Stocks Reversing Modestly Lower into Final Hour on Mideast War Escalation, Global Supply Chain Disruption Fears, Rising Long-Term Rates, Pharma/Homebuilding Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 52.3 -.1%
• BofA Private Credit Proxy Index 68.8 -2.1% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .29 +2.0 basis point
• BofA Global Financial Stress Indicator -.11 +4.0 basis points
• European Financial Sector CDS Index 55.5 -.6%
• Emerging Market CDS Index 145.0 -.1%
• Israel Sovereign CDS 63.4 +2.8% 
• Bloomberg Global Trade Policy Uncertainty Index .7 +.1
• US Morning Consult Daily Consume Sentiment Index 89.8 +.7

• Citi US Economic Surprise Index 50.3 -3.4

• Citi Eurozone Economic Surprise Index 13.9 +6.6

• Citi Emerging Markets Economic Surprise Index 23.5 -5.8
• S&P 500 Current Quarter EPS Growth Rate YoY(48 of 500 reporting) +52.3% -2.5 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 375.84 +1.43:  Growth Rate +27.3% +.5 percentage point, P/E 19.9 -.3
• S&P 500 Current Year Estimated Profit Margin 15.66% +2.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(2 of 10 reporting) +510.0% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 908.65 +2.38: Growth Rate +75.2% +.4 percentage point, P/E 19.1 -.4 
• Bloomberg US Financial Conditions Index 1.06 -10.0 basis points
• US Yield Curve 38.0 basis points (2s/10s) +1.75 basis points
• Bloomberg Industrial Metal Index 173.24 +.33%
• Dutch TTF Nat Gas(European benchmark) 58.7 euros/megawatt-hour +2.2%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.0% -.4 percentage point
• US Atlanta Fed GDPNow Q2 Forecast +1.7% unch.
• US 10-Year T-Note Yield 4.60% +5.0 basis points
• 1-Year TIPS Spread 1.15 -1.0 basis point

• Highest target rate probability for September 29th FOMC meeting: 53.6% (+2.4 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Oct. 28th meeting: 49.3%(+.3 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +1,080 open in Japan 
• China A50 Futures: Indicating -140 open in China
• KOSPI 200 Futures: Indicating +22 open in South Korea 

• DAX Futures: Indicating -12 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech sector longs and index hedges
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges 
• Market Exposure: Moved to 25% net long

Bear Radar

Style Underperformer:

• Small-Cap Value -.4%

Sector Underperformers:

• 1) Homebuilding -2.1% 2) Pharma -1.3% 3) Regional Banks -1.2%

Stocks Falling on Unusual Volume: 

• CDNA, FNB, ABG, HROW, ANL, ETON, QXO, SHAZ, TARS, MESO, FDUS, MGY, ANRO, CMPS, MEC, RYAAY, AEHR, BE, SION, TEM, PESI, AAON, TRVI, AVEX, AVBP, STAA, HDB, PSNL, PENG and PVLA

Stocks With Unusual Put Option Activity:

• 1) CARR 2) AR 3) DHI 4) CF 5) EXE

Stocks With Most Negative News Mentions:

• 1) GRAIL 2) HUBG 3) SG 4) WGS 5) CLOV

Sector ETFs With Most Negative Money Flow:

• 1) AIRR 2) XLF 3) FBT 4) XBI 5) XLI

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.7%

Sector Outperformers:

• 1) Social Media +2.2% 2) Coal +1.9% 3) Semis +1.6%

Stocks Rising on Unusual Volume:

• IREN, CIFR, GMTL, CLSK, MARA, HUT, AGX, XNCR, APLD, BETA, TTAN, BABA, SGHC, EVER, BLBD, PLOW, LXP, TCOM, WULF, NBIS, VG, ATEX and NU 

Stocks With Unusual Call Option Activity:

• 1) INV 2) EH 3) INO 4) ONON 5) LW 

Stocks With Most Positive News Mentions:

• 1) IREN 2) AMC 3) CNK 4) LITE 5) NBIS

Sector ETFs With Most Positive Money Flow:

• 1) SOXX 2) VGT 3) XLV 4) IBB 5) XOP

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:

