Stocks Reversing Lower into Final Hour on Rising Fed Rate-Hike Odds, AI Infrastructure Build-Out Concerns, Sector Rotation, Tech/Alt Energy Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 51.4 +1.0%
• BofA Private Credit Proxy Index 71.50 +1.2% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .27 unch.
• BofA Global Financial Stress Indicator -.16 -1.0 basis point
• European Financial Sector CDS Index 54.9 +.1%
• Emerging Market CDS Index 142.6 +1.0%
• Israel Sovereign CDS 61.3 -2.2% 
• Bloomberg Global Trade Policy Uncertainty Index .6 unch.
• US Morning Consult Daily Consume Sentiment Index 89.1 -2.2

• Citi US Economic Surprise Index 53.7 +6.3

• Citi Eurozone Economic Surprise Index 7.3 +1.0

• Citi Emerging Markets Economic Surprise Index 29.3 -2.2
• S&P 500 Current Quarter EPS Growth Rate YoY(41 of 500 reporting) +54.8% -5.8 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 374.41 +.87:  Growth Rate +26.8% +.4 percentage point, P/E 20.2 unch.
• S&P 500 Current Year Estimated Profit Margin 15.64% +1.0 basis point
• 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 906.27 +1.21: Growth Rate +74.8% +.3 percentage point, P/E 19.5 -.1 
• Bloomberg US Financial Conditions Index 1.21 +5.0 basis points
• US Yield Curve 41.0 basis points (2s/10s) -.75 basis point
• Bloomberg Industrial Metal Index 174.8 +.9%
• Dutch TTF Nat Gas(European benchmark) 55.0 euros/megawatt-hour +1.2%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.4% -.2 percentage point
• US Atlanta Fed GDPNow Q2 Forecast +1.7% +40.0 basis points
• US 10-Year T-Note Yield 4.57% +2.0 basis points
• 1-Year TIPS Spread 1.13 +3.0 basis points

• Highest target rate probability for September 29th FOMC meeting: 48.5% (+4.6 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Oct. 28th meeting: 48.1%(+2.8 percentage points) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -750 open in Japan 
• China A50 Futures: Indicating -248 open in China
• KOSPI 200 Futures: Indicating -32 open in South Korea 

• DAX Futures: Indicating +75 open in Germany

Portfolio:

• Higher: On gains in my financial/consumer discretionary sector longs, index hedges and emerging market shorts
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
• Market Exposure: Moved to 50% net long

Bear Radar

Style Underperformer:

• Large-Cap Growth -1.8%

Sector Underperformers:

• 1) Space -6.7% 2) AI Innovation -5.2% 3) Alt Energy -4.7%

Stocks Falling on Unusual Volume: 

• KRMN, RIO, TSM, ADUR, GRRR, GLAS, HL, SHAZ, CMPS, CCXI, BEAM, MANE, CHRN and ASTS

Stocks With Unusual Put Option Activity:

• 1) VTRS 2) LQD 3) GRRR 4) MAT 5) VLO

Stocks With Most Negative News Mentions:

• 1) SNDK 2) ERAS 3) WGS 4) PICS 5) BTU

Sector ETFs With Most Negative Money Flow:

• 1) BAI 2) RAAX 3) XLI 4) IYH 5) XBI

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.4%

Sector Outperformers:

• 1) Medical Equipment +4.5% 2) Computer Services +3.7% 3) Road & Rail +3.1%

Stocks Rising on Unusual Volume:

• MAN, MAAS, CDNA, RHI, RBT, SMG, ERIE, MATX, REXR, CTAS, BTI, JBHT, VSTS, AVAV, KFRC, HUBG, MAT, SMA, ROOT, ZGN, GHRS, IR, BCC, DG, GIS, KNX, HOMB, UVV, CLBK, WABC, SION, INFY, CHRW, ORLY, HLN, RUSHA, JCAP, OCFC, HBNC, CFG, USPH, SBCF, BOX, MAGN, CLMT, IBM, VOD, VMD, PLD, MNSO, NDAQ, TCBK, T, ONB, NNN, AMCX, GOOD, PYPL and HFWA

Stocks With Unusual Call Option Activity:

• 1) OI 2) PLNT 3) ATAI 4) CHKP 5) FLG 

Stocks With Most Positive News Mentions:

• 1) ABT 2) ATAI 3) IQST 4) LCNB 5) MAN

Sector ETFs With Most Positive Money Flow:

• 1) SOXX 2) XLF 3) DRAM 4) XLV 5) SMH

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:

• (ALV)/2.46
• (FITB)/.84
• (RF)/.63
• (TRV)/5.36
• (TFC)/1.08 

After the Close: 

• None of note

Economic Releases 

 

8:30 am EST

• The Import Price Index MoM for June is estimated to fall -.6% versus a +1.9% gain in May.
• The Import Price Index Ex Petrol MoM for June is estimated to rise +.4% versus a +.8% gain in May.
• The Export Price Index MoM for June is estimated to decline -.6% versus a +1.3% gain in May.
• Housing Starts for June is estimated to rise to 1312K versus 1177K in May.
• Building Permits for June is estimated to fall to 1402K versus 1410K in May. 

9:15 am EST

• Industrial Production MoM for June is estimated to rise +.2% versus a +.1% gain in May.
• Manufacturing Production MoM for June is estimated to rise +.1% versus unch. in May.
• Capacity Utilization for June is estimated at 76.2% versus 76.2% in May. 

10:00 am EST

• Univ. of Mich. Consumer Sentiment for July is estimated to rise to 51.0 versus 49.5 in June.
• Univ. of Mich. 1Y Inflation Expectations Index for July is estimated to fall to +4.5% versus +4.6% in June. 

Upcoming Splits

• (SNEX) 3-for-2

Other Potential Market Movers

• The Atlanta Fed GDP Now Q2 update, weekly US 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 -7.1% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.9 +1.0
• 9 Sectors Rising, 2 Sectors Declining
• 56.0% of Issues Advancing, 42.0% Declining 
• TRIN/Arms 1.04 -12.6%
• Non-Block Money Flow +$32.4M
  
• 148 New 52-Week Highs, 28 New Lows
• 60.6% (+3.0%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 58.5 +2.3

Polymarket: 

• Will China invade Taiwan by end of 2026? 4.0% unch.
• Strait of Hormuz traffic returns to normal by August 31st 13.0% unch.
• Iran agrees to end enrichment of uranium by Sept. 30th 7.0% unch.
• Israel withdraws from Lebanon by August 31st 3.0% +1.0 percentage point
• US Invades Iran before 2027 24.0% +6.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 126.2 -.5%
• Global Monitor Iran Instability Index 54.0 -2.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 83.0% unch.
• US High-Yield Tech Sector OAS Index 453.75 +2.75 basis points
• Bloomberg Cyclicals/Defensives Index 260.7 -1.2%
• Morgan Stanley Growth vs Value Index 149.3 -4.0%
• CNN Fear & Greed Index 46.0 (NEUTRAL) +1.0
• 1-Day Vix 10.8 +4.8%
• Vix 16.2 +3.3%
  
• Total Put/Call .89 +6.0%

Thursday Watch

Around X:

• @Business  

• The global space economy is valued at $650 billion and Texas is betting big on this rapidly growing sector. So why this one particular state? And what exactly does all this business innovation mean for Texans? 
• A former adviser for the Federal Reserve Board of Governors was sentenced to more than three years in prison for lying to investigators looking into whether he shared confidential data with Chinese intelligence operatives, the Justice Department said.
• JPMorgan Chase Chief Executive Officer Jamie Dimon said the risks raised by Anthropic’s Mythos artificial intelligence model are a “real issue” that the US government is on top of now.

• @ZeroHedge

• "Asymmetric Warfare Boom" Accelerates As US Army Awards Neros $500 Million For FPV Attack Drones.
• Trump: Iran Has Freed Detained American Woman In 'Goodwill' Gesture, After Days Of Bombing.
• Inside The SpaceX AI1 Orbital Data Center: Can It Compete With Terrestrial? Here's The Full Math.
• Japan Trade Chief Says Hormuz Off-Limits As Hostilities Reignite.     
• *ANTHROPIC IN TALKS TO EXPAND $2.5B CREDIT LINE: INFORMATION.
• *S&P: ALBANY, NY GO DEBT RATING LOWERED TO 'A' FROM 'A+' ON REDUCED FINANCIAL FLEXIBILITY; OUTLOOK IS NEGATIVE.
• Increasing Number Of US Families Took On Debt, Tapped Savings To Meet Food Needs: Report.
• Pentagon Initiates 2nd Strike Wave Of Day After Iran Again Snubs Talks; US Disables Tanker Defying Blockade.
• Inside The Race To Fix America's Gas Pipelines Amid AI Center Boom.
• Toxic Wildfire Smoke Plume From Canada Will Blanket DC To NYC.      
• Why can’t Minnesota Attorney General Keith Ellison find the fraud? Because he's getting paid by the fraudsters. (video) 
• *KING STREET RESTRICTS CLIENT WITHDRAWALS FROM ITS HEDGE FUND.
• Bonds Bid & Hike-Odds Hammered On More Deflation; Memory Stocks Slammed As Mag7 Surges.  

• @CNBC 

• CNBC Daily Open: Big Tech rally drowns out Iran war fears — Buffett urges caution. 
• Bank of Korea raises rates to 2.75% in first hike in over three years.
• SK Hynix shares plunge 9% as Asia sees tech rout, tracking U.S. chip losses.
• Stock futures are little changed as traders await retail sales and labor data: Live updates.  
• Thursday's big stock stories: What’s likely to move the market in the next trading session. 
• United Airlines earnings top estimates but $6 billion in added fuel costs bites. 

• @WallStEngine

• Eli Lilly $LLY is reportedly in talks to acquire psychedelic drugmaker AtaiBeckley
  $ATAI, per Bloomberg. A deal could be announced as soon as this week. AtaiBeckley has a market value of about $2B, and Lilly is reportedly negotiating at a premium.
• Tech momentum just had its sharpest 17-day unwind in 27 years. The 17-day rate of change in the MS Tech Momentum factor is down about 35%, the worst reading in the data back to 1999. 
• J.B. HUNT $JBHT Q2’26 EARNINGS HIGHLIGHTS. Revenue: $3.50B (Est. $3.17B) ; +19% YoY. EPS: $1.91 (Est. $1.71) ; +45% YoY. Intermodal Revenue: $1.75B (Est. $1.49B) ; +22% YoY. 

• @MarioNawful

• JD Vance: Israel spent a fortune trying to blow up our Iran negotiations and smear anyone pursuing a deal. “When I open up the pages of Time magazine and see that there’s a literal foreign influence campaign being funded to tank the very deal that I was pursuing, and many of the people receiving that money were attacking me in completely dishonest ways, my response is: GO TO HELL!!”. (video)

• @ImBreckWorsham

• The uniparty special: The House just tied Voter ID to the US-Israel military merger in a 215-211 procedural vote. They know the SAVE Act can’t stand alone, so they’re forcing it onto the NDAA. Accept the defense bill, or you don’t get voter ID. Your treasonous government at work.

• @WarClandestine

• Obama’s Chief strategist just spilled the beans, and revealed exactly what it is the traitors are afraid of. They are afraid Trump is going to release evidence of fraud in 2020, which Trump will use to declare a state of emergency, and exercise Executive power to secure the 2026 midterms. They are TERRIFIED of whatever evidence Trump and his Intelligence heads are about to present on Thursday, and they are all desperate to preemptively establish the narrative that the evidence is not real, and that securing our elections is some sort of violation of democracy. PANIC IN DC!

• @abhiramgarapat2

• In an episode of The Joe Rogan Experience, Vice President JD Vance further corroborated that Jeffrey Epstein had close ties to both political parties in the United States, as well as powerful connections at the CIA and Mossad. The American people deserve to know the truth regarding Jeffrey Epstein, and the victims deserve to see justice. If current or former elected or appointed officials in government, or powerful business leaders with sensitive government contracts or serving on government advisory boards, are subject to or have been subject to blackmail by domestic or foreign intelligence, which this certainly raises further suspicion of, the American people deserve to know. (video)

• @ShadowofEzra

• Todd Blanche testified under oath that this administration has been the most transparent and has complied with the law regarding Jeffrey Epstein. Blanche believes Epstein had no client list, did not blackmail anyone, Pizzagate is a hoax, Israel was not involved, and there were no hidden cameras in Epstein's homes. Todd Blanche has been endorsed by Pam Bondi to serve as the next Attorney General. (video)

• @TheKJofTikTok

• Joe Rogan tells JD Vance, "I think they(Democrats) cheat." 9 elections have been overturned since 2020 due to Democrat fraud. Not one of these elections came at the hands of Republicans, but Democrats fraudulently using mail-in ballots. Joe doesn't have to just think it. We literally have evidence. How many elections have to be overturned before we acknowledge that voter fraud is pervasive, ubiquitous even. (video)

• @TonySeruga 

• TRUMP JUST REPOSTED JFK’S MOST TERRIFYING SPEECH — AND THE DEEP STATE IS PANICKING. JFK saw it coming. In 1961. And now, Trump has just made sure 300 million Americans see it, too. The speech everyone’s talking about: Kennedy’s address to the American Newspaper Publishers Association, April 27, 1961. The CIA had just botched the Bay of Pigs. Kennedy was livid. He’d been lied to by his own intelligence apparatus. And he walked onto that stage and said something no president has dared say since. “We are opposed around the world by a monolithic and ruthless conspiracy that relies primarily on covert means for expanding its sphere of influence — on infiltration instead of invasion, on subversion instead of elections, on intimidation instead of free choice.” Read that again. Monolithic. Ruthless. Conspiracy. (video)

• @TomiLahren

• We are being betrayed in real time. If you want Trump voters to stay home in November, keep this up, Markwayne and co. (video)

• @Peoples_Pundit

• Breanna 100% correct. Amy Coney Barrett should step down after this testimony. She just admitted she's shook and it clearly impacts her decisions. That's FEAR on her face. (video)

• @GeneralMCNews

• BREAKING: Benjamin Netanyahu will attend Lindsey Graham's funeral in Washington, D.C., where he also plans to meet with President Trump with a list of demands.

• @StockSavvyShay

• $NVDA and Toyota are expanding their partnership into robotics, digital-twin factories and smart-city infrastructure. Toyota will use Nvidia Drive for next-generation L2+ vehicles while deploying Omniverse and Nemotron across manufacturing and automotive software development.

• @CollinRugg

• The widow of Corey Comperatore says she has reason to believe that the assassination attempt in Butler, which took the life of her husband, was an inside job. Helen Comperatore is pleading with Trump to do something and says she won't have closure until the people responsible are thrown in prison. Comperatore says she believes Thomas Crooks had help from someone inside the government. "He didn’t just get up that day and go do it," she said. "I've been told things... but I've had something that happened with me that afterwards, and you're starting to put the pieces together, it just made total sense." (video)

• @Hedgevision

• The Top Hedge Funds of 2026 (So Far). Stock-pickers dominated the list, highlighted by Whale Rock at 72.5%. Tiger Cubs also made their presence known. Of the top 10 funds, Tiger Cubs took home three spots. Lone Pine led the pack with a 43% return. Light Street, the top-performing Tiger Cub of 2025, trailed behind at 37%. (pic)

• @IGraceAshford

• Donald Trump wants Tyler Robinson indicted, full stop. He wants nobody to dig further into who really killed Charlie Kirk. He sent Don Jr. to sit in the front row on the first day of the preliminary hearing so his presence would pressure judges and officials to stick to the script. The same Don Jr. is giving interviews saying the evidence against Tyler Robinson is “overwhelming.” (video)

Night Trading 

• Asian equity indices are -2.5% to -.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 69.25 -.75 basis point. 
• China Sovereign CDS 37.25 +.25 basis point.
• China Iron Ore Spot 99.70 USD/Metric Tonne -.7%. 
• Crude Oil 80.12/bbl. +.7% 
• Gold 4,034.50 USD/t oz. -.43%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.40 +.08%.
• Bloomberg Emerging Markets Currency Index 34.68 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 126.7 -.1%.
• US 10-Year Yield 4.56% +1.0 basis point.
• Japan 30-Year Yield 3.80% +3.0 basis points. 
• Volatility Index(VIX) futures 18.14 +.5%.
• Euro Stoxx 50 futures +.03%. 
• S&P 500 futures +.05%.
• NASDAQ 100 futures -.06%.

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 modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.