Stocks Slightly Lower into Final Hour on Iran-related Global Sanction Threats, AI Infrastructure Build-Out Concerns, Technical Selling, Tech/Alt Energy Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.8 -.1%
• BofA Private Credit Proxy Index 73.8 +.4% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .29 unch.
• BofA Global Financial Stress Indicator -.15 -3.0 basis points
• European Financial Sector CDS Index 53.8 -.5%
• Emerging Market CDS Index 138.8 -.6%
• Israel Sovereign CDS 53.4 -1.4%
• Bloomberg Global Trade Policy Uncertainty Index 1.0 unch.
• US Morning Consult Daily Consume Sentiment Index 89.8 -1.3

• Citi US Economic Surprise Index 24.0 +3.1

• Citi Eurozone Economic Surprise Index 84.6 +6.6

• Citi Emerging Markets Economic Surprise Index 21.7 -3.5
• S&P 500 Current Quarter EPS Growth Rate YoY(467 of 500 reporting) +49.6% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 391.72 +1.15:  Growth Rate +33.1% +.5 percentage point, P/E 19.6 -.1
• S&P 500 Current Year Estimated Profit Margin 16.32% +4.0 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 952.75 +2.74: Growth Rate +83.7% +.5 percentage point, P/E 19.2 -.1
• Bloomberg US Financial Conditions Index 1.31 +1.0 basis point
• US Yield Curve 46.75 basis points (2s/10s) -2.75 basis points
• Bloomberg Industrial Metal Index 180.1 +.1%
• Dutch TTF Nat Gas(European benchmark) 68.5 euros/megawatt-hour +4.0%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 13.3% -.8 percentage point
• US Atlanta Fed GDPNow Q3 Forecast +4.0% unch.
• US 10-Year T-Note Yield 4.70% -4.0 basis points
• 1-Year TIPS Spread 2.01 -3.0 basis points

• Highest target rate probability for Oct. 28th FOMC meeting: 46.0% (+2.7 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 45.1%(-.2 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +30 open in Japan 
• China A50 Futures: Indicating -70 open in China
• KOSPI 200 Futures: Indicating -16 open in South Korea 

• DAX Futures: Indicating +80 open in Germany

Portfolio:

• Slightly Higher: On gains in my consumer discretionary/financial sector longs, index hedges and emerging market shorts
• Disclosed Trades: None
• Market Exposure: 75% net long

Bear Radar

Style Underperformer:

• Mid-Cap Growth -1.4%

Sector Underperformers:

• 1) Space -3.5% 2) Computer Hardware -3.1% 3) AI Innovation -2.7%

Stocks Falling on Unusual Volume: 

• HQH, CRI, BWXT, MRNA, COHR, MP, BZ, USAR, SNDK, MGA, FRVO, SLS, TEM, AGX, XPEV, INOD, BRUN, AZTA, AAOI and RMAX

Stocks With Unusual Put Option Activity:

• 1) XEL 2) SBET 3) TMC 4) WPM 5) TSEM

Stocks With Most Negative News Mentions:

• 1) AAOI 2) FUTU 3) XPEV 4) RXT 5) MU

Sector ETFs With Most Negative Money Flow:

• 1) XLV 2) XLF 3) SMH 4) XLE 5) XLP

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.3%

Sector Outperformers:

• 1) Insurance +1.4% 2) Restaurants +1.2% 3) Utilities +1.1%

Stocks Rising on Unusual Volume:

• SCTX, FTH, JANX, ASST, BBCQ, SA, VCX, BMNR, EZPW, GENB, VITL, KURA, PRE, SGHC, ANRO, BMA, ARCT, LIFE, PHVS, HELP, AVAH, PICS, CALM, OR, NGNE, ASMB, MASS, NOMD, AERO, MO and VALE

Stocks With Unusual Call Option Activity:

• 1) DBA 2) MCHP 3) CYPH 4) DKS 5) XYL 

Stocks With Most Positive News Mentions:

• 1) RUM 2) EXPE 3) MA 4) TGT 5) ASST

Sector ETFs With Most Positive Money Flow:

• 1) ITB 2) CIBR 3) XME 4) XRT 5) KRE

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:

• (BMO)/2.71
• (BNS)/1.50
• (DKS)/3.76 

After the Close: 

• (BOX)/.40
• (HEI)/1.51
• (INTU)/3.58
• (NCNO)/.27
• (SMTC)/.61
• (ZM)/1.48 

Economic Releases 

9:00 am EST

• The FHFA House Price Index MoM for June is estimated to rise +.2% versus a +.3% gain in May.
• The S&P Cotality CS 20-City MoM SA for June is estimated to rise +.1% versus a +.15% gain in May.  

10:00 am EST

• The Richmond Fed Manufacturing Index for Aug. is estimated to rise to 7.0 from 5.0 in July.
• New Home Sales for July is estimated to fall to 620K versus 628K in June.
• Conference Board Consumer Confidence for Aug. is estimated to fall to 90.2 versus 90.8 in July. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Barkin speaking, 2Y T-Note auction, weekly ADP employment change, weekly US retail sales reports, Philly Fed Non-Manufacturing Activity Index for Aug., weekly API crude oil stock report, M2 Money Supply MoM for July, Jefferies Semi/IT Hardware/Communications Technology Summit and the Deutsche Bank Tech Conference 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 13.9 -2.3
• 6 Sectors Rising, 5 Sectors Declining
• 47.7% of Issues Advancing, 50.1% Declining 
• TRIN/Arms .93 +10.7%
• Non-Block Money Flow +$95.0M
  
• 56 New 52-Week Highs, 47 New Lows
• 60.6% (+.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 60.2 +1.7

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 8.0% -1.0 percentage point
• Strait of Hormuz traffic returns to normal by September 30th 6.0% unch.
• Iran agrees to end enrichment of uranium by Sept. 30th 4.0% +1.0 percentage point
• Israel withdraws from Lebanon by September 30th 2.0% unch.
• US Invades Iran before 2027 17.0% -1.0 percentage point
• US announces end of Iranian blockade by September 30th 34.0% -3.0 percentage points

Other

• Bloomberg Global Risk-On/Risk-Off Index 126.1 -1.2%
• Global Monitor Iran Instability Index 54.0 -12.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 90.0% -2.0 percentage points
• US High-Yield Tech Sector OAS Index 467.0 +3.5 basis points
• Bloomberg Cyclicals/Defensives Index 269.7 -.8%
• Morgan Stanley Growth vs Value Index 147.0 -.8%
• CNN Fear & Greed Index 55.0 (Moved to GREED from NEUTRAL) +1.0
• 1-Day Vix 7.7 -22.7%
• Vix 15.7% +3.6%
• Total Put/Call .83 +13.7%

Monday Watch

Around X:

• @Business   

• EXCLUSIVE: Canada sees little chance of resuming talks with the US before the midterms and is preparing to ride out Donald Trump's term. 
• Bond investors will zero in on Kevin Warsh’s Jackson Hole speech this week, with a further selloff in long-dated Treasuries at stake as markets look for clues on his response to persistent inflation and fiscal concerns. 
• Data centers “can be a benefit to the community. So all the worries, all the drummed up alarmism is really bad for the future of America if we don't get this right,” @RepMcCormick (R-GA) tells @EenaRuffini and @davidgura on Bloomberg This Weekend. He says he’s suggested building them on military bases to the White House. 
• Here's what's moving markets today. 
• Here’s what you need to know to start your day. 

• @Zerohedge 

• Wary Of Backlash, Pro-Israel GOP Senate Hopeful Asks AIPAC Not To Spend On His Behalf. 
• Hedge Funds Dump Stocks At Fastest Pace Since Liberation Day: Here Is What They Bought And Sold. 
• *TRUMP: DATA CENTERS PROVIDE TREMENDOUS AMOUNT OF JOBS, MONEY. *TRUMP: WHEN XI COMES TO WHITE HOUSE, WE'LL BE USING EAST ROOM. 
• Debt At $40 Trillion: Morgan Stanley Asks Will It "Brake" Or "Break" The Economy?
• Temporary Protected Status Ends For 13 Nationalities. 
• WHO Says Pandemic Determinations Can Be Made Without 'Evidence Of Illness'.
• Warsh and Bessent Need to Regain the Policy High Ground.
• The Fed Owns Over 50% Of All Bonds Maturing Between 10 And 15 Years From Now.
• Did Canada Just Sign Its Own Economic Death Warrant?.
• "Civilizational Suicide": China's Humanoids Sprint Ahead As Americans Fight Over Data Center And Socialism.
• Death Of Europe's Industrial Base: VW CEO Set To Announce 50,000 Job Cuts.
• Taiwan Tech Insiders Warn Beijing's Germanium Squeeze Is Hitting Production.
• "Iran Is Losing Its Grip On Hormuz": Strait Traffic Explodes Nearly 400%.
• Turkey & Israel On Brink Of Military Clash After Netanyahu Ordered Strikes On Syrian Airbase.
• Visualizing Every US State's Economy Matched To A Country.
• When The Rule Of Law Fails.
• Inside America's Drone Arms Race: What Industry Experts See Ahead Of Procurement Supercycle.
• Family Structure Determines Kids' Success In School More Than Race Or Income, Researchers Say.
• For Decades, The United States Ignored Latin America. All That Changed Under Trump.
• Hartnett On Bessent's 'Quasi QE: "Success is Expected, Failure Is Unthinkable".              
• "They Can't Define A Woman": Bill Maher Says Democrats "Opened The Door" With "Crazy" Cultural Issues.  
• *GREER DISPUTES CARNEY COMMENT US OFFERED TOO LITTLE: NYT. *GREER: CAR TARIFF COULD'VE BEEN AS LOW AS 7% IN DEAL; US OFFERED TO ELIMINATE THE 10% TARIFF ON SOFTWOOD LUMBER; TO CUT TARIFFS FOR MOST OF CANADA STEEL TO 25%. *US COULD'VE SUSPENDED 50% TARIFF ON CANADA DAIRY, WINE. 
• *NVIDIA CUSTOMERS NOTIFIED ABOUT AI PRICE HIKES ABOVE 15%. 
• Axios: 40 Tankers Transited Hormuz Friday Night, But Real Crisis Is Diesel. 

• @CNBC 

• Stock futures are little changed after Dow posts back-to-back weekly declines: Live updates.
• Amazon said it plans to offer drone deliveries in nearly 500 U.S. cities and towns by the end of the year, a sign of momentum for a project that’s been slow to develop since founder Jeff Bezos first laid out his vision for the service almost 13 years ago. The planned expansion for Prime Air would represent a sixfold increase from its current footprint, the company said in a blog post.
• Wells Fargo and Citigroup have room to buy a big bank. These 5 regionals fit the bill.
• Equal-weight S&P 500 is leading the 2026 market and its flagship trade just hit $100 billion.
• America's AI backlash: How the effort to keep worker trust is occurring inside companies.
• Democratic House leader Jeffries meets with Jared Kushner as midterms loom.

• @Wallstengine

• Figure’s humanoid can now climb 15 feet up and 15 feet down in about 2 minutes. How far are we from human-level speed? (video) 

• @MarioNawful

• Trump’s investment accounts made more than 1,000 trades in June alone, involving somewhere between $78 million and $263 million. The trades span companies including Berkshire Hathaway, Palantir, Meta, Visa and Coinbase, as Trump’s tariffs, sanctions and foreign-policy decisions continue to move markets. The White House says the portfolio is independently managed and that Trump cannot influence individual trades, but Trump is the biggest shareholder in the Truth API service that sells trading firms ultra-fast access to his market-moving posts.

• @shaunmmaguire

• America is incredibly far behind in robotics. This is existential. (video)

• @BGatesIsaPsycho

• Meanwhile down in the New York Sewer System at 4am. These mysterious Men have been captured on camera before escaping the Sewers in the early hours, looking professional, well equipped & up to nefarious purposes. Look how suspicious they look - Question is what are they doing? (video)

• @EricLDaugh

• BREAKING: Outrage is erupting nationwide after New Jersey Gov. Mikie Sherrill (D) signed a law that could IMPRISON Christians that pray outside abortion facilities. This is INSANE! Strike it down! MCENANY: "Some people could face 18 months in prison for simply praying outside a facility. And if the state upgrades the charge, pro-life advocates could face up to 10 years in prison plus a fine of up to $150,000." Totally unconstitutional. This might end up at SCOTUS. (video)

• @Geiger_Capital

• Absolutely incredible… Mark Cuban: "California is run terribly. The taxes are insane. That’s why people keep moving to Texas." Mark Cuban (10 minutes later): "Vote for James Talarico. Turn Texas blue. What have Republicans ever done for the state." (video)

• @MattGaetz

• Scott Jennings for Press Secretary is a bad idea.