• (MMM)/2.25
• (ALLY)/1.22
• (SCHW)/1.56
• (DHI)/2.97
• (DHR)/1.84
• (EFX)/2.20
• (GM)/3.19
• (GPC)/2.08
• (HAL)/.54
• (HAS)/1.16
• (KEY)/.42
• (MRSH)/2.90
• (MSCI)/4.97
• (NOC)/6.82
• (SYF)/2.14
• (VMI)/5.80
• (VICR)/.65 
• (WFRD)/.90 

After the Close: 

• (AIR)/1.38
• (ALK)/-.99
• (OZK)/1.48
• (COF)/4.59
• (CB)/6.77
• (EQT)/.42
• (IBKR)/.64
• (PEGA)/.43
• (WAL)/2.36 

Economic Releases 

 8:30 am EST

• Philly Fed Non-Manufacturing Activity Index for July. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The ADP weekly employment change report, US weekly retail sales reports and the API weekly crude oil stock report 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 -16.5% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.0 -.9
• 4 Sectors Rising, 7 Sectors Declining
• 44.4% of Issues Advancing, 52.8% Declining 
• TRIN/Arms 1.0 -10.7%
• Non-Block Money Flow +$52.1M
  
• 45 New 52-Week Highs, 33 New Lows
• 58.5% (-1.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 57.9 -3.2

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 10.0% +1.0 percentage point
• Strait of Hormuz traffic returns to normal by August 31st 15.0% +3.0 percentage points
• Iran agrees to end enrichment of uranium by Sept. 30th 6.0% -1.0 percentage point
• Israel withdraws from Lebanon by August 31st 4.0% +1.0 percentage point
• US Invades Iran before 2027 27.0% -4.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 123.6 +1.8%
• Global Monitor Iran Instability Index 65.0 +11.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 91.0% +8.0 percentage points
• US High-Yield Tech Sector OAS Index 469.5 -6.0 basis points
• Bloomberg Cyclicals/Defensives Index 259.9 +.6%
• Morgan Stanley Growth vs Value Index 150.1 +1.1%
• CNN Fear & Greed Index 39.0 (FEAR) +2.0
• 1-Day Vix 9.7 -42.1%
• Vix 17.7 -6.0%
  
• Total Put/Call .92 -2.1%

Monday Watch

Around X:

• @Business   

• If President Donald Trump knows where he wants to take the war in Iran, he’s giving little sign of it publicly. 
• South Korea’s most closely watched stock-market innovation is morphing into a headache for President Lee Jae Myung. 
• As AI costs go up, CFOs have to decide how much of that spending they want to disclose to the outside world. 
• 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 

• "Signs Of Panic": Goldman Derivs Guru Warns AI Credit Blowout Spilling Over To Entire Market. 
• The United States is "planning for a wider war," U.S. official tells Washington Post. 
• Taiwan's President Ratchets Anti-China Rhetoric In Party Speech: Must Resist 'Red Terror' Of Beijing. 
• CTA threshold levels have been broken in Nasdaq and are "right there" in SPX: (Goldman). Key pivot points are getting closer (SPX 7,457 ref): ST = 7446. MT = 7175. LT = 6745. NDX (28,592 ref). ST = 29265. MT = 27441. LT = 25088). 
• Trump Endorses Graham's Sister For Full Term, Shattering Expectations Of Short Stay. 
• The Data-Center Revolt Goes National: Tea Party Veteran Leads 142 Rallies Across 42 States. 
• Judge Dismisses DOJ's New Mexico Voter Data Request.
• Mamdani's New York: West Side Homeless Camp Stretching 12 Blocks Now Allegedly Stealing City Power.
• The "pros" (hedge funds) have sold tech stocks in 6 of the past 8 weeks. GS: "In cumulative % terms, this is the largest selling on our record (10+ years)."
• Tropical Threat Emerges In Gulf Of America With US Refineries In Potential Crosshairs.
• Zelensky Boasts Of Hits On 3 Russian 'Shadow Fleet' Tankers After Kiev Military Depot Leveled.
• The Day Democrats Return To Wall Street.
• Social Media Influencers Andrew And Tristan Tate Arrested In Miami.
• Breaking ; According to sources, the US attacked an Iranian military base and reduced three of Iran's airbases to rubble. Several high-ranking officials, including Iran's Defense Minister, were killed in the attack. Full details are not yet available. (video)
• Traders Stunned By Momentum Meltdown As Earnings Quality Problem Simmers Under The Surface.
• US-Iran Tit-For-Tat Spirals Towards Broader Conflict.
• HORMUZ STRAIT TO REMAIN BLOCKED WHILE US MALICE PERSISTS: FARS. IRAN'S FARS NEWS CITES INFORMED IRGC SOURCE ON HORMUZ CLOSURE.
• MOONSHOT SAID TO BE PLANNING FOR HONG KONG IPO IN NEXT 6 MONTHS.
• Iran's Reliance On China's Beidou Satellite System Is A Game-Changer In War With US.
• White DSA Member Inadvertently Exposes Socialist Playbook: "Secret Nazis" Are Fine If They Advance Agenda.
• Election Integrity: Is Representative Democracy A Foolish Fantasy?      
• Hartnett: This Is The Biggest Mag7 Surprise That Could Spark A Full-Blown Market Crash.
• "Start Spreadin' The News": New York Losing Billions As Millionaires Flee Big Apple.

