South Korea proposed a shipbuilding project worth tens of trillions of won to US during the tariff negotiations, Yonhap News says, citing unidentified sources.
• The DOJ has filed a formal complaint, accusing District Judge James Boasberg of misconduct.
• NYC Blackstone Tower Shooter ID'd As Shane Tamura.
• FOX NEWS: "Light skin African-American looking guy. Kind of middle eastern looking." CNN: "Male, possibly white, wearing sunglasses, has a mustache." Actual quotes from both. (pic)
• Chinese Intel-Linked Bankers Reportedly Fundraised For L.A. Mayor Karen Bass. 
• "This Isn't Cultural Drift - It's Social Engineering...".
• BREAKING: Two people were taken into custody at the scene of active shooter in Manhattan, a man and a woman. The woman has a cut on her head and the man allegedly said, “Free Palestine, I’m not the active shooter!” (pic)
• Multiple People Shot At Blackstone's New York Headquarters; Shooter Killed Himself
  .
• CDC Releases Update On 'Long COVID' Symptoms.
• Authorities have charged at least five suspects in a violent brawl that took place in downtown Cincinnati according to police. 
    
   
• The fact that gay chiId sex offenders are able to legally purchase baby boys is a massive moral indictment on us all. (video)
• Sydney Sweeney Wears Jeans In Ad, Woke Liberals See Nazis.
• The S&P closed up 1 point (+0.02%) today after another last hour ramp to print a 6th consecutive all time high.  
• Dollar Rips, Gold Dips On Trade-Deals; Momo, Memes, & 'Most Shorted' Dump Into Crazy Week. 

• @CNBC 

• Tuesday’s big stock stories: What’s likely to move the market in the next trading session.
• Stocks making the biggest moves after hours: Cadence Design Systems, Whirlpool, Nucor and more. 

• @MarioNawful  

• PHONES BEFORE 13 LINKED TO WORSE MENTAL HEALTH LATER. A study of over 100,000 young adults found kids who got smartphones early had higher rates of depression, low self-worth and suicidal thoughts. Nearly half of girls who had phones by age 5 or 6 reported severe suicidal thoughts compared to 28% who got them at 13 or older. Researchers say delaying smartphones until 14 and social media until 16 could help prevent long-term damage.
• LOCKHEED CEO TEASES “GAME-CHANGING” SECRET PROGRAM - IN DEVELOPMENT SINCE 2018. Lockheed Martin’s CEO just dropped a rare hint: the defense giant has been working on a top-secret program since 2018 - and it’s nearly ready. Details? Classified. But he called it “a game-changer” and “critical for both U.S. and allied forces”, with projected demand stretching years into the future. Eyes on the black budget.

• @GenFlynn

• There is an incredibly important and very strategic message here for all Americans and all of humanity. Thank you @POTUS @realDonaldTrump. There is more to come! (video)
• BREAKING: D.C. Sources Tell Me The REPUBLICANS On The Senate Intelligence Committee Chaired By @SenTomCotton ARE CRAFTING LEGISLATION THAT WOULD START RESTRICTING @DNIGabbard FROM REVIEWING & RELEASING, TO THE PUBLIC, DEEP STATE & INTEL FILES SHOWING THEY'VE BEEN CRIMINAL! Why @TomCottonAR ? This is starting to look really bad for you.  

• @LeadingReport

• BREAKING: Donald Trump turned down opportunity to travel to Jeffrey Epstein’s island, per Axios.

• @amuse 

• ISLAMIFICATION: The Boston Police Department is actively reaching out to its growing Islamic community to recruit Islamic police officers to enforce the law and 'social norms' in predominantly Muslim neighborhoods.

• @GuntherEagleman

• BREAKING: Leader John Thune has just started the process to CONFIRM Trump nominees! Either they hit OVERDRIVE right now, or most of the 130 nominees waiting will be stalled unless Trump uses recess appointments. (video)
  Quote

• @RodDMartin

• BREAKING: Trump admin rebuffs Schiff, reopens massive Pacific oil reserve capable of 80% of regional production. After 10 years offline, 190 million barrels are back in play—despite Adam Schiff’s tantrum. Here’s how Trump revived Santa Ynez in just five months.

• @annvandersteel

• When did this white blanket blocking the sun become a normal thing in the sky? Especially in Florida? Its not. Its from manipulating our skies. I am up in Marblehead Massachusetts and it is the same up here. The Bill Gate Globalist cabal is Dimming the Sun. They are sick freaks. (pic)

• @disclosetv

• ICYMI - Attack drones will be deployed at select U.S. schools to stop school shooters in emergencies, by Campus Guardian Angel, a company founded by U.S. military and defense contractors. (video)

• @MsKristaMonroe

• Operation Grayskull just quietly became one of the most successful child predator takedowns in U.S. history. Four of the most disturbing child abuse websites on the dark web were completely dismantled. Eighteen offenders were convicted in the U.S. alone. Over 300 years in federal prison have been handed out so far. And the networks haven’t resurfaced. This didn’t happen under Biden. It started during Trump’s first term. And it’s wrapping up now, under Trump’s second, with Kash Patel at the head of the FBI.

Night Trading 

• Asian equity indices are -.5% to +.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 68.25 -.5 basis point.
• China Sovereign CDS 40.25 -.75 basis point.
• China Iron Ore Spot 101.4 USD/Metric Tonne +.6%. 
• Polymarket:  Which Countries Will the US Agree to Tariff Agreements with Before August?

• China 32.0% -25.0 percentage points
• India 16.0% -6.0 percentage points
• South Korea  58.0% -6.0 percentage points.
• Mexico 20.0% -8.0 percentage points. 

• Swiss Franc/Offshore Chinese Renminbi Cross 8.94 +.05%.
• Bloomberg Emerging Markets Currency Index 36.5 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 80.1 +1.0%.
• US 10-Year Yield 4.40% -1.0 basis point.
• Volatility Index(VIX) futures 17.3 -.8%.
• Euro Stoxx 50 futures +.26%. 
• S&P 500 futures +.07%. 
• NASDAQ 100 futures +.15%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and consumer 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 Slightly Lower into Final Hour on US Dollar Strength, Technical Selling, Profit-Taking, Alt Energy/Pharma Sector Weakness

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.5 -.5%
• US 10-Year T-Note Yield 4.41% +3.0 basis points
• 3-Month T-Bill Yield 4.34% -1.0 basis point

• China Iron Ore Spot 101.9 USD/Metric Tonne +.9%
• Dutch TTF Nat Gas(European benchmark) 32.9 euros/megawatt-hour +1.2%

• Citi US Economic Surprise Index 6.8 +3.3 points

• Citi Eurozone Economic Surprise Index 29.9 -2.4 points

• Citi Emerging Markets Economic Surprise Index 9.8 -5.4 points
• S&P 500 Current Quarter EPS Growth Rate YoY(168 of 500 reporting) +8.3% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 283.60 +.29:  Growth Rate +11.0% +.1 percentage point, P/E 22.6 +.1
• S&P 500 Current Year Estimated Profit Margin 13.43% -1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(3 of 10 reporting) +22.4% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 455.56 +1.00: Growth Rate +20.8% +.3 percentage point, P/E 33.3 unch.
• Bloomberg US Financial Conditions Index .64 +2.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.58 -5.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 7.1 +.3
• US Yield Curve 48.5 basis points (2s/10s) +1.5 basis points
• US Atlanta Fed GDPNow Q2 Forecast +2.4% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 41.5% +.3 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.73% unch.
• 1-Year TIPS Spread 2.70 +7.0 basis points
• 10-Year TIPS Spread 2.43 +1.0 basis point
• Highest target rate probability for Sept. 17th FOMC meeting: 63.7% (+1.8 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Oct. 29th meeting: 50.5%(+1.0 percentage point) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
  

Polymarket:

• Which Countries Will the US Agree to Tariff Agreements with Before August? 

• China 45.0% -12.0 percentage points
• India 19.0% -3.0 percentage points
• South Korea  61.0% -3.0 percentage points.
• Mexico 29.0% +1.0 percentage point. 

Overseas Futures:

• Nikkei 225 Futures: Indicating -193 open in Japan 
• China A50 Futures: Indicating -35 open in China

• DAX Futures: Indicating +65 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/utility sector longs and emerging market shorts
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 75% Net Long

Bull Radar

Style Outperformer:

• Large-Cap Growth +.2%

Sector Outperformers:

• 1) Oil Service +2.4% 2) Disk Drives +2.1% 3) Electrification +2.1%

Stocks Rising on Unusual Volume:

• CELC, SDM, NEGG, SRPT, TRML, BAND, SMCI, PLAB, ACMR, PD, DNTH, BKV, TRMD, SGRY, NICE, CUBI, UPB, MRC, VG, CAMT, ATRC, M, WGS, APPN, SPRY, NKE, AMD, SKYW, FLNG, TSLA and WNC

Stocks With Unusual Call Option Activity:

• 1) IOT 2) XLB 3) FNGR 4) SQNS 5) GTES

Stocks With Most Positive News Mentions:

• 1) CELC 2) NKE 3) BWFG 4) ANF 5) AMD

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) VOX 3) XBI 4) MSTY 5) VGT

Charts:

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