Tuesday Watch

Around X:

• @Business

• President Trump said Monday the US and Iran were engaged in diplomatic talks to end the Middle East conflict, but warned the two sides would return to fighting if negotiations didn’t yield a deal. 
• The number of software security flaws discovered in popular technology products in 2026 is on pace to roughly double the tally of vulnerabilities that surfaced in 2025 
• BlackRock wrapped up a $12.5 billion bond sale tied to a Meta data center project in Texas after a nearly week-long marketing process and a selloff in big tech debt. 
• Union Pacific and Norfolk submitted a revised merger application to regulators that they say offers greater protections to customers, a move by the railroads to help complete what stands to be the industry’s biggest-ever deal. 
• Here’s the latest news and analysis on the oil market. 
• Get up to speed on what's moving global markets.
• Here’s what you need to know to start your day.    

• @ZeroHedge

• Utility Profits In The Crosshairs Amid Affordability Concerns. 
• *JAPAN'S NIKKEI, SOUTH KOREA'S KOSPI TUMBLE AS CHIP SHARES SLUMP.
• After some modest strength in recent days, bitcoin approaching key support level again.
• The cartoon "market" that is Korea is back at it. *SOUTH KOREA'S KOSPI INDEX FALLS 6.1% TO 6,343.87. *KOREA EXCHANGE ACTIVATES SIDECAR TO HALT KOSDAQ PROGRAM SELLING.
• Anthropic maintains that it is entitled to train for free on all the world’s output, even if the author objects. But if a competitor trains on Anthropic’s output after paying for it, that is IP theft. The hypocrisy is breathtaking.
• The Left Is Using Kids As A Trojan Horse For Total Online Surveillance.
• Taxpayer Millions Couldn't Stop Seven Save A Lot Grocery Stores From Going Dark In Crime-Ridden Chicago.
• "Mitch McConnell" Pokes Head Out Of Shell With New 'Proof Of Life' Pic From Rehab.
• Putin Admits Escalation: Enemies Unable To Defeat Russia On Battlefield, Resort To 'Open Terrorism'.
• Renewables 'Can't Keep Up' With Data Center Pace. As Usual, The Left Wants Government To Step In....
• 'Close To An Inflection Point': Deutsche Bank Simplifies WTF Is Happening In Japan.
• Court Rules Illinois' In-State Tuition Benefits For Illegals 'Unconstitutional And Invalid'.
• Will The "Fat Lady" Finally Sing For Fauci?
• If Anthony Fauci lies before Congress on Wednesday, as he did in previous hearings, his preemptive pardon won’t cover him. 
• While Americans buried loved ones, Anthony Fauci was counting headlines that doted over him. Absolutely vile. 
• Stocks Sink Despite Hormuz Hopes As China Sparks Chipmaker Chunder Into Busy Week.

• @CNBC 

• CNBC Daily Open: Apple reclaims its crown, SpaceX returns to Earth. 
• South Korean semiconductor shares tumbled on Tuesday, extending a rout in chipmakers after another weak session on Wall Street. SK Hynix plunged more than 10%, while Samsung Electronics fell over 8%. Other AI-linked names also came under heavy selling, with Samsung SDI dropping over 7%, LG Innotek sliding nearly 14%, Seoul Semiconductor falling about 6% and LG Chem losing more than 4%. 
• Anthropic CEO Dario Amodei says AI company isn't advocating for ban of open-weight models.       
• So far, about 7 million children have been signed up, Bessent said.
• Tuesday's big stock stories: What’s likely to move the market in the next trading session.
• Stock futures are little changed after Dow posts back-to-back winning days: Live updates.
• Stocks making the biggest moves after hours: Cadence Design Systems, Rambus, Welltower and more.      

• @WallStEngine

• Citadel Securities expects Fed Chair Kevin Warsh and the Federal Reserve to raise rates by 25 bps on Wednesday. The firm says markets may be underestimating the Fed’s hawkish shift and that a surprise hike would strengthen its inflation-fighting credibility. Interest-rate swaps currently price about a 40% chance of a hike this week, with a full hike priced in by September. Citadel says recent energy-price increases could tip the balance toward an immediate move.
• BlackRock $BLK has raised $12.5 billion of debt to fund $META's 1GW AI data center campus in El Paso, Texas. The 2048 notes priced 287.5 basis points over 10-year Treasuries and attracted about $20 billion in orders, only 1.6x the offering size. BlackRock-backed entities own 80% of the project and Meta owns 20%. The debt is supported by Meta’s lease commitments while remaining off Meta’s balance sheet. 
• Johnson & Johnson $JNJ has agreed to pay $5.5 billion to resolve claims that its talc products caused ovarian cancer. The proposed settlement requires participation from plaintiff firms representing at least 95% of pending state and federal claims. J&J maintains it would have prevailed in further litigation but says the agreement would bring the matter to a close. 
• CELESTICA $CLS Q2’26 EARNINGS HIGHLIGHTS. Revenue: $4.70B (Est. $4.37B) ; +62% YoY. Adj. EPS: $2.54 (Est. $2.29) ; +83% YoY. Adjusted Operating Margin: 8.2%; +80 bps YoY. Raises FY26 Guide: Revenue: $20.5B (Est. $19.15B) ; raised from $19.0B. Adj. EPS: $11.30 (Est. $10.19) ; raised from $10.15. Adjusted Operating Margin: 8.4%; raised from 8.1%. Free Cash Flow: $600M; raised from $500M. 
• F5 $FFIV Q3’26 EARNINGS HIGHLIGHTS. Revenue: $865.0M (Est. $833.62M) ; +11% YoY. Adj. EPS: $4.73 (Est. $4.00) ; +14% YoY. Product Revenue: $462.8M; +19% YoY. Raises FY26 Guide: Revenue Growth: ~9% to 10%; raised from 7% to 8% previously. Adj. EPS: $17.21-$17.33; raised from $16.25-$16.55. 
• CADENCE $CDNS Q2’26 EARNINGS HIGHLIGHTS. Revenue: $1.58B (Est. $1.58B) ; +24% YoY. Adj. EPS: $2.11 (Est. $2.06) ; +28% YoY. Backlog: $8.1B; record backlog. Non-GAAP Operating Margin: 45.5%; +270 bps YoY. Raises FY26 Guide: Revenue: $6.26B-$6.34B (Est. $6.22B). Non-GAAP EPS: $8.05-$8.15 (Est. $7.99). Non-GAAP Operating Margin: 43.75% to 44.75%. Operating Cash Flow: ~$2B. 

• @MerengoFS

• Corning(GLW) Earnings preview highlights.
• Bloom Energy(BE) Earnings preview highlights. 

Night Trading 

• Asian equity indices are -3.5% to -.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 70.5 -.5 basis point. 
• China Sovereign CDS 38.5 +.5 basis point.
• China Iron Ore Spot 97.80 USD/Metric Tonne -.03%. 
• Crude Oil 81.92/bbl. -.8% 
• Gold 4,106.20 USD/t oz. -.7%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.26 -.06%.
• Bloomberg Emerging Markets Currency Index 34.47 -.07%.
• Bloomberg Global Risk-On/Risk Off Index 123.3 -.5%.
• US 10-Year Yield 4.64% -1.0 basis point.
• Japan 30-Year Yield 3.97% -2.0 basis points.
• Volatility Index(VIX) futures 19.3 +.6%.
• Euro Stoxx 50 futures -.08%. 
• S&P 500 futures -.08%.
• NASDAQ 100 futures -.40%.

Morning Preview Links

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