Wednesday Watch

Around X:

• @Business

• Trump administration is discussing additional trade penalties against Canada after Prime Minister Mark Carney unveiled dollar-for-dollar retaliation to new tariffs imposed by the US. 
• Iranian Foreign Minister Abbas Araghchi and his Omani counterpart Badr Albusaidi discussed an “interim framework” aimed at resuming shipping through the Strait of Hormuz, according to a joint statement carried by the Oman News Agency. 
• EchoStar allegedly engaged in $1.5 billion of “unusual transactions” with its bankrupt subsidiary, Hughes, according to the US Trustee, who urged the court to appoint an examiner to investigate the deals.    
• Cosmetics are among the hundreds of Canadian products the US hit with a new 50% tariff after trade talks broke down. The move threatens the $10 beauty impulse buy, experts say.
• Artificial intelligence labs and cybersecurity firms are reconsidering the way they test advanced AI models after models from at least three firms jumped onto the open internet and breached real-world victims. 
• Oil loadings from Iraq’s export installations in the Persian Gulf jumped on Monday with seven tankers collecting the nation’s cargoes, the latest sign that regional flows might be climbing. 
• Ghislaine Maxwell lost a long-shot bid to overturn her conviction and 20-year "prison" sentence for helping Jeffrey Epstein traffic women and girls for sex. 
• Get up to speed on what's moving global markets.
• Here’s what you need to know to start your day.   

• @ZeroHedge

• Macroeconomic Data Is Really A Tool For Government Intervention. 
• "Buffers Running Down Quickly": HSBC Warns Next Global Food Shock Brewing. 
• Bluetooth Glitch Exposes Alibaba's Secret Tracking Of Users, Developer Says.    
• Judge Rules For Doctor Who Prescribed Ivermectin For COVID-19.
• *US STRUCK VESSEL IN CARIBBEAN; KILLING FOUR: SOUTHCOM. 
• China Unlikely To Deploy Bazooka As Economic Pressure Mounts.
• "The Magic Deportation Bus": US Prepares For Largest-Ever Mass Visa Revocation In History.
• Report: Taxpayers Funding $230 Million In Federal Grants Tied To 'Intersectionality'.
• 'I Thought It Would Rise Forever'; World's 'Craziest' Stock Market Suddenly Faces Billion-Dollar Outflows.
• Amazon's New Warehouses May Process Packages 2.5 Times Faster With Far Fewer Workers. 
• Approval Of Trump's Presidency And The War On Iran Hit New Lows.
• Only 35% Of Women Under-25 Have Positive View Of Men; Survey Finds 'Heteroflexible' Is The Fastest Growing Sexual Orientation In America.
• Bonds & Stocks Bid As Oil Skids On Quiet Summer Tuesday Ahead Of NVDA.            

• @CNBC  

• CNBC Daily Open: The U.S. is flexing its economic power — drawing retaliation. 
• Wednesday's big stock stories: What’s likely to move the market in the next trading session. 
• Stock futures are little changed as traders await key inflation report, Nvidia earnings: Live updates.
• Nvidia's 'expectations premium' dogs the stock after earnings. Here's what analysts are watching.  

• @WallStEngine

• SEMTECH $SMTC Q2’27 EARNINGS HIGHLIGHTS Revenue: $341.9M (Est. $328.6M) ; +33% YoY Adj. EPS: $0.71 (Est. $0.61) Adj. EBITDA: $91.1M (Est. $79.6M) Adj. Oper Income: $83.6M (Est. $68.4M) Q3 Guide: Adj. EPS: $1.05 +/- $0.03 (Est. $0.73) Revenue: $410.0M +/- $5.0M (Est. $379M) Adj. EBITDA: $134.3M +/- $4.0M (Est. $90.6M) Adj. Oper Income: $127.0M +/- $4.0M (Est. $81.5M) Adj. Gross Margin: 58.3% +/- 100 bps Adj. Operating Margin: 31.0% +/- 60 bps. 
• INTUIT $INTU Q4’26 EARNINGS HIGHLIGHTS. Revenue: $4.4B (Est. $4.27B) ; +14% YoY Adj. EPS: $4.03 (Est. $3.58). FY27 Guide: Revenue: $23.3B-$23.5B (Est. $23.72B). Adj. EPS: $22.88-$23.12 (Est. $27.32). Q1 Guide: Revenue: $4.29B-$4.31B (Est. $4.36B). Adj. EPS: $2.44-$2.48 (Est. $4.04).  

• @MerengoFS 

• $NVDA Earnings Preview.  
• $CRWD Earnings Preview. 

Night Trading 

• Asian equity indices are -.25% to +.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 66.75 -.25 basis point. 
• China Sovereign CDS 35.25 +.25 basis point.
• China Iron Ore Spot 97.40 USD/Metric Tonne +.3%. 
• Crude Oil 80.50/bbl. -2.3% 
• Gold 4,703.70 USD/t oz. +.2%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.38 +.03%.
• Bloomberg Emerging Markets Currency Index 34.46 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 125.4 +.1%.
• US 10-Year Yield 4.64% +1.0 basis point.
• Japan 30-Year Yield 4.06% -2.0 basis points.
• Volatility Index(VIX) futures 17.3 +.4%.
• Euro Stoxx 50 futures +.02%. 
• S&P 500 futures -.20%.
• NASDAQ 100 futures -.49%.

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

Stocks Modestly Higher into Final Hour on Diminishing War-Induced Inflation Fears, Lower Long-Term Rates, Earnings Outlook Optimism, Tech/Biotech Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.4 -.4%
• BofA Private Credit Proxy Index 74.0 -.1% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .29 unch.
• BofA Global Financial Stress Indicator -.15 unch.
• European Financial Sector CDS Index 53.4 -.8%
• Emerging Market CDS