• @CNBC

• TSMC is accelerating Arizona factory buildout to capitalize on AI 'megatrend,' CFO says.
• Stock futures are little changed after Wall Street suffers losing week: Live updates.
• The market for psychedelic drugs to treat mental health conditions gets a big buy signal.   
• Earnings playbook: Alphabet and Tesla are among the big companies set to report this week.
• Housing costs is the top political issue for young voters, CNBC survey finds.
• Cybersecurity risks posed by over-the-air tech in autos has analysts concerned.   

• @MarioNawful

• China’s robot industry is starting to look straight out of 2080. One humanoid patrols alongside real police, can run, throw spinning kicks, and operate for hours. Another is basically a real-life Transformer that a person can sit inside and control for rescue missions or dangerous industrial work. Then there’s the personal robot that can recognize emotions, remember conversations, and develop its own personality. Thousands have already pre-ordered it. Personal robots are getting very real, very fast. (video)
• Trump stopped a 50 plane Israeli strike on Iran with pilots already in their cockpits, and the plan is still sitting there loaded. Three to four weeks ago, roughly 50 Israeli jets were set for a massive strike on Iran, some pilots already strapped in, when Trump called it off at the last moment. Israeli journalist Amichai Stein carried the story: the plan, he says, still exists, the targets are still standing, and Israel wants to finish the mission. The buildup around him points the same way. More than 60 American refueling aircraft have landed in Israel with 16 F-16s on the way. Which means the machinery for a much bigger air war is being assembled on Israeli soil. His trigger logic is dark and simple... (video)

• @BGatesIsaPsycho

• Meanwhile in Ukraine. Tens of thousands of Ukrainians line the Streets in protest against Globalist Puppet Zelensky & the Regime. Finally. (video)

• @WeTheBrandon

• So, basically, the Israeli and Ukrainian Wars are attacking global energy and food production while attacking regional (in the Mideast) water supplies. These are two fronts in the same war. (video)

• @RepRileyMoore

• New reports suggest China is providing Iran with targeting information used to attack our forces. The CCP is already undermining America through espionage, influence campaigns, and data theft. They're our adversary. That's why I introduced the Stop CCP Visas Act. We shouldn't be training the next generation of CCP leaders. (video)

• @AmericaOnlyBro

• TERRYL FARNSWORTH OF TPUSA NEEDS TO BE HAULED IN FOR QUESTIONING LIKE YESTERDAY! Once you understand the logistics of Terryl’s behavior in the final minutes of Charlies life and just after he was killed, you understand that HE HAD TO KNOW WHAT WAS GOING TO HAPPEN. Terryl positioned himself in a place that required climbing to get a good vantage point. He did this BEFORE Charlie was killed. He then recorded a video from his vantage point which began recording BEFORE anyone else had made it outside yet. After Charlie is shot, people start to panic and run for their lives like in any tragedy. Charlies' security detail does their scramble to hide evidence and tie up loose ends before they manage to carry Charlie out like a sack of potatoes with no neck support or no real concern for his well-being. TERRYL IS IN PLACE BEFORE ANYONE MAKES IT TO THE EXIT. (video)

• @ZadeSmith4

• Do you always smile when the man you were protecting gets assassinated? (pic)

• @Glenn_Diesen

• Germany and Britain are evacuating their diplomats from Kuwait, Bahrain, Qatar and Saudi Arabia. The US has advised its citizens to leave the Middle East region. A lot of indications that massive escalations are being prepared.

