Stocks Rising into Final Hour on Lower Long-Term Rates, Oil Decline, Bargain-Hunting, Tech/Financial Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.7 -1.1%
• BofA Private Credit Proxy Index 68.54 -.9% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .28 +2.0 basis points
• BofA Global Financial Stress Indicator -.19 +5.0 basis points
• European Financial Sector CDS Index 54.10 -1.7%
• Emerging Market CDS Index 140.40 -1.4%
• Israel Sovereign CDS 57.5 +.6% 
• Bloomberg Global Trade Policy Uncertainty Index .5 unch.
• US Morning Consult Daily Consume Sentiment Index 93.4 +2.1

• Citi US Economic Surprise Index 58.5 -.1

• Citi Eurozone Economic Surprise Index 3.6 +.5

• Citi Emerging Markets Economic Surprise Index 34.7 -1.4
• S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +148.4% -26.0 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 372.58 +.02:  Growth Rate +26.6% -.1 percentage point, P/E 20.2 +.2
• S&P 500 Current Year Estimated Profit Margin 15.63% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +1,226.6% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 897.75 +.29: Growth Rate +73.1% unch., P/E 19.3 +.2 
• Bloomberg US Financial Conditions Index 1.19 -1.0 basis point
• US Yield Curve 37.75 basis points (2s/10s) +1.5 basis points
• Bloomberg Industrial Metal Index 173.7 +2.3%
• Dutch TTF Nat Gas(European benchmark) 49.3 euros/megawatt-hour +.6%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.8% -.3 percentage point
• US Atlanta Fed GDPNow Q2 Forecast +1.3% unch.
• US 10-Year T-Note Yield 4.54% -4.0 basis points
• 1-Year TIPS Spread 1.44 -9.0 basis points

• Highest target rate probability for September 29th FOMC meeting: 49.9% (-.7 percentage point) chance of 3.75%-4.0%. Highest target rate probability for Oct. 28th meeting: 47.3%(+.9 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +1,330 open in Japan 
• China A50 Futures: Indicating -190 open in China
• KOSPI 200 Futures: Indicating +67 open in South Korea 

• DAX Futures: Indicating +110 open in Germany

Portfolio:

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

Bear Radar

Style Underperformer:

• Large-Cap Value +.4%

Sector Underperformers:

• 1) Shipping -2.5% 2) Computer Services -1.9% 3) Oil Service -1.5%

Stocks Falling on Unusual Volume: 

• COST, AZN, ROAD, EPAC, MDA, LE, GVA and IONS

Stocks With Unusual Put Option Activity:

• 1) IYR 2) RARE 3) SNDQ 4) BNY 5) PENG

Stocks With Most Negative News Mentions:

• 1) IONS 2) PEP 3) GVA 4) COST 5) AVAV

Sector ETFs With Most Negative Money Flow:

• 1) KRE 2) ITB 3) XLY 4) XLC 5) KBE

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.9%

Sector Outperformers:

• 1) Lithography/Photonics +5.3% 2) Computer Hardware +4.7% 3) AI Innovation +4.4%

Stocks Rising on Unusual Volume:

• FBRX, LASR, BBIO, HELE, CNMD, NGNE, MARA, ONTO, PENG, QGEN, RIVN, BAND, SAH, SYNA, GTLB, WYFI, UCTT, INBX, BLZE, XP, ALHC, GH, EIKN, TBBK, CCXI, PSNL, ERIC, SYF, SLM, ALNT, SUNB, AMAT, ITT, AAL, TFIN, MGNI, INMD, MLTX, DAKT, LOGI, PRLB, FCEL, CMCL, GFI, SEPN, SHAZ and DRD

Stocks With Unusual Call Option Activity:

• 1) TD 2) ACI 3) LEVI 4) AS 5) NTAP 

Stocks With Most Positive News Mentions:

• 1) AEHR 2) LRCX 3) MU 4) LITE 5) QGEN

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) BAI 3) RAAX 4) DRAM 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:

• (DAL)/1.49

After the Close: 

• None of note

Economic Releases 

• None of note 

Upcoming Splits

• None of note

Other Potential Market Movers

• The IEA Monthly report, weekly US Baker Hughes rig count, weekly CFTC speculative net positioning reports and the WASDE report could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Afternoon Market Internals

NYSE Composite Index:

• Volume Running -22.6% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.0 +1.1
• 6 Sectors Rising, 5 Sectors Declining
• 63.6% of Issues Advancing, 34.8% Declining 
• TRIN/Arms 1.25 +45.4%
• Non-Block Money Flow +$156.1M
  
• 43 New 52-Week Highs, 21 New Lows
• 56.6% (+1.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 59.3 +2.5

Polymarket: 

• Will China invade Taiwan by end of 2026? 4.0% unch.
• Strait of Hormuz traffic returns to normal by July 31st 5.0% unch.
• Iran agrees to end enrichment of uranium by July 31st 2.0% unch.
• Israel withdraws from Lebanon by July 31st 1.0% unch.
• US Invades Iran before 2027 16.0% +1.0 percentage point

Other:

• Bloomberg Global Risk-On/Risk-Off Index 126.7 +.8%
• Global Monitor Iran Instability Index 64.0 +6.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 66.0% unch.
• US High-Yield Tech Sector OAS Index 449.0 -.75 basis point
• Bloomberg Cyclicals/Defensives Index 262.5 +1.3%
• Morgan Stanley Growth vs Value Index 161.7 +1.4%
• CNN Fear & Greed Index 48.0 (Moved to NEUTRAL from FEAR) +6.0
• 1-Day Vix 9.48 -25.3%
• Vix 15.99 -5.4%
  
• Total Put/Call .79 -12.2%

Thursday Watch

Around X:

• @Business  

• The US military said it’s striking Iran for the second straight day, an escalation of violence that threatens to strain an already fragile ceasefire. 
• The prospect of trillions of dollars of government spending that has rattled Japan’s bond and currency markets has yet to change views at Moody’s Ratings, at least for now.
• South Korea’s growth outlook received the biggest upgrade among the world’s 30 major economies in the IMF’s latest projections.
• Donald Trump said a decision on US troop levels in Europe would hinge on how allies addressed his concerns over Greenland and the Iran war.
• SK Hynix’s US listing is more than seven times oversubscribed, according to people familiar with the matter, as the South Korean memory chipmaker prepares to price its offering Thursday. 
• Mini mania is sweeping through US retailers as shoppers on a budget love colorful, charming, tiny versions of common products.
• Here’s the latest news and analysis on the oil market. 
• Get up to speed on what's moving global markets.
• Here’s what you need to know to start your day.    

• @ZeroHedge

• Iran Hits Back, Launching Missiles On Bahrain, Kuwait, Qatar - Ignoring Trump's Warning Of "Much Worse" Bombing. 
• Current State Of Physical AI: Everything You Need To Know. 
• Kuwaiti army says air defenses are currently intercepting missile attacks and hostile drones. 
• Canada Considered Suing Citizens Over "False And Misleading" Social Media Posts. 
• *US: GERMANY, NETHERLANDS WILL BUY RAYTHEON’S STINGER MISSILE. *US: BOEING AND RHEINMETALL-ITALY WILL EXPLORE PARTNERSHIP. *US: ANDURIL TO COMMIT TO POLAND WITH BARRACUDA-500 MISSILES. 
• DOJ Warns State Election Officials Can Be Charged Over Noncitizen Voting.
• South Korean brokerages are aggressively raising margin requirements for major equities, including Samsung Electronics and SK Hynix. By increasing these rates — with some speculative stocks raised to 100% — firms aim to curb high-leverage trading and proactively mitigate the risk of forced liquidations during market downturns.
• Quant Funds Hammered With Biggest Drawdown Since August 2025.
• *BAIN CAPITAL EXITED FLASH MEMORY MAKER KIOXIA, EXECUTIVE SAYS.
• Modular Reactors To Solve Data Center Hysteria?
• After Tonight's Strikes, Trump Threatens "Much Worse" Bombing If Iran Doesn't Stop Attacks.
• Dear Trump: Time To Flood America's Weigh Stations With ICE And CBP Agents.
• Larges fires burn in the Iranian port city of Bushehr, on the coast of the Persian Gulf, following renewed U.S. strikes against military targets in Southern Iran.
• *HARLEY-DAVIDSON CUT TO JUNK BY S&P, OUTLOOK STABLE.
• Video footage shows the moment that U.S. strikes targeted Chabahar City in Southern Iran earlier tonight, with the strikes reportedly impacting an air and naval base operated by Iran’s Islamic Revolutionary Guard Corps (IRGC).
• Waymo Robotaxi "Snitches" On Two 15-Year-Olds Drinking & Shooting Orbeez Guns In Bay Area.
• Announcing Grok 4.5, our first model trained specifically for coding and agents. It was trained with Cursor and offers frontier intelligence at leading speeds and cost efficiency.
• U.S. strikes targeted a base operated by Iran’s Islamic Revolutionary Guard Corps (IRGC) in the Southern Iranian city of Bushehr, on the coast of the Persian Gulf.
• Socialism Is Targeting The Foundations That Made America Great.
• Why are car prices so high? The average amount financed by new car loans just hit a record high $42,504. 
• Momo 'Meh' As Mideast Melee Spikes Oil, Bitcoin Bad But Big-Tech & Bonds Bounce.                                     

• @CNBC

• Stock futures slip after U.S. initiates another round of attacks against Iran: Live updates.  
• CNBC Daily Open: Trump turns up the heat on allies and adversaries.
• Thursday's big stock stories: What’s likely to move the market in the next trading session.  

Night Trading 

• Asian equity indices are +.25% to +1.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 69.50 +.75 basis point. 
• China Sovereign CDS 37.0 +.25 basis point.
• China Iron Ore Spot 98.80 USD/Metric Tonne -.23%. 
• Crude Oil 74.14/bbl. +.83% 
• Gold 4,081.20 USD/t oz. +.01%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.42 +.05%.
• Bloomberg Emerging Markets Currency Index 34.66 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 127.0 +1.1%.
• US 10-Year Yield 4.58% unch.
• Japan 30-Year Yield 4.04% +3.0 basis points. 
• Volatility Index(VIX) futures 18.9 -.02%.
• Euro Stoxx 50 futures +1.1%. 
• S&P 500 futures +.07%.
• NASDAQ 100 futures +.11%.

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 50% net long heading into the day.