Stocks Soaring into Final Hour on Mideast War Resolution Hopes, Diminishing War-Induced Inflation Worries, Earnings Outlook Optimism, Tech/Alt Energy Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.7 -1.2%
• BofA Private Credit Proxy Index 71.3 +1.7% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .30 -3.0 basis points
• BofA Global Financial Stress Indicator -.05 -8.0 basis points
• European Financial Sector CDS Index 53.0 -1.5%
• Emerging Market CDS Index 140.0 -1.2%
• Israel Sovereign CDS 58.3 -1.0% 
• Bloomberg Global Trade Policy Uncertainty Index .6 -.2
• US Morning Consult Daily Consume Sentiment Index 89.3 +1.3

• Citi US Economic Surprise Index 33.8 -6.7

• Citi Eurozone Economic Surprise Index 61.5 -.7

• Citi Emerging Markets Economic Surprise Index 26.4 -.4
• S&P 500 Current Quarter EPS Growth Rate YoY(353 of 500 reporting) +55.1% -3.6 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 384.28 +.75:  Growth Rate +30.6% +.2 percentage point, P/E 20.1 +.3
• S&P 500 Current Year Estimated Profit Margin 16.17% +2.0 basis  points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +138.4% +.1 percentage point
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 928.39 +1.82: Growth Rate +79.0% +.3 percentage point, P/E 19.9 +.8 
• Bloomberg US Financial Conditions Index 1.13 unch.
• US Yield Curve 43.25 basis points (2s/10s) +.5 basis point
• Bloomberg Industrial Metal Index 179.5 +1.0%
• Dutch TTF Nat Gas(European benchmark) 55.1 euros/megawatt-hour -4.2%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.6% +1.1 percentage points
• US Atlanta Fed GDPNow Q3 Forecast +5.9% -30.0 basis points
• US 10-Year T-Note Yield 4.62% -5.0 basis points
• 1-Year TIPS Spread 1.60 -9.0 basis points

• Highest target rate probability for Oct. 28th FOMC meeting: 53.2% (-4.1 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 44.1%(+1.6 percentage points) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +1,530 open in Japan 
• China A50 Futures: Indicating -60 open in China
• KOSPI 200 Futures: Indicating +58 open in South Korea 

• DAX Futures: Indicating +182 open in Germany

Portfolio:

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

Bear Radar

Style Underperformer:

• Large-Cap Value +1.0%

Sector Underperformers:

• 1) Shipping -.8% 2) Energy -.7% 3) Healthcare Providers -.7%

Stocks Falling on Unusual Volume: 

• VCX, POWL, DQ, FIS, VERA, STVN, SHIP, SNN, UCTT, AXTI, FMS, BRBR, RYZ, EYPT, NVO, TKR, SUPN, NVCT, ROK, VST, CMG, CBT, VVX, STRL, CIFR, ICHR, KNF, VERX, ULS, CLPT, APTV, NRG, AIN, JBGS, CTRI, BRKR, REZI and BETR

Stocks With Unusual Put Option Activity:

• 1) RIG 2) WMB 3) TENX 4) METC 5) XOP

Stocks With Most Negative News Mentions:

• 1) CIFR 2) AHCO 3) PODD 4) IBRX 5) COP

Sector ETFs With Most Negative Money Flow:

• 1) PAVE 2) AIQ 3) XLE 4) VGT 5) XLC

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +3.1%

Sector Outperformers:

• 1) Space +7.5% 2) Semis +6.8% 3) AI Innovation +6.7%

Stocks Rising on Unusual Volume:

• BLZE, TSAT, PAY, W, PLTR, LIFE, ORIC, UFPT, AMRC, ZBRA, AAOI, IT, VOYG, INSP, PSIX, AEHR, WIX, INVX, FN, TDW, AEIS, ADEA, COHR, EWTX, DORM, WHR, BETA, BRSL, WLK, AYA, GMTL, SNDK, JBIO, TTMI, VGNT, LIME, SHAZ, BELFB, AMLX, COGT, GLW, ENLT, ALOY, MP, HRMY, PRLB, IE, LDOS, FPS, MAIR, QXO, KC, YSS, PPLI, CRWV, CLS, GNRC, LSCC, IPGP, MDA, RELL, WT, FIG, ANDE, LGIH, NET, BR, NBIS, TREX, ZETA, FND, DFH, CAT, LBRX, TPG, NN, ALSN, MNTN, VSAT, XMTR, STEP, JXN, WFG, U, OFRM, CTOS, WGS, BE, WAT, CLX, GLUE, GFS, PLOW, RTO, TSEM, OSK, MTUS, RYTM, MKSI, IDXX, SN, TRI, NSIT, TDS, YSWY, BIOA, EXPD, FSLR, CSTL, BTDR, ELVN, COAG, GHRS, SION, OWL, GPK, FSK, CUBI, ORCL, HAYW, PESI, MEC, SRAD, SBAC, SBH, JAZZ, BBNX, MGA, CLW and MMYT

Stocks With Unusual Call Option Activity:

• 1) VSAT 2) FISV 3) AZN 4) INO 5) SRAD 

Stocks With Most Positive News Mentions:

• 1) PLTR 2) BLZE 3) W 4) LITE 5) LIFE

Sector ETFs With Most Positive Money Flow:

• 1) DRAM 2) AMLP 3) XLV 4) FDN 5) XLY

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:

• (AVT)/1.80
• (BLMN)/.29
• (BWA)/1.28
• (CG)/.91
• (CDW)/2.80
• (COR)/4.35
• (CRL)/2.74
• (CHH)/1.97
• (CRCL)/.16
• (CVS)/1.85
• (ELAN)/.27
• (LLY)/6.01
• (FLUT)/.54
• (GPN)/3.44
• (IRM)/1.42
• (KMT)/2.31
• (LPX)/.57
• (NICE)/2.64
• (OC)/3.09
• (PSX)/7.50
• (SHAK)/.31
• (SN)/1.11
• (SHOP)/.40
• (SEDG)/-.02
• (WULF)/-.24
• (UBER)/.80
• (UTHR)/6.86
• (VSH)/.15
• (DIS)/1.86
• (ZBH)/2.01 

After the Close: 

• (ALB)/3.20
• (ALL)/6.06
• (AMSC)/.20
• (APA)/1.90
• (APP)/3.76
• (AXON)/1.84
• (XYZ)/.87
• (CACI)/7.26
• (LEU)/.80
• (CF)/5.63
• (CRUS)/1.81
• (CGNX)/.42
• (CPY)/6.58
• (CW)/3.61
• (DAVE)/3.44
• (DASH)/.47
• (DUOL)/.60
• (BROS)/.29
• (ELF)/.72
• (EBAY)/1.50
• (EHC)/1.48
• (ETSY)/.75
• (EXPE)/5.22
• (FWRD)/-.15
• (GT)/-.62
• (HST)/.62
• (HUBS)/3.02
• (IONQ)/-.56
• (JOBY)/-.23
• (KLIC)/1.06
• (MCK)/9.56
• (MELI)/8.67
• (MET)/2.30
• (MKSI)/2.91
• (NWSA)/.24
• (SMR)/-.13
• (OXY)/1.83
• (POWI)/.32
• (QGEN)/.60
• (RVMD)/-2.04
• (RGLD)/2.55
• (SNDK)/34.80
• (SITM)/1.95
• (STE)/2.49
• (SYM)/.13
• (RIG)/.01
• (VECO)/.26
• (WDC)/3.31
• (ZG)/.45 

Economic Releases 

8:15 am EST

• The ADP Employment Change for July is estimated to fall to 65K versus 98K in June. 

