Thursday, August 06, 2026

Friday Watch

Around X:

  • @Business
  • @ZeroHedge
  • @TheTranscript
  • @WallStEngine
  • The economics on $AKAM’s large cloud deals are surprisingly strong for GPU infrastructure: > Take-or-pay commitments. > Mid-60s to mid-70s cash gross margins. > Low-20s to low-30s operating margins. Management says these economics generally apply across both signed deals and the active pipeline.
  • TRUMP SETS POLYSILICON TARIFFS AND PRICE FLOORS. President Trump signed a Section 232 action imposing a 15% ad valorem tariff on polysilicon derivative imports.
    $FSLR. The US will also set minimum import prices of $21 per kilogram for polysilicon and $100 per kilogram for polysilicon ingots and wafers. Polysilicon is a key material used in semiconductor manufacturing and solar panels. The measures are intended to support domestic production and reduce reliance on foreign supplies. 
  • CLOUDFLARE $NET Q2’26 EARNINGS HIGHLIGHTS. Revenue: $696.1M (Est. $666M) ; +36% YoY. Adj. EPS: $0.29 (Est. $0.27) ; +38% YoY. Oper Income: $96.1M (Est. $90.2M) ; +33% YoY. FCF: $56.4M (Est. $59.2M); +69% YoY. Raises FY26 Guide: Revenue: $2.86B-$2.87B (Est. $2.81B). Operating Income: $443M-$445M (Est. $419M). EPS: $1.25-$1.26 (Est. $1.20).  
  • AIRBNB $ABNB Q2’26 EARNINGS HIGHLIGHTS. Revenue: $3.6B (Est. $3.58B) ; +17% YoY. EPS: $1.37 (Est. $1.25) ; +33% YoY. Adj. EBITDA: $1.3B (Est. $1.23B) ; +21% YoY. Gross Booking Value (GBV): $27.2B (Est. $26.42B) ; +16% YoY. Raises FY26 Guide: Revenue Growth: At least mid teens. Adjusted EBITDA Margin: At least 35.5%. Effective Tax Rate: High teens
  • TWILIO $TWLO Q2’26 EARNINGS HIGHLIGHTS. Revenue: $1.5B (Est. $1.43B) ; +22% reported. Adj. EPS: $1.47 (Est. $1.32) ; +24% YoY. FCF: $352.6M (Est. $322M) ; +34% YoY. Raises FY26 Guide: Free Cash Flow: $1.1B-$1.2B (Est. $1.1B). Revenue Growth: +18%-+18.5%. Organic Revenue Growth: +13%-+13.5% YoY. Non-GAAP Op. Income: $1.1B-$1.2B. 
  • APPLIED OPTOELECTRONICS $AAOI Q2’26 EARNINGS HIGHLIGHTS. Revenue: $191.9M (Est. $190M) ; +86% YoY. Adj. EPS: $0.06 (Est. $0.01). Non-GAAP Net Income: $5.5M (Est. $1.7M). Q3 Guide: Revenue: $255M-$290M (Est. $278M) . EPS: $0.11-$0.26 (Est. $0.28). Net Income: $10.1M-$24.0M (Est. $25.2M). Non-GAAP Gross Margin: 29% to 30.5%
  • @MerengoFS 
Night Trading 
  • Asian equity indices are -.50% to +.25% on average. 
  • Asia Ex-Japan Investment Grade CDS Index 68.5 +.5 basis point. 
  • China Sovereign CDS 37.75 +.5 basis point.
  • China Iron Ore Spot 95.40 USD/Metric Tonne -.74%. 
  • Crude Oil 78.20/bbl. +1.1% 
  • Gold 4,310.90 USD/t oz. +.3%. 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.30 -.06%.
  • Bloomberg Emerging Markets Currency Index 34.47 -.02%.
  • Bloomberg Global Risk-On/Risk Off Index 126.0 +.1%.
  • US 10-Year Yield 4.68%  unch.
  • Japan 30-Year Yield 3.94% unch.
  • Volatility Index(VIX) futures 18.7 +.7%.
  • Euro Stoxx 50 futures -.21%. 
  • S&P 500 futures -.05%.
  • NASDAQ 100 futures +.07%.
Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by basic material 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 75% net long heading into the day.

Stocks Reversing Slightly Lower into Final Hour on Mideast War Resumption Fears, War-Induced Inflation Worries, Profit-Taking, Financial/Consumer Discretionary Sector Weakness

Economic/Market Gauges:

  • North American Investment Grade CDS Index 51.0 -.1%
  • BofA Private Credit Proxy Index 73.1 +4.1% 
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .28 unch.
  • BofA Global Financial Stress Indicator -.17 -3.0 basis points
  • European Financial Sector CDS Index 53.6 +.2%
  • Emerging Market CDS Index 141.4 +.5%
  • Israel Sovereign CDS 57.1 unch.
  • Bloomberg Global Trade Policy Uncertainty Index .7 +.1
  • US Morning Consult Daily Consume Sentiment Index 92.7 +.4
  • Citi US Economic Surprise Index 35.1 +1.6
  • Citi Eurozone Economic Surprise Index 68.3 +2.0
  • Citi Emerging Markets Economic Surprise Index 25.5 +.1
  • S&P 500 Current Quarter EPS Growth Rate YoY(428 of 500 reporting) +52.0% +.1 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 386.45 +.80:  Growth Rate +31.4% +.3 percentage point, P/E 19.9 -.2
  • S&P 500 Current Year Estimated Profit Margin 16.17% -2.0 basis  points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +138.4% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 940.40 +1.32: Growth Rate +81.3% unch., P/E 19.6 unch.
  • Bloomberg US Financial Conditions Index 1.24 +.0 basis points
  • US Yield Curve 42.5 basis points (2s/10s) -1.0 basis point
  • Bloomberg Industrial Metal Index 180.6 -.1%
  • Dutch TTF Nat Gas(European benchmark) 58.0 euros/megawatt-hour +10.6%
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 15.0% +.1 percentage point
  • US Atlanta Fed GDPNow Q3 Forecast +5.8% -.1 percentage point
  • US 10-Year T-Note Yield 4.66% +5.0 basis points
  • 1-Year TIPS Spread 1.65 +5.0 basis points
  • Highest target rate probability for Oct. 28th FOMC meeting: 52.8% (+.7 percentage point) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 42.3%(-2.2 percentage points) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +220 open in Japan 
  • China A50 Futures: Indicating -18 open in China
  • KOSPI 200 Futures: Indicating +16 open in South Korea 
  • DAX Futures: Indicating +125 open in Germany
Portfolio:
  • Higher: On gains in my tech/biotech sector longs, index hedges and emerging market shorts
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% net long

Bear Radar

Style Underperformer:

  • Mid-Cap Growth -.6%
Sector Underperformers:
  • 1) Software -2.3% 2) Airlines -2.3% 3) I-Banking -1.8%
Stocks Falling on Unusual Volume: 
  • USPH, MAC, OUT, CRUS, PRMB, DOCS, MELI, MUSA, TREE, XYZ, NKSI, FLNC, BOBS, HST, TS, TTD, MUR, LINC, ELAN, MAGN, GLF, BVS, Z, GOLF, DUOL, ZG, MIRM, OSCR, PRVA, WDC, CLS, BLBD, AXON, SYM, AGL, WD, KVYO, FIG, ENOV, EPAM, FUN, YSS, CMP, ROOT, VISN, GRAL, COLL, PZZA, BROS, CELH, CCOI, FOUR, DDOG, APP, BBSI, CLFD, HUBS, HONA, TRIP, UTI, ONT and BLLN
Stocks With Unusual Put Option Activity:
  • 1) WHR 2) PZZA 3) AIPO 4) EYPT 5) UAA
Stocks With Most Negative News Mentions:
  • 1) PZZA 2) CELH 3) WDC 4) APP 5) HUBS
Sector ETFs With Most Negative Money Flow:
  • 1) SOXX 2) XLK 3) IGV 4) XLF 5) VGT

Bull Radar

Style Outperformer:

  • Large-Cap Value -.2%
Sector Outperformers:
  • 1) Oil Service +3.3% 2) Video Gaming +2.7% 3) Space +2.0%
Stocks Rising on Unusual Volume:
  • INSM, PAYS, AEVA, CHYM, WPP, PAYC, CACI, MATV, ALNT, SITM, DCTH, CDRE, CAI, ZLAB, TPC, VAC, GCT, FTDR, MGNI, PRAX, TRUP, U, TIGO, SBGI, AVNT, SBGI, EHC, ATI, HRTG, HP, SDGR, DGII, MTSI, LCLN, RDW, AXTI, RMAX, VSNT, XE, ZVRA, DNOW, ORA, CNR, AMLX, OTF, LIFE, ELF, MSI, MSI, RELY, TSEM, ALB, JJSF, ECPG, TTMI, FSK, LBRX, PH, COLD, ALOY, CXW, USFD, DCO, NN, GOOD, SRPT, NBR, SHC, ITT, OCSL, DEO, AMR, VCTR, AMR, ECO, SEI, HELP, OXY, EYPT, BV, TARS, CWEN, VSEC, RL, MESO, VOD, AMPL, BV, ZTS, EQX, SION, BXSL, KNTK, CC, BCE, FWONK, SION, CE, HHH, UBER, STX, GHRS, CENX, JCAP, ALKT, COHR, MDU and VNT
Stocks With Unusual Call Option Activity:
  • 1) UWMC 2) INSM 3) CE 4) TTWO 5) AMT 
Stocks With Most Positive News Mentions:
  • 1) DGII 2) SOUN 3) CRON 4) CHYM 5) GCT
Sector ETFs With Most Positive Money Flow:
  • 1) XLV 2) IXN 3) XME 4) MAGS 5) ITA
Charts: 

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

Earnings of Note 
Company/Estimate 

Before the Open:
  • (ACMR)/.42
  • (AMR)/-.43
  • (CLMT)/.07
  • (ROAD)/1.01
  • (FLR)/.70
  • (OKLO)/-.16
  • (SPB)/1.46
  • (TTWO)/.33
  • (UAA)/.02
  • (WEN)/.16 
After the Close: 
  • None of note
Economic Releases 
8:30 am EST
  • The Change in Non-Farm Payrolls for July is estimated to rise to 82K versus 57K in June.
  • The Unemployment Rate for July is estimated at 4.2% versus 4.2% in June.
  • Average Hourly Earnings MoM for July is estimated to rise +.3% versus a +.3% gain in June

11:00 am EST 

  • NY Fed 1Y Inflation Expectations Index for July is estimated to rise to +3.71% versus +3.67% in June

3:00 pm EST

  • Consumer Credit for June is estimated to rise to +$11.6B versus -$.2B in May

Upcoming Splits

  • (MNST) 2-for-1
Other Potential Market Movers
  • The weekly Baker Hughes rig count and the weekly CFTC speculative net positioning reports 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 +1.3% Above 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 15.1 +.6
  • 2 Sectors Rising, 9 Sectors Declining
  • 41.5% of Issues Advancing, 55.9% Declining 
  • TRIN/Arms 1.03 -5.5%
  • Non-Block Money Flow +$45.3M
  • 98 New 52-Week Highs, 49 New Lows
  • 60.3% (-.%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 66.4 -1.0
Polymarket: 
  • Will China invade Taiwan by June 30th 2027? 10.0% unch.
  • Strait of Hormuz traffic returns to normal by August 31st 16.0% -2.0 percentage points
  • Iran agrees to end enrichment of uranium by Sept. 30th 10.0% unch.
  • Israel withdraws from Lebanon by August 31st 1.0% unch.
  • US Invades Iran before 2027 17.0% +1..0 percentage point
  • US announces end of Iranian blockade by August 31st 70.0% -9.0 percentage points
Other:
  • Bloomberg Global Risk-On/Risk-Off Index 125.9 +.1%
  • Global Monitor Iran Instability Index 74.0 unch.
  • Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 90.0% unch.
  • US High-Yield Tech Sector OAS Index 417.75 -6.75 basis points
  • Bloomberg Cyclicals/Defensives Index 271.0 +.2%
  • Morgan Stanley Growth vs Value Index 149.7 -.8%
  • CNN Fear & Greed Index 60.0 (GREED) unch.
  • 1-Day Vix 10.8 -10.6%
  • Vix 15.6% -1.6%
  • Total Put/Call .82 -2.4%