Stocks Reversing Lower into Final Hour on Global Supply Chain Disruption Fears, Higher Long-Term Rates, Profit-Taking, Tech/Construction Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 53.3 +1.2%
• BofA Private Credit Proxy Index 76.6 -.9% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .22 -2.0 basis points
• BofA Global Financial Stress Indicator -.09 -6.0 basis points
• European Financial Sector CDS Index 59.2 +.8%
• Emerging Market CDS Index 157.0 +1.4%
• Israel Sovereign CDS 62.3 -.3% 
• Bloomberg Global Trade Policy Uncertainty Index .9 unch.
• US Morning Consult Daily Consume Sentiment Index 88.3 +.9

• Citi US Economic Surprise Index 34.7 +1.7

• Citi Eurozone Economic Surprise Index -57.0 +5.8

• Citi Emerging Markets Economic Surprise Index 53.2 +2.8
• S&P 500 Current Quarter EPS Growth Rate YoY(423 of 500 reporting) +25.5% -.2 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 352.15 +.74:  Growth Rate +27.1% +.3 percentage point, P/E 20.9 unch.
• S&P 500 Current Year Estimated Profit Margin 15.36% +3.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +62.1% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 850.43 +1.77: Growth Rate +114.8% +.4 percentage point, P/E 19.9 +.1 
• Bloomberg US Financial Conditions Index 1.03 +3.0 basis points
• US Yield Curve 47.5 basis points (2s/10s) -1.0 basis point
• Bloomberg Industrial Metal Index 180.1 -.1%
• Dutch TTF Nat Gas(European benchmark) 44.1 euros/megawatt-hour +.4% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 17.8% unch.
• US Atlanta Fed GDPNow Q2 Forecast +3.7% unch.
• US 10-Year T-Note Yield 4.39% +4.0 basis points
• 1-Year TIPS Spread 3.0 -5.0 basis points

• Highest target rate probability for July 29th FOMC meeting: 90.7% (+4.2 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 90.0%(+6.0 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -499 open in Japan 
• China A50 Futures: Indicating -157 open in China

• DAX Futures: Indicating -88 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/biotech/industrial/consumer discretionary/energy sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 75% Net Long

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

Earnings of Note 
Company/Estimate 

Before the Open:

• (AMR)/-.36
• (ROAD)/-.03
• (EMBJ)/.25
• (FLR)/.62
• (OSK)/1.04
• (PPL)/.62
• (WEN)/.10 

After the Close: 

• None of note

Economic Releases 

8:30 am EST

• The Change in Non-Farm Payrolls for April is estimated to fall to 65K versus 178K in March.
• Average Hourly Earnings MoM for April is estimated to rise +.3% versus a +.2% gain in March.
• The Unemployment Rate for April is estimated at 4.3% versus 4.3% in March.  

10:00 am EST

• The Univ. of Mich. Consumer Sentiment Index for May is estimated to fall to 49.5 versus 4.3% in April. 
• The Univ. of Mich. 1Y Inflation Expectations Index for May is estimated to rise to 4.8% versus 4.7% in April. 
• Wholesale Trade Sales MoM for March is estimated to rise +1.6% versus a +2.7% gain in April. 

Upcoming Splits

• (CVNA) 5-for-1 

Other Potential Market Movers

• The Fed's Cook speaking, Fed's Waller speaking, Fed's Bowman speaking, (MAS) annual meeting, (TER) annual meeting, (TKR) annual meeting, (VMC) annual meeting, (ABBV) annual meeting, (CL) annual meeting, (COF) annual meeting, (CNH) annual meeting, (URI) annual meeting, (ITW) annual meeting and the (MAR) annual meeting could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Thursday Watch

Around X:

• @Business  

• EXCLUSIVE: China advises its largest banks to temporarily halt new loans to five US-sanctioned refiners over ties to Iranian oil.
• The Israeli army carried out an attack in the southern suburbs of Beirut on Wednesday, the first in the vicinity of the Lebanese capital since a US-brokered ceasefire came into effect last month. 
• South Korea’s equity market has overtaken Canada’s as the world’s seventh largest, propelled by insatiable demand for chips powering artificial intelligence.
• Fertilizer makers CF and Nutrien each reported nearly 20% jumps in sales for the latest quarter, showing the extent of the Iran war’s upheaval on supply chains for the key crop nutrients. 
• Fortinet shares rose as much as 24% in post-market trading after the cybersecurity company raised its full-year revenue outlook above expectations, following its largest billings expansion in over three years. 
• Get up to speed on what's moving global markets.
• Here’s what you need to know to start your day.   

