Stocks Rising into Final Hour on Plunging Inflation Expectations, Lower Long-Term Rates, Earnings Outlook Optimism, Tech/Alt Energy Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 51.7 -.6%
• BofA Private Credit Proxy Index 70.34 +1.1% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .30 +2.0 basis points
• BofA Global Financial Stress Indicator -.16 +4.0 basis points
• European Financial Sector CDS Index 55.1 +.6%
• Emerging Market CDS Index 142.0 -.3%
• Israel Sovereign CDS 61.5 +3.4% 
• Bloomberg Global Trade Policy Uncertainty Index .5 -.1
• US Morning Consult Daily Consume Sentiment Index 89.0 +.1

• Citi US Economic Surprise Index 46.7 -8.3

• Citi Eurozone Economic Surprise Index 6.3 +.7

• Citi Emerging Markets Economic Surprise Index 36.1 +2.1
• S&P 500 Current Quarter EPS Growth Rate YoY(23 of 500 reporting) +136.8% -58.8 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 373.55 +.11:  Growth Rate +26.9% unch., P/E 20.2 -.1
• 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 903.15 +5.40: Growth Rate +74.2% +.2 percentage point, P/E 19.4 unch. 
• Bloomberg US Financial Conditions Index 1.16 -8.0 basis points
• US Yield Curve 39.0 basis points (2s/10s) +4.25 basis points
• Bloomberg Industrial Metal Index 174.51 +.8%
• Dutch TTF Nat Gas(European benchmark) 54.30 euros/megawatt-hour +5.9%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 13.7% -.3 percentage point
• US Atlanta Fed GDPNow Q2 Forecast +1.3% unch.
• US 10-Year T-Note Yield 4.58% -5.0 basis points
• 1-Year TIPS Spread 1.11 -30.0 basis points

• Highest target rate probability for September 29th FOMC meeting: 50.0% (-1.2 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Oct. 28th meeting: 48.4%(+4.8 percentage points) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +410 open in Japan 
• China A50 Futures: Indicating -250 open in China
• KOSPI 200 Futures: Indicating +163 open in South Korea 

• DAX Futures: Indicating +25 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/financial sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value -.4%

Sector Underperformers:

• 1) Computer Services -21.3% 2) Medical Equipment -4.0% 3) Gambling -2.6%

Stocks Falling on Unusual Volume: 

• FAST, WFC, WBTN, CSGP, C, TARS, PSO, ISRG, SHOE, BIIB, THC, GEHC, HCA, WULF, QTTB, TDC, DNLI, WYFI, ERIC and IBM

Stocks With Unusual Put Option Activity:

• 1) LCID 2) OMER 3) NXE 4) IBM 5) DLR

Stocks With Most Negative News Mentions:

• 1) LCID 2) IBM 3) NOW 4) CTEV 5) LRN

Sector ETFs With Most Negative Money Flow:

• 1) ARKK 2) JTEK 3) KRE 4) XLP 5) KBE

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.6%

Sector Outperformers:

• 1) Semis +3.4% 2) Shipping +3.3% 3) AI Innovation +3.1%

Stocks Rising on Unusual Volume:

• PRE, TSEM, FCEL, BMNR, CLSK, NTSK, CAMT, OKTA, CCXI, ENLT, SAIL, RPD, GS, ERAS, TENB, SYRE, OPRA, VRNS, MDA, PBF, TATT, BELFB, MEOH, VCTR, FIG, SHAZ, PLTR, REZI, ECO, ASML, RIO, UBS, IMCR, SOLS, LPX, TIMB, FBK and DX

Stocks With Unusual Call Option Activity:

• 1) EQPT 2) CC 3) NBIG 4) SGI 5) GFI 

Stocks With Most Positive News Mentions:

• 1) AIRO 2) CRWD 3) TSEM 4) GS 5) CLSK

Sector ETFs With Most Positive Money Flow:

• 1) SOXX 2) XOP 3) XLC 4) IBB 5) XLY

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:

• (ASML)/7.92
• (BLK)/12.68
• (BNY)/2.23
• (CTAS)/1.24
• (CAG)/.46
• (ELV)/6.21
• (FHN)/.52
• (JNJ)/2.85
• (MTB)/4.66
• (MS)/2.93
• (PNC)/4.46
• (PGR)/4.75 

After the Close: 

• (JBHT)/1.73
• (UAL)/1.88 

Economic Releases 

 

8:30 am EST

• Empire Manufacturing for July is estimated to rise to 9.2 versus 5.7 in June.
• PPI Final Demand MoM for June is estimated unch. versus a +1.1% gain in May.
• PPI Ex Food and Energy MoM for June is estimated to rise +.3% versus a +.4% gain in May. 

