Stocks Surging into Afternoon on Earnings Outlook Optimism, AI Infrastructure Build-Out, Yen Weakness, Tech/Consumer Discretionary Sector Strength

Overseas Futures:

• Nikkei 225 Futures: Indicating +1,182 open in Japan 
• China A50 Futures: Indicating -32 open in China

• DAX Futures: Indicating +26 open in Germany

Portfolio:

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

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

Earnings of Note 
Company/Estimate 

Before the Open:

• None of note

After the Close: 

• None of note

Economic Releases 

• None of note

Upcoming Splits

• None of note

Other Potential Market Movers

• The weekly CFTC speculative net positioning report, Northland Equity Growth Conference, (CAVA) annual meeting and the RTX AI PC Partner Summit could also impact global trading on Monday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Thursday Watch

Around X:

• @Business  

• President Donald Trump signed an interim deal to end the war with Iran and reopen the Strait of Hormuz. Trump told reporters he signed the document at the palace of Versailles. 
• Strategists say markets are on watch for yen intervention after the Fed took a hawkish stance at Kevin Warsh’s debut meeting, triggering a drop in the currency to levels that have previously prompted Japan’s finance ministry to step in.
• Kevin Warsh began his tenure as chairman of the Fed with a solemn vow to curb inflation and a clear sign that he plans to swiftly revamp how the US central bank does its job. 
• Polymarket’s geopolitics category has become one of the platform’s fastest-growing markets. A few well-timed and profitable bets on Iran war policy have sparked new fears of insider trading.
• FOMC officials agreed to hold interest rates steady, but they apparently aren't in sync on using the dot plot. 
• The dollar surged the most in three months after Federal Reserve officials signaled growing support for interest-rate hikes this year. 
• Get up to speed on what's moving global markets.
• Here’s what you need to know to start your day.  

• @ZeroHedge

• Trump And Iran Sign MOU Deal Ahead Of Schedule. 
• *IRAN: US RESPONSIBLE TO FORCE ISRAEL TO ABIDE BY DEAL. 
• Iran's parliament speaker says that the Strait of Hormuz will never return to the pre-war situation -Fars. Ghalibaf adds that Iran has the right to charge fees for transit. MoU says that Iran and Oman will discuss SoH arrangements. 
• South Korea's Nuclear Site Selection Committee announced domestic sites as candidates for new large-scale nuclear power plants and SMRs, marking the first time in 14 years that a new nuclear power plant candidate site has been chosen. Korea Hydro & Nuclear Power (KHNP) plans to complete the construction of one SMR by 2035, and the construction of the two large-scale nuclear power plants in 2037 and 2038, respectively. 
• Apple to hike iPhone prices ~20% to offset soaring memory and storage costs and keep margins constant. 
• Burry's NVDA puts. 
• From Diablo Canyon Closure Fights To Record-Speed Renewals: The Nuclear Reversal. 
• COVID Origins, Lab-Leak Accountability, And The Next Pandemic Threat. 
• Congress Moves To Boost Drone Funding As "War Unicorns" See Possible Procurement Supercycle. 
• Rare Earth Stocks Pop After G7 Unveils Plan To Reduce Dependence On China For Critical Minerals. 
• How Deep Are The Newsoms In It?
• Iran has now published its version of the US-Iran memorandum of understanding through the official IRNA news agency. The two texts are largely identical, but there are some differences in wording and emphasis:      
• These Are The States Starting To Panic About AI Taking Over.
• The turnover rate for demand deposits at S.Korean banks surged to a 10-year high as retail and corporate investors prioritize liquidity for tactical asset allocation: i.e. so investors can rapidly move money from banks into stocks: local press.
• "Zero Hormuz Dependency": UAE Races To Rewire Energy Flows, Bypassing Chokepoint Chaos.
• *APPLE TO RAISE PRICES DUE TO MEMORY CHIP CRUNCH: WSJ. *COOK: NEVER SEEN COMMODITY PRICE SWING LIKE PAST 6 MONTHS: WSJ.
• Trump Invokes Defense Production Act As US Moves To Rebuild Weapons Stockpiles.
• Of The Elite, By The Elite, For The Elite.
• 40% chance of a July hike. 
• Markets Manic, Oil Flat As 'Hawks' Trump & Warsh Dominate, Liquidity Plummets.                  

• @CNBC

• Thursday's big stock stories: What’s likely to move the market in the next trading session.
• CME CEO Terrence Duffy says the exchange operator will sue CFTC over perpetual futures.
• Stock futures tick higher after Fed's hint of possible rate hike in 2026 spurs a sell-off: Live updates.
• SpaceX adds longtime Elon Musk ally Roelof Botha to board.
• Analysis: Chairman Kevin Warsh’s task forces are the key to understanding the new Fed.
• Here are the five big takeaways from Kevin Warsh's first meeting as Fed chairman. 
• Jeffrey Gundlach says Fed's Warsh is not going to be the 'easy money' chairman many hoped for.          

Night Trading 

• Asian equity indices are -.25% to +.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 68.25 +.25 basis point. 
• China Sovereign CDS 39.0 unch.
• China Iron Ore Spot 98.85 USD/Metric Tonne -.3%. 
• Crude Oil 75.62/bbl. -1.5% 
• Gold 4,337.0 USD/t oz. -1.0%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.47 unch.
• Bloomberg Emerging Markets Currency Index 35.07 -.07%.
• Bloomberg Global Risk-On/Risk Off Index 120.35 +.2%.
• US 10-Year Yield 4.46% -3.0 basis points.
• Japan 30-Year Yield 3.76% +1.0 basis point. 
• Volatility Index(VIX) futures 18.8 -2.6%.
• Euro Stoxx 50 futures -.50%. 
• S&P 500 futures +.75%.
• NASDAQ 100 futures +1.25%.

Morning Preview Links

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

Stocks Reversing Lower into Final Hour on More Hawkish FOMC Commentary, Higher Long-Term Rates, Technical Selling, Consumer Discretionary/Regional Bank Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.5 +.4%
• BofA Private Credit Proxy Index 69.0 -1.8% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .23 -1.0 basis point
• BofA Global Financial Stress Indicator -.27 -4.0 basis points
• European Financial Sector CDS Index 54.4 +.6%
• Emerging Market CDS Index 141.9 -.3%
• Israel Sovereign CDS 51.6 +3.8% 
• Bloomberg Global Trade Policy Uncertainty Index .4 unch.
• US Morning Consult Daily Consume Sentiment Index 90.2 unch.

• Citi US Economic Surprise Index 49.7 +1.7

• Citi Eurozone Economic Surprise Index -26.8 +4.1

• Citi Emerging Markets Economic Surprise Index 39.4 +.7
• S&P 500 Current Quarter EPS Growth Rate YoY(4 of 500 reporting) +18.8% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 365.28 +.14:  Growth Rate +24.2% +.1 percentage point, P/E 20.6 -.1
• S&P 500 Current Year Estimated Profit Margin 15.52% +2.0 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 919.15 +.61: Growth Rate +77.2% +.1 percentage point, P/E 18.9 unch. 
• Bloomberg US Financial Conditions Index 1.15 -4.0 basis points
• US Yield Curve 28.5 basis points (2s/10s) -9.25 basis points
• Bloomberg Industrial Metal Index 182.0 +.3%
• Dutch TTF Nat Gas(European benchmark) 41.60 euros/megawatt-hour -.4%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.8% -.2 percentage point
• US Atlanta Fed GDPNow Q2 Forecast +3.0% +.2 percentage point
• US 10-Year T-Note Yield 4.48% +4.0 basis points
• 1-Year TIPS Spread 1.98 -6.0 basis points

• Highest target rate probability for July 29th FOMC meeting: 61.0% (-29.0 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 47.0%(+19.8 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +400 open in Japan 
• China A50 Futures: Indicating -195 open in China

• DAX Futures: Indicating -70 open in Germany

Portfolio:

• Higher: On gains in my tech/industrial/biotech sector longs, index hedges and emerging market shorts
• Disclosed Trades: None
• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -.3%

Sector Underperformers:

• 1) Gambling -2.7% 2) Computer Services -2.0% 3) Oil Service -1.9%

Stocks Falling on Unusual Volume: 

• FDP, ADPT, KR, MKTX, KNX, IRTC, CME, RDNT, SATS, KB, CNMD, CBOE, NDAQ and KMX

Stocks With Unusual Put Option Activity:

• 1) ACI 2) KMX 3) TEVA 4) APH 5) CORZ

Stocks With Most Negative News Mentions:

• 1) KMX 2) WGS 3) RGC 4) SRAD 5) REXR

Sector ETFs With Most Negative Money Flow:

• 1) NASA 2) ARKK 3) KRE 4) RAAX 5) XLE

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.7%

Sector Outperformers:

• 1) Semis +4.6% 2) AI Innovation +2.3% 3) Alt Energy +2.1%

Stocks Rising on Unusual Volume:

• QURE, BRAI, CLPT, HQ, LZB, ARQQ, WNC, SHAZ, WOLF, ALOY, HOOD, BHVN, NAVN, NNE, USAR, RARE, PZZA, HROW, NBIS, NTLA, FIG, FCEL, CAPR, LBRX, CHRN, AKTS, SEZL, CPNG, ARWR, CXT, BBAR, ACMR, GIL, SRPT, LBRX, PTCT, SRPT, WDC, MRVL, SE, DYN, AMAT, AMR, TRVI, ASTS, GGAL, KRYS, FMC, GEV, MFG, STRO, SUPV, ASML, TGTX, PTRN, ALGM, NU, TENX, CELH, LC, AVGO, DCTH, MPLT, JANX, VSH, EMBJ, CMI, NPKI, MTRN, KRMN, SOFI, XMTR, RTX, MDA, MH and SSRM

Stocks With Unusual Call Option Activity:

• 1) FEZ 2) BHVN 3) PROP 4) QURE 5) SRPT 

Stocks With Most Positive News Mentions:

• 1) QURE 2) ICCM 3) LZB 4) BTGO 5) HOOD

Sector ETFs With Most Positive Money Flow:

• 1) XLK 2) SMH 3) RSPT 4) XAR 5) KOMP

Charts: 

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