• @MTSLive

• SITUATION DETECTED: Nvidia is using its $6 billion deal with Poolside to develop one of the world’s most powerful open-weight models, aiming to challenge both Chinese labs and the US frontier. More than 100 Poolside engineers will be joining the Nemotron project, per WSJ.

• @GenFlynn

• Globalists are waging a physical war in Ukraine to first colonize Ukraine in order to then destroy Russia to gather more resources for their own selfish interests. Globalists are waging a cultural war in the United States to destroy the last bastion of freedom in order to gather more resources for their own selfish interests. Stop the rise of globalism by facing up to those who are running these wars. America First!.

• @AFpost

• Speculation mounting that Byron Donalds to choose Meg Weinberger as running mate, per Florida Politics. Weinberger donated to Democrat Andrew Gillum when he ran against Ron DeSantis for Governor of Florida.

• @MAGAVoice

• Sophie Cunningham is AGAIN THE ONLY player putting her hand on her heart during the National Anthem. This is why the Woke Mob is coming for her. I STAND WITH SOPHIE. (video)

• @RogerJStoneJr

• Flock Quietly Rolls Out Surveillance Drones to Track Americans from the Sky.

• @Wejolyn

• MORE 18 month warnings…. Pay attention, they tell us what they are planning.

• @TheDefiantGhost

• Joe Rogan just revealed something the U.S. government never wanted public - Bob Woodward was a CIA asset who took down Nixon because Nixon knew who killed JFK. Bob Woodward wasn’t a journalist. He was a Naval intelligence officer working inside the Nixon White House. Then he suddenly appears at the Washington Post as a brand-new reporter with zero experience… And gets handed the biggest story in American history. His main source? The #2 guy at the FBI. The Watergate burglars? Almost all CIA employees. Nixon was elected by more votes than any president in U.S. history. Two years later he’s gone. Why? Because he knew who killed JFK… and was about to expose it. This wasn’t journalism. This was a deep-state coup. (video)

• @nogps1

• Come on! How is anyone not realizing what is happening in our skies? Has the brainwashing been so effective that massive amounts of humanity can no longer think for themselves. Please engage your brain & use your eyes, watch the sky & observe how aircraft trails don't evaporate. (video)

•  @OrwellDay

• Palantir just released a new surveillance system that fuses satellites, radars and every camera into one real-time tracker of people and movement. We have to consider the possibility (probability?) that with Flock as the eyes, a system like this could be overlaid onto the US and we could be the targets. Another reason we cannot allow Flock to exist. (video)

• @pubity

• China is removing Windows from all government PCs starting this year. They have so little trust in the United States that they view Windows as a potential security risk.

• @connor_echols

• NEW: The Israeli government is paying for ads on Ted Cruz's podcast. Cruz can't take the money himself. But, under an unusual licensing deal, those foreign funds can go to a super PAC dedicated exclusively to Cruz. Let me explain (1/7).

• @EYakoby

• BREAKING: A new report completely exposes what everyone has known for a long time. More extreme candidates, specifically linked to the DSA, are getting massively boosted by non-Americans on X. (pic)

Night Trading

• Asian indices are -.5% to +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 67.5 -.5 basis point.
• China Sovereign CDS 35.0 -.5 basis point.
• China Iron Ore Spot 97.4 USD/Metric Tonne +1.7%.
• Crude Oil 85.30/bbl. -2.1%
• Gold 4,677.5 USD/t oz. -.06% 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.40 +.18%. 
  
• Bloomberg Emerging Markets Currency Index 34.5 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 127.4 -.1%.
• US 10-Year Yield 4.71% -2.0 basis points. 
• Japan 30-Year Yield 4.08% +1.0 basis point. 
• Volatility Index(VIX) futures 17.5 -.3%. 
• Euro Stoxx 50 futures +.13%.
• S&P 500 futures +.16%.
• NASDAQ 100 futures +.05%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and financial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% Net Long heading into the week.