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,594,400 barrels versus a +2,998,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,066,600 barrels versus a -1,904,000 barrel decline the prior week. Distillate inventories are estimated to fall by -996,800 barrels versus a -4,980,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.01% versus a -.8% decline prior.

2:00 pm EST

• Fed releases Beige Book report. 

Upcoming Splits

• (SNEX) 3-for-2

Other Potential Market Movers

• The Fed Chairman Warsh's testimony to Senate, Fed's Cook speaking, Fed's Williams speaking, weekly MBA Mortgage Applications report and the B.Riley Mind/Muscle/Vision Summit 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 -11.7% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.9 +.1
• 5 Sectors Rising, 6 Sectors Declining
• 58.6% of Issues Advancing, 38.7% Declining 
• TRIN/Arms 1.44 +114.9%
• Non-Block Money Flow +$75.8M
  
• 89 New 52-Week Highs, 24 New Lows
• 58.0% (+.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 57.2 -1.7

Polymarket: 

• Will China invade Taiwan by end of 2026? 4.0% unch.
• Strait of Hormuz traffic returns to normal by July 31st 2.0% -2.0 percentage points
• 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 20.0% unch.

Other:

• Bloomberg Global Risk-On/Risk-Off Index 126.3 +.4%
• Global Monitor Iran Instability Index 56.0 +6.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 75.0% -13.0 percentage points
• US High-Yield Tech Sector OAS Index 456.0 +17.0 basis points
• Bloomberg Cyclicals/Defensives Index 261.6 +.6%
• Morgan Stanley Growth vs Value Index 158.0 +1.3%
• CNN Fear & Greed Index 43.0 (Moved to FEAR from NEUTRAL) unch.
• 1-Day Vix 9.5 -35.0%
• Vix 16.5 -4.0%
  
• Total Put/Call .87 -4.4%

Tuesday Watch

Around X:

• @Business  

• A new breed of leveraged products tracking major South Korean chip stocks are tumbling in value, threatening steep losses for the country’s retail investors who favor the tools to pursue amplified returns.   
• Bond traders ramped up bets for a July interest-rate hike ahead of US inflation data and an appearance by the head of the Federal Reserve that stand to reinforce the need for action.
• America appears to be suffering from a fun shortage. From the rising cost of concert tickets, to bowling alley and nightclub closures, to venue shortages for kids to play in local sports leagues, the fun deficit is real and it's making Americans more isolated and lonelier than previous generations. (video)  
• Here’s the latest news and analysis on the oil market. 
• Here's what's moving markets.
• Here’s what you need to know to start your day.  

• @ZeroHedge

• TRUMP FORMALLY NOTIFIES CONGRESS WAR HAS RESUMED. 
• War Returns: Pentagon Initiates 3rd Consecutive Night Of Iran Strikes As IRGC Targets More Vessels In Hormuz. 
• *BRENT OIL RISES TO $85/BARREL AS TRUMP REINSTATES IRAN BLOCKADE.
• The Latest Model Cars: Big Brother Is Watching You.
• Hyperscaler basket G spread crosses 150bps for the first time ever.
• On Friday, President Trump spoke by phone with the Saudi crown prince, per a U.S. official. MBS asked Trump for his backing for a military action against the Houthis and received it, the U.S. official told me.   
• These Are America's Most (And Least) Dangerous States.
• South Carolina's Governor Appoints Lindsey Graham's Sister To Fill His Senate Seat.
• True. As a precautionary measure, all user data that was uploaded to SpaceXAI before now will be completely and utterly deleted. Zero anything whatsoever will remain. -@elonmusk.
• Today's hawkish speech by Waller (who was much more dovish when he was in the running to be Fed chair), repriced rate hike odds significantly higher both on Polymarket and SOFR futs.
• China Builds Full-Scale Model Of US Destroyer In Remote Desert.
• *UAE SAYS ATTACK KILLED ONE CREW MEMBER, INJURED 8. *UAE SAYS TANKERS WERE HIT IN SOUTHERN PATHWAY OF HORMUZ STRAIT.
• 28.8 Million Queries: The AI Heist That Tripped No Alarms.
• While The Political Circus Distracts Us, Flock Builds The Digital Police State.
• China's Memory-Chip Challenger Faces A Test Of How Far US Curbs Can Reach.
• *IRAN ARMY SAYS IT TARGETS US ASSETS, VESSEL: FARS.
• Mind Control: Duncan Trussell On How Social Media Algorithms Weaponize Trauma.
• US Officials Say Iran's Ahmadinejad Was Mossad Asset, Met With Intel Chief In Hungary.
• Trump Will Hit Iran 'Hard' Tonight Or Tomorrow As IRGC Targets More Vessels In Hormuz.
• Trump-Tehran Tensions Spike Oil; Waller Whacks Bonds & Bullion; Semis Slammed Amid AI Angst.                                   