• @NihiloX

• Former Navy Seal Annihilated the story of what happened to Charlie Kirk perfectly. “I've killed more than a handful of people and that looks like an explosion to me.” What if the bullet hit his spine? “Nah. No. Absolutely not.” (video)

• @Megatron_ron

• BREAKING: A former USAF pilot close to CENTCOM claims that at least 3-5 more soldiers aboard the medical evacuation flights will ‘probably not make it’. There are 15 more soldiers with life-threatening, very severe injuries whose fate is also still unclear.

• @ErikaCA47

• Want to know why Fox News is not reporting about China’s exploitation in our elections? These people man. We have an uphill battle for the truth. (pic)

• @DC_Draino

• Lisa Murkowski is bankrolled by Melinda Gates?! Sadly, it gets worse. You know who who funded the initiative to get Ranked Choice Voting installed in Alaska? Bill Gates. And who did it benefit? Lisa Murkowski. Now do you see why she is a backstabbing RINO on Voter ID? (pic)

• @IRanMediaco

• Percentage of drinking water from desalination: —Bahrain 100% —Qatar 99% —Kuwait 90% —Saudi Arabia 70% —UAE 42% —Iran 3% If Gulf countries are willing to allow the US to use their territory to attack Iranian desalination plants, then prepare for the consequences.

• @HormuzReport

• JUST IN: Footage shows the aftermath of Iran's strike on the Al-Subiya power station and water desalination plant in Kuwait, where a fire erupted and multiple electricity generation units sustained severe damage. The strike was second consecutive day of Iranian attack targeting Kuwaiti power and water desalination infrastructure. (video)

• @TuiteroSismico

• URGENT Iranian attacks continue against U.S. bases in the Middle East! In Jordan, one of them would have hit the Patriot launchers, causing multiple secondary explosions! And apparently several wounded. CENTCOM has already confirmed 2 dead and 1 missing. (video)

• @C_3C_3

• Americans literally don’t know if a sitting member of the US Senate is alive. It’s been 39 days. And they don’t care that Americans don’t know. Not even a little. Congress is a disgrace.

• @afshineemrani

• THE SKY IS ON FIRE. ​Reports are coming in: The U.S. has just launched a devastating ballistic missile strike on Tehran, leaving the entire area engulfed in flames. ​This comes as a direct response after Iranian missiles targeted Jordan, leaving two American soldiers dead and one missing. ​The message from the White House is deafeningly clear: NO MORE NEGOTIATIONS. (video)

• @Glenn_Diesen

• NATO's objective of bringing the war to Russia is advancing, as evidenced by today's attack on Wildberries in Moscow. This can only go on for so long before Russia brings the war to NATO territory. Lunacy. (video)

• @PeterBernegger

• Side door access found in Flock camera units - it gets worse! The data collected by the city is shared via that side door - which Flock did not tell the city council about - with a Fusion Center. Fusion Centers combine local, county, state and federal governments. These are way beyond license plate readers, they are profiling us!! This is De facto GPS tracking us individually. Flock lied by omission to the City of Cleveland where the council member(s) had to find out about the side door access on their own - Flock did not tell them. See 55 second video.

• @RickyTheGuido

• Let’s talk about why Hunter Kozak was caught practicing his reaction for when Charlie Kirk got assassinated. (video)

• @DrchadrlieWardQ

• BREAKING : FBI whistleblower testifies under oath that FBI won’t allow 11,000+ hours of J6 footage to be released b/c it would expose undercover agents committing crimes inside Capitol. Not only was J6 a Fed setup, but now it’s confirmed that FBI is also covering its tracks. (video)

Night Trading

• Asian indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 71.5 +1.0 basis point.
• China Sovereign CDS 37.75 +.25 basis point.
• China Iron Ore Spot 100.40 USD/Metric Tonne +.2%.
• Crude Oil 84.20/bbl. +2.1%
• Gold 4,019.0 USD/t oz. unch. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.39 +.04%. 
  
• Bloomberg Emerging Markets Currency Index 34.54 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 121.6 +.2%.
• US 10-Year Yield 4.55% unch. 
• Japan 30-Year Yield 3.87% n/a. 
• Volatility Index(VIX) futures 19.1 -1.0%. 
• Euro Stoxx 50 futures +.11%.
• S&P 500 futures +.14%.
• NASDAQ 100 futures +.42%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by energy and shipping shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% Net Long heading into the week.