10:00 am EST 

• The ISM Services Index for July is estimated to rise to 54.5 versus 54.0 in June.
• ISM Services Prices Paid for July is estimated to fall to 65.0 versus 67.7 in June. 

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,389,170 barrels versus a -7,167,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,531,000 barrels versus a +7,000 barrel gain the prior week. Distillate inventories are estimated to fall by -77,170K barrels versus a +1,062,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.5% versus a +1.1% gain prior. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Cook speaking, weekly MBA Mortgage Applications report, (HUM) BofA client meetings and the (FLEX) annual meeting 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 +7.2% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 16.6 -4.3
• 5 Sectors Rising, 6 Sectors Declining
• 68.0% of Issues Advancing, 30.0% Declining 
• TRIN/Arms 1.11 +.9%
• Non-Block Money Flow +$96.9M
  
• 118 New 52-Week Highs, 25 New Lows
• 61.7% (+2.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 66.7 +6.5

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 10.0% unch.
• Strait of Hormuz traffic returns to normal by August 31st 18.0% +5.0 percentage points
• Iran agrees to end enrichment of uranium by Sept. 30th 10.0% unch.
• Israel withdraws from Lebanon by August 31st 1.0% -1.0 percent
• US Invades Iran before 2027 20.0% -1.0 percentage point
• US announces end of Iranian blockade by August 31st 75.0% +20.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 125.6 -.2%
• Global Monitor Iran Instability Index 62.0 +7.0 points
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 90.0% unch.
• US High-Yield Tech Sector OAS Index 421.0 -19.0 basis points
• Bloomberg Cyclicals/Defensives Index 270.6 +1.0%
• Morgan Stanley Growth vs Value Index 149.7 +2.5%
• CNN Fear & Greed Index 58.0 (Moved to GREED from NEUTRAL) +13.0
• 1-Day Vix 10.6 +12.2%
• Vix 16.2% +2.4%
• Total Put/Call .65 -16.7%

Tuesday Watch

Around X:

• @Business

• China is growing anxious that Anthropic’s Mythos could be wielded against the world’s second-biggest economy, adding a volatile new issue to already heightened tensions before a planned summit between Xi Jinping and Trump. 
• South Korea's selloff and the government’s clumsy attempt to lift the Kospi have traumatized a new class of investors and stigmatized the market. 
• Insurers are turning to catastrophe bonds to pass on historic levels of wildfire risk to the capital markets.
• Aschenbrenner’s thesis went down, so he lost money on the longs and the shorts. He had no hedge for that. 
• The farm machinery sector is primed for a rebound in 2027 as the current fleet ages and prompts growers to upgrade, according to tractor maker CNH. 
• Multistrategy hedge fund giant Millennium Management lost 2.1% last month as a selloff in artificial intelligence stocks took a toll on equity portfolios.
• Amazon's cloud chief said customers are shifting from training AI models to integrating them into their businesses, boosting demand for inference. 
• Here’s what you need to know to start your day.
• Get up to speed on what's moving global markets.   

• @ZeroHedge

• The Pentagon's Hidden Housing Scandal: Outsourcing Duty Of Care.
• "I No Longer Trust Anyone..."
• All You Need To Know About The Record Yen Intervention: Why Wall Street Thinks $100 Billion In Not Enough.
• SpaceX In "Final Stages" Of Securing New Massive Rocket Launch Site In Louisiana. 
• Children's Hospitals To Begin Offering Restorative Care For Detransitioners.
• #3. *COATUE’S HEDGE FUND SINKS 8% IN WORST DROP IN MORE THAN A YEAR. Plenty more TRS cockroaches to come.
• 'They Are United': California Democrats Move Forward With 5% Billionaire Tax.
• Louisiana AG Announces Investigation Into Fauci.
• ID To Buy Gov't Bread & Milk, But Not To Vote: This Is Mamdani's Socialist NYC Utopia.
• Study Finds Daily Marijuana Use Surpasses Daily Alcohol Consumption Among US Adults.
• Zelensky: We Seek To End War By Winter Through Escalation On Military, Diplomatic Fronts.
• Everybody Knows.
• Murders In The US Set To Hit 126-Year-Low Following Illegal Immigrant Deportations: DHS. 
• Trump Says Iran Faces 'Decapitation' If It Doesn't Sign A 'Good' Deal. 
• Bond Yields & Black Gold Dump, Big-Tech & Bitcoin Jump As Another Trump 'Deal' Looms; Yentervention Fades.               

• @CNBC  

• CNBC Daily Open: Fast and furious intervention to prop up the yen — will it work?
• Tuesday's big stock stories: What’s likely to move the market in the next trading session. 
• Jim Cramer says the market has warmed up to Big Tech's AI spending. Here's what flipped the switch.
• Stock futures are little changed after rip-roaring rally leads Dow to record closing high: Live updates.
• Stocks making the biggest moves after hours: Palantir, On Semiconductor, Snap & more.
• 25 states sue Trump administration over latest global tariffs.

• @TheTranscript

• onsemi CEO: "AI data center remains our fastest-growing business, and we now expect revenue to more than double in 2026..." $ON: +6% AH.
• Palantir CEO: "This quarter was otherworldly: our U.S. commercial revenue grew 149% Y/Y, our overall revenue grew 93% /YY, and our Rule of 40 score climbed to 155%. The sovereign AI revolution makes us very optimistic about the future" $PLTR: +8% AH. 

• @WallStEngine

• CITADEL SECURITIES: BULL MARKET DRIVERS REMAIN “FIRMLY INTACT”. Scott Rubner says July’s tech selloff and retreat by retail investors helped unwind the market’s speculative excesses. Retail posted its largest week of stock selling since 2022, while assets in leveraged ETFs fell 28% to $154 billion and equity funding costs dropped below their one-year average. He now sees the market shifting away from flows and positioning toward earnings, corporate demand and the macro backdrop.
• PALANTIR $PLTR Q2'26 EARNINGS HIGHLIGHTS. Revenue: $1.94B (Est. $1.8B) ; +93% YoY. Adj. EPS: $0.41 (Est. $0.35). US Commercial Revenue: $764M; +149% YoY. Adj. Op Inc: $1.19B (Est. $1.06B). Q3 2026 Guide: Revenue: $2.160B-$2.164B (Est. $2B). Adj. Op Inc: $1.29B-$1.30B (Est. $1.14B). Raises FY26 Guide: Revenue: $8.15B-$8.16B (Est. $7.69B. US Comm Revenue: >$3.4B; 134%+ YoY. Adj. Op Inc: $4.89B-$4.90B (Est. $4.46B). Adj. FCF: $4.5B-$4.7B (Est. $4.27B). 

• @MerengoFS

• $HNGE Earnings Preview.
• $AMD Earnings Preview.
• $ANET Earnings Preview.
• $ROK Earnings Preview.

Night Trading 

• Asian equity indices are -.5% to +.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 68.75 -1.0 basis point. 
• China Sovereign CDS 37.5 -.5 basis point.
• China Iron Ore Spot 93.60 USD/Metric Tonne -.2%. 
• Crude Oil 81.0/bbl. +.8% 
• Gold 4,108.0 USD/t oz. +.4%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.34 +.07%.
• Bloomberg Emerging Markets Currency Index 34.49 unch.
• Bloomberg Global Risk-On/Risk Off Index 126.0 +.1%.
• US 10-Year Yield 4.68% +1.0 basis point.
• Japan 30-Year Yield 3.97% -3.0 basis points.
• Volatility Index(VIX) futures 19.1 -.5%.
• Euro Stoxx 50 futures +.29%. 
• S&P 500 futures +.12%.
• NASDAQ 100 futures +.12%.

Morning Preview Links

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