• @CNBC

• CNBC Daily Open: Hormuz toll threats, Mideast tensions keep investors on edge. 
• Tuesday's big stock stories: What’s likely to move the market in the next trading session.   
• Stock futures are little changed as Middle East tensions escalate; traders await earnings and inflation data: Live updates.  
• Trump's Hormuz toll plans bring oil supply risks back in spotlight. 
• Inflation reports expected to show improvement with a caveat; Warsh heads to Capitol Hill. 

• @MarioNawful

• BREAKING: Trump wants the Gulf to PAY America's war bill: "I wanna be reimbursed." "I wanna be reimbursed. Because we're protecting a very rich portion of the world. We're spending money. And so what we've done is we are going to be reimbursed for protection. We're protecting by the countries that we're helping.".

• @MJTruthUltra

• Not an accusation.. just food for thought. In 1975, congressional hearings revealed that the CIA had developed a secret “heart attack gun.” The weapon could silently fire a tiny, toxin-laced dart up to 100 yards or more, striking the target without their knowledge. The poison was designed to dissipate quickly and leave no trace in standard toxicology reports—ensuring complete plausible deniability. That was 50+ years ago it was admitted.. what do they have now? (video)

• @LaraLogan

• Who remembers when Lindsey Graham’s best friend, John McCain, took the fake Steele dossier to the FBI as part of the seditious conspiracy to overthrow Pres Donald Trump? (pic)

• @nicksortor

• JUST IN: President Trump will announce that BOTH of Georgia’s Democrat US Senators are “ILLEGITIMATE” due to election fraud, per @DC_Reporter. This comes after FBI and other federal agencies RAIDED election offices in Georgia recently. EXPOSE IT ALL! John Ossoff and Raphael Warnock’s days in the Senate might be numbered. (video)

• @joekent16jan19

• This week the Senate will vote to merge our military’s most sensitive & secretive capabilities with Israel. This merger is buried within the massive NDAA and they’re hoping you won’t notice. Merging our military with a foreign country is a treasonous betrayal of our sovereignty. Call your senators & tell them to vote no on the NDAA until the merger w/ Israel (section 219) is taken out. Tell them that we will never support merging our military with a foreign nation. The senate switchboard number is: (202) 224-3121.

• @HealthRanger

• This seems pretty crazy: Just handing over a U.S. Senate seat to a completely unqualified SISTER of the senator who just died? Shouldn't voters have a say in this? Or are we back to "royal bloodlines" now?

• @ScottPresler

• If our Senate has no intention of securing our elections, it’s time to declare our fraudulent elections a “National Emergency.”

• @AnnCoulter

• Trump swore he "would not sign" the housing bill. He let it pass anyway. Inside it: a Section 8 expansion — better zip codes for the next Michael Brown. Yours, for instance. Guess who's made millions off Section 8 housing? Jared Kushner. (video)

• @PoliticalStacy

• For those wondering... Why the vague updates and slow-walking on Mitch McConnell’s condition? There was an election law change in Kentucky in 2024. Passed by the Republican legislature and signed by Democrat Gov. Andy Beshear for a reason. If McConnell's seat opens up before Aug 3, they have to hold a special election. After Aug 3? The seat sits empty for months until January 2027, essentially handing Democrats a free vote in the Senate. They’re not rushing transparency because timing is everything. The Uniparty Swamp protects its own, even when they’re incapacitated. Term limits now.

Night Trading 

• Asian equity indices are -1.5% to -.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 70.25 +1.25 basis points. 
• China Sovereign CDS 37.0 +.25 basis point.
• China Iron Ore Spot 99.5 USD/Metric Tonne +1.0%. 
• Crude Oil 79.36/bbl. +1.6% 
• Gold 4,018.10 USD/t oz. +.3%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.34 -.14%.
• Bloomberg Emerging Markets Currency Index 34.62 unch.
• Bloomberg Global Risk-On/Risk Off Index 125.4 -.4%.
• US 10-Year Yield 4.62% unch.
• Japan 30-Year Yield 3.86% -5.0 basis points. 
• Volatility Index(VIX) futures 18.9 +.9%.
• Euro Stoxx 50 futures -.86%. 
• S&P 500 futures -.19%.
• NASDAQ 100 futures -.11%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the day.