• @ZeroHedge

• The mainstream media is now confirming we are being robbed at grocery stores and Walmart. Product after product they take off the shelves and weigh is always short. They test Walmart shrimp, bring it to the studio and every bag is half a pound short. This has to be an intentionally large scale scam to defraud Americans at the grocery store. One or two items is a mistake. Every item they pull off the shelves being underweight at specific locations is fraud. And the amount products are underweight isn’t a small amount, it’s a huge amount. We are being robbed blind. (video)
• High Yield Recovery Rates Plunge To 35%, Down 16% From A Year Ago And Lowest Since COVID.
• Canadian Prime Minister Is Playing A Very Dangerous Game. 
• The physical North Sea oil market has weakened further, with Dated Brent down to $104 (down ~10% in one day). More importantly, physical differentials have narrowed further, with premia at $0-$2 a barrel range, lowest since the early days of the war. The message? Plenty of oil.
• DOJ said it uncovered evidence that the UCLA medical school intentionally and illegally selected applicants based on their race.
• Scientists Reveal Time Travel Could Work.
• Dot-Com Energy is back. SOX weekly RSI just hit levels not seen since March 2000.
• NOAA OKs First Deep-Sea Mining Plan For Critical Minerals In Pacific Ocean.
• Indiana Primary: Senate Incumbents Crushed By Trump-Backed Challengers.
• Iran Oil Official In Surprise Admission: 'Fate Of Our Refineries Now At Risk' As US Blockade Begins To Bite.
• Anthropocalyptic.....Anthropic's pre-IPO valuation surges to a record $1.2 trillion. This officially puts Anthropic's implied valuation up +900% since October 2025. 9th most valuable public company in the world.
• DC Police Officials Disciplined Over Allegations Of Manipulating Crime Data.
• Elon has been the longest and by far the biggest voice actively warning about the dangers of AI for a very long time. The entire reason he started OpenAI was this one thing.....to make sure AI is built for the good of humanity and not against it. Last week he took it a step further. He personally went and met with senior members of the Anthropic team to understand how they are working towards AI safety. He offered them compute on Colossus 1 only after he was sure they’re doing it right - before ending their suffering for the lack of compute and the bad PR for the last three months. The relief was instant. Anthropic immediately relaxed rate limits for all Claude users and completely removed peak time restrictions. This is exactly why Elon is the one who should be guiding us through the AI era.        
• Gold Jumps, Dollar Dumps As AMD & Imminent Iran Deal Lift Stocks & Bonds, Sink Oil.

• @CNBC

• Thursday's big stock stories: What’s likely to move the market in the next trading session.
• Asia-Pacific markets set to climb as traders weigh Trump’s Iran threats against peace hopes.
• Berkshire Hathaway subsidiary McLane is planning to deploy self-driving trucking technology from Aurora Innovation on routes in Texas and across the U.S. Sun Belt by the end of the year, expanding on an autonomous freight pilot program the companies began in 2023.
• Stock futures are flat after the S&P 500 posts another record; traders eye developments in Iran: Live updates.
• Anthropic CEO says 80-fold growth in first quarter explains 'difficulties with compute'.
• Stocks making the biggest moves after hours: DoorDash, Zillow Group, ARM Holdings, Fortinet and more.           

• @TheTranscript 

• Albermarle CEO: "Albemarle achieved year-over-year sales growth of more than 15% in the fourth quarter, as well as strong full-year cash flow generation and significant cost and productivity improvements." $ALB: +7% AH.
• DoorDash CEO: "We had a strong start to 2026, with rigorous execution across our business...a new high for monthly active users, and strong consumer engagement across our marketplaces." $DASH: +12% AH.
• AppLovin duble beat. $APP: -3% AH. 
• Arm CEO: "As AI becomes more agentic, demand for Arm AGI CPU, Arm’s first data center chip, has exceeded expectations, reinforcing Arm as the compute platform for the AI era" $ARM: +10% AH.

Night Trading 

• Asian equity indices are +.5% to +1.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 72.5 -2.25 basis points. 
• China Sovereign CDS 41.75 -1.0 basis point.
• China Iron Ore Spot 110.3 USD/Metric Tonne -.2%. 
• Crude Oil 95.61/bbl. +.6% 
• Gold 4,712.5 USD/t oz. +.39%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.74 +.12%.
• Bloomberg Emerging Markets Currency Index 35.60 unch.
• Bloomberg Global Risk-On/Risk Off Index 118.3 +1.4%
• US 10-Year Yield 4.35% unch.
• Japan 30-Year Yield 3.73% -2.0 basis points. 
• Volatility Index(VIX) futures 20.6 -.6%.
• Euro Stoxx 50 futures +.05%. 
• S&P 500 futures -.05%.
• NASDAQ 100 futures -.17%.

Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by transport and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 100% net long heading into the day.

Stocks Surging into Final Hour on Mideast War Resolution Hopes, Earnings Outlook Optimism, Falling Long-Term Rates, Tech/Transport Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 52.6 -2.5%
• BofA Private Credit Proxy Index 77.1 -1.5% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .24 -1.0 basis point
• BofA Global Financial Stress Indicator -.03 -4.0 basis points
• European Financial Sector CDS Index 58.7 -3.8%
• Emerging Market CDS Index 154.8 -3.7%
• Israel Sovereign CDS 63.4 -4.6% 
• Bloomberg Global Trade Policy Uncertainty Index .9 unch.
• US Morning Consult Daily Consume Sentiment Index 87.4 +.1

• Citi US Economic Surprise Index 33.0 -.9

• Citi Eurozone Economic Surprise Index -62.8 +1.1

• Citi Emerging Markets Economic Surprise Index 50.4 +.4
• S&P 500 Current Quarter EPS Growth Rate YoY(391 of 500 reporting) +25.7% -1.1 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 351.41 +1.15:  Growth Rate +26.8% +.4 percentage point, P/E 20.9 +.2
• S&P 500 Current Year Estimated Profit Margin 15.33% +3.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +62.1% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 848.66 +4.42: Growth Rate +114.4% +1.2 percentage points, P/E 19.8 +.1 
• Bloomberg US Financial Conditions Index 1.00 +7.0 basis points
• US Yield Curve 48.5 basis points (2s/10s) +.75 basis point
• Bloomberg Industrial Metal Index 180.3 +.5%
• Dutch TTF Nat Gas(European benchmark) 43.7 euros/megawatt-hour -6.9% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 17.8% +1.3 percentage points
• US Atlanta Fed GDPNow Q2 Forecast +3.7% unch.
• US 10-Year T-Note Yield 4.35% -8.0 basis points
• 1-Year TIPS Spread 3.05 -18.0 basis points

• Highest target rate probability for July 29th FOMC meeting: 86.0% (-2.4 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 83.6%(-3.0 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +2,552 open in Japan 
• China A50 Futures: Indicating +54 open in China

• DAX Futures: Indicating +131 open in Germany

Portfolio:

• Higher: On gains in my tech/biotech/industrial/consumer discretionary sector longs
• Disclosed Trades: None 
• Market Exposure: 100% Net Long

Bear Radar

 Style Underperformer:

• Mid-Cap Value +1.0%

Sector Underperformers:

• 1) Energy -5.5% 2) Oil Service -2.4% 3) Networking -1.2%

Stocks Falling on Unusual Volume: 

• SOLS, PBI, PUMP, QDEL, FCEL, LITE, RSI, INGM, AMWD, QSR, WK, CEPT, INMD, MCK, LWLG, HURN, OBE, CLH, RIGL, MRX, QRVO, MDLN, SEDG, PMT, TSLX, UPST, PODD, PARR, MRP, ACEL, CE, J, KD, CART, SWKS, PLOW, FRPT, ALC, FUBO, SLRC, CRK, ACIC, CPNG, PRM, RVLV, ANDE, EVER, BFAM, ANET, CC, DLX, COR, TECH, CDW, CRTO, NICE, AZTA, TMDX and KVYO

Stocks With Unusual Put Option Activity:

• 1) UWMC 2) ARKG 3) SOLS 4) TMDX 5) CPNG

Stocks With Most Negative News Mentions:

• 1) PRIM 2) COR 3) LAW 4) SMRT 5) ATOM

Sector ETFs With Most Negative Money Flow:

• 1) XLF 2) SMH 3) XLV 4) XBI 5) FDN

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.4%

Sector Outperformers:

• 1) Gold & Silver +7.1% 2) Computer Hardware +6.2% 3) Airlines +6.1%

Stocks Rising on Unusual Volume:

• OSS, FLEX, HUT, AVTX, VCYT, NNE, GEO, VECO, DVA, FLYW, DOC, SMCI, ACLS, IFF, AMD, SHAZ, SII, WOLF, KMT, OKLO, MRAM, GLW, RIOT, AOSL, LIVN, LTH, URGN, ARM, UAMY, TGTX, INFQ, BV, TX, ALOY, BIDU, TKR, IREN, IPX, IONQ, CORZ, IPGP, FLY, OSCR, BMA, LAR, CGNT, UMC, ELAN, QUBT, UBER, WYFI, NBIX, CVS, EXEL, DIS, HNGE, TGS, HEI, TIC, BABA, XNDU, CLYM, LFUS, MP, VSH, JBGS, CGNX, HNRG, XIFR, GPK, MRCY, DXYZ, FLS, ESTA, ONC, IART, SUPN, BETA, QCOM, FMS, ADEA, BALL, PENG, CRML, CLX, REYN, AYA, KNX, ADPT, INBX, RMAX, SGRY, DSGN, ARW, RMAX, DSGN, SANM, SONY and CRYX

Stocks With Unusual Call Option Activity:

• 1) ARKG 2) OSS 3) MAR 4) XIFR 5) ATOM 

Stocks With Most Positive News Mentions:

• 1) AMD 2) ARM 3) FLEX 4) COMP 5) DVA

Sector ETFs With Most Positive Money Flow:

• 1) IGV 2) XLE 3) DRAM 4) BAI 5) XLK

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume