Stocks Lower into Afternoon on Mideast War Resumption Fears, US/China Trade Deal Disappointment, Surging Long-Term Rates, Tech/Homebuilding Sector Weakness

Overseas Futures:

• Nikkei 225 Futures: Indicating +700 open in Japan 
• China A50 Futures: Indicating -27 open in China

• DAX Futures: Indicating +40 open in Germany

Portfolio:

• Slightly Lower: On losses in my industrial/tech/consumer discretionary/biotech sector longs
• Disclosed Trades: None
• Market Exposure: 75% Net Long

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

Earnings of Note 
Company/Estimate 

Before the Open:

• (BIDU)/11.56

After the Close: 

• None of note

Economic Releases 

8:30 am EST

• NY Fed Services Business Activity Index for May.

10:00 am EST

• The NAHB Housing Market Index for May is estimated at 34.0 versus 34.0 in April. 

4:00 pm EST

• Net Long-Term TIC Flows for March.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Venable speaking, Cannacord Genuity Metals/Mining Conference, (FIX) annual meeting, (VSH) annual meeting and the JPMorgan Tech/Media/Communications Conference could also impact global trading on Monday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Friday Watch

Around X:

• @Business  

• US Trade Representative Jamieson Greer said he anticipates that China would commit to billions in American agricultural purchases.
• What’s next for US President Donald Trump and Chinese President Xi Jinping after their summit in Beijing? Bloomberg reporters answer your questions in a Live Q&A on May 14 at 10:45 p.m. ET / May 15 at 10:45 a.m. HKT. 
• CIA Director John Ratcliffe led a US delegation to Cuba and conveyed to officials there that the administration wished to negotiate with the communist government, but only if it made changes, an agency official said.  
• Toyota has filed for approval to build a new manufacturing facility in Texas with a total investment of $2 billion. 
• President Donald Trump’s latest financial disclosures show that he made a slew of stock and bond purchases with major American companies in the first quarter of the year totaling in the tens of millions of dollars and possibly more. 
• Fed Governor Michael Barr on Thursday pushed back against proposals to shrink the central bank’s balance sheet, describing them as wrong and a threat to financial stability.
• The Republican-controlled House tied on a vote to stop the US War against Iran in a sign of deepening political opposition to the conflict. 
• Get up to speed on what's moving global markets.
• Here’s what you need to know to start your day.   

• @ZeroHedge

• *TRUMP: ENRICHED URANIUM CAN BE ENTOMBED, WOULD RATHER GET IT.
• *TRUMP: WE DON'T NEED STRAIT OF HORMUZ OPEN. 
• Grenade-Type IED Found At Alabama Dam Raises Alarm Over Critical Infrastructure Threats. 
• Major Bank Faces Legal Heat Over Allegations Of Debanking Conservatives.
• 'Killshot' Is Coming For Earth Warned CIA Remote Viewer Before Recent Death.
• Spencer Pratt Within Single-Digit Territory Of Far-Left L.A. Mayor Karen Bass.
• Ralph Baric And UNC's Biodefense Contract Racket Exposed.
• Billionaire Democrat Donor Who Bankrolled Swalwell Breaks Silence After Surprise Arrest.
• Warren Whines As Senate Banking Committee Advances Crypto CLARITY Act, Two Democrats Break Ranks.
• Communist Mamdani's Latest Redistribution Scheme: Tax On All New York Homes Over $1 Million Bought With Cash.
• BREAKING: Disgraced former FBI Director James Comey claims that the FBI is "under seige" and admits that he is still having active conversations with personnel within the FBI. Kasie Hunt: "Do you still talk to employees at the FBI regularly?" Comey: "I do... They're under siege." Why is an indicted man still in contact with the very same people who could be tasked with investigating him? (video)
• Murders Down Roughly 20% In 2025, FBI Preliminary Data Show.
• Bad Signs: Christopher Nolan's "The Odyssey" Looks Like A Woke Disaster.
• Minnesota 'Culture Of Fraud' Enabled More Than $9 Billion In Misused Taxpayer Funds, Panel Says.
• Maybe time for someone to actually look into this: Ukraine Billionaire Spends $554 Million For World's Most Expensive Apartment In Monte Carlo. 
• Trump's Beijing Trip Triggers Bid For Big-Tech, Bitcoin, Black Gold, & The Buck.   

• @CNBC

• Asia markets mostly set to rise as investors watch second day of Trump-Xi summit.
• Friday's big stock stories: What’s likely to move the market in the next trading session.
• Stock futures are little changed after Dow retakes 50,000: Live updates.
• SpaceX IPO prospectus could land as soon as next week, sources say.   

• @TheTranscript 

• Applied Materials CEO: "Applied Materials delivered record quarterly performance & we now expect our semiconductor equipment business to grow more than 30 percent in calendar 2026." CFO: "The growth in AI that Applied has been investing for is now in full force."
  $AMAT: +4% AH.

• @WallStEngine

• $AMAT Q2'26 EARNINGS HIGHLIGHTS. Revenue: $7.91B (Est $7.68B) ; +11% YoY. Adj. EPS: $2.86 (Est $2.68) ; +20% YoY. Non-GAAP Gross Margin: 50.0%. Non-GAAP Operating Margin: 32.1%. Semiconductor Systems Revenue: $5.97B. Q3 FY26 Guide: Revenue: $8.45B-$9.45B (Est $8.15B). Adj. EPS: $3.16-$3.56 (Est $2.90). Segment Performance:

• @ShadowofEzra

• U.S. Ambassador Mike Waltz announces that $1.8 billion of U.S. taxpayer money will be sent to the United Nations to fund emergency humanitarian assistance. This comes on top of the $2 billion already pledged in December 2025. They told us USAID was dismantled to cut waste and put America First, yet now billions are being pledged to the failed United Nations. (video)

• @EricLDaugh

• BREAKING: The US Supreme Court has ruled 9-0 that freight brokers can be held LIABLE if they negligently hire unsafe trucking companies — including those with ILLEGAL ALIEN and FOREIGN drivers who violate CDL rules and cause accidents.

• @ScottPresler

• WE DON’T HAVE THE VOTES: Senate Majority Leader Thune said they had a spirited debate on the SAVE America Act. No, this is a fabrication — not once did he force democrats to speak against voter ID!! Thune said they don’t have the votes to nuke the filibuster. If Leader Thune won’t give us the SAVE America Act, then DEFEAT his top 2 allies — Cassidy & Cornyn. Louisiana: Sat., May 16th. Texas: Tues., May 26th. (video)

• @nicksortor

• Former CIA officer John Kiriakou says CIA whistleblower James Erdman III, who EXPOSED Fauci today, will likely be forced out of government and BLACKLISTED. This man is a HERO. Erdman is a CURRENT CIA officer, and per Kirakou, "will probably never work in government again because of it". The whistleblower confirmed Fauci PERSONALLY intervened in the intelligence agencies when they were set to release their belief COVID originated from a lab leak. Godspeed, brave patriot. (video)

• @GeneralMCNews

• BREAKING: Thomas Massie moves to finish what John F. Kennedy started, introducing a bill requiring AIPAC to register under the Foreign Agents Registration Act.

• @OcrazioCornPop

• RINO BRIAN KEMP DELAYS REDISTRICTING UNTIL 2028: Georgia could FLIP 2 MORE SEATS RED for an 11R-3D map THIS YEAR, but RINO Brian Kemp is DELAYING redistricting 2 FULL YEARS until 2028, letting Democrats keep their stolen seats.

Night Trading 

• Asian equity indices are -1.25% to -.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 72.75 +.5 basis point. 
• China Sovereign CDS 41.5 unch.
• China Iron Ore Spot 109.6 USD/Metric Tonne -1.0%. 
• Crude Oil 102.7/bbl. +1.5% 
• Gold 4,616.8 USD/t oz. -1.5%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.66 -.01%.
• Bloomberg Emerging Markets Currency Index 35.35 -.21%.
• Bloomberg Global Risk-On/Risk Off Index 122.1 unch.
• US 10-Year Yield 4.51% +3.0 basis points.
• Japan 30-Year Yield 3.97% +7.0 basis points. 
• Volatility Index(VIX) futures 20.7 +.8%.
• Euro Stoxx 50 futures -1.0%. 
• S&P 500 futures -.30%.
• NASDAQ 100 futures -.45%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by metals & mining and real estate 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 Rising into Final Hour on Mideast War Resolution Hopes, De-Escalating US/China Trade Tensions, US Economic Optimism, Tech/Transport Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 53.0 -.2%
• BofA Private Credit Proxy Index 74.0 +1.0% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .23 -1.0 basis point
• BofA Global Financial Stress Indicator -.14 -1.0 basis point
• European Financial Sector CDS Index 59.1 -1.4%
• Emerging Market CDS Index 156.9 -.1%
• Israel Sovereign CDS 60.0 -3.9% 
• Bloomberg Global Trade Policy Uncertainty Index .7 unch.
• US Morning Consult Daily Consume Sentiment Index 86.8 -2.3

• Citi US Economic Surprise Index 38.5 -2.0

• Citi Eurozone Economic Surprise Index -53.7 +.4

• Citi Emerging Markets Economic Surprise Index 43.5 -6.1
• S&P 500 Current Quarter EPS Growth Rate YoY(453 of 500 reporting) +25.1% -.1 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 353.91 -.37:  Growth Rate +27.7% -.1 percentage point, P/E 21.2 +.2
• S&P 500 Current Year Estimated Profit Margin 15.36% -6.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +62.1% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 858.35 +1.70: Growth Rate +116.8% +.4 percentage point, P/E 20.5 +.2 
• Bloomberg US Financial Conditions Index 1.02 +1.0 basis point
• US Yield Curve 46.75 basis points (2s/10s) -2.5 basis points
• Bloomberg Industrial Metal Index 188.2 -.3%
• Dutch TTF Nat Gas(European benchmark) 47.8 euros/megawatt-hour +1.9%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 15.6% +.7 percentage point
• US Atlanta Fed GDPNow Q2 Forecast +4.0% +.3 percentage point
• US 10-Year T-Note Yield 4.46% -1.0 basis point
• 1-Year TIPS Spread 3.14 -7.0 basis points

• Highest target rate probability for July 29th FOMC meeting: 95.3% (-3.7 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 85.4%(-5.1 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +380 open in Japan 
• China A50 Futures: Indicating -4 open in China

• DAX Futures: Indicating -38 open in Germany

Portfolio:

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

Bear Radar

Style Underperformer:

• Large-Cap Value +.3%

Sector Underperformers:

• 1) Gold & Silver -1.9% 2) Nuclear -1.2% 3) Social Media -1.0%

Stocks Falling on Unusual Volume: 

• KEP, RGEN, GOOS, STN, MP, MFC, NTLA, JKHY, BIIB, KRNT, KC, QUIK, PSIX, EQPT, WBTN, LIFE, VNET, BETA, BILI, ALHC, OMER, RXO, PBH, CSIQ, LGN, PDFS, DXYZ, BTGO, GSIT, CRVS, ALMU, LWLG, RVI, MEI and DOCS

Stocks With Unusual Put Option Activity:

• 1) DOCS 2) AS 3) TMC 4) INOD 5) SATS

Stocks With Most Negative News Mentions:

• 1) CSIQ 2) RXO 3) KROS 4) PYXS 5) INVZ

Sector ETFs With Most Negative Money Flow:

• 1) XLI 2) SMH 3) XLF 4) XRT 5) IGV

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.2%

Sector Outperformers:

• 1) Cyber Security +2.9% 2) Networking +2.7% 3) Road & Rail +2.0%

Stocks Rising on Unusual Volume:

• POET, ONDS, RDW, PCT, ARX, BRUN, PLGO, KLAR, CPA, AMRC, ENPH, UMAC, CSCO, KNX, PLSE, LUMN, SAIL, SNDR, NVMI, ADUR, ASTS, STAA, FPS, QUBT, DIN, FIGR, EXTR, VSNT, SEPN, NBIS, UMC, CLPT, WERN, WYFI, VIK, F, COIN, WYFI, TFII, WOLF, BN, TTWO, CLBT, FLY, ALGT, EYE, ZVRA, RKLB, JBHT, APP, ASYS, VOYG, RGTI, ASST, FIG, BL, HMC, SHAZ, DRTS, NEXA, IREN, HPE, ELVA, ZBRA, ODFL, CELH, BCC, AIP, WK, GMTL, RLI, AEVA, ARMK, TSM, ARCB, SN, INFQ, HSIC, CRBG, NOW, ANET, NVTS, HSIC, MARA, DT, LBRDK, TSLX, RDY, CHTR, NVDA, CORZ, MELI, MRTN, QXO, AEIS, BKSY, UTI, DOX, INR, PAHC and CIFR

Stocks With Unusual Call Option Activity:

• 1) XLB 2) BILI 3) UNIT 4) BN 5) COPX 

Stocks With Most Positive News Mentions:

• 1) CSCO 2) POET 3) STUB 4) PGEN 5) KLAR

Sector ETFs With Most Positive Money Flow:

• 1) DRAM 2) ARKK 3) XLV 4) BAI 5) NASA

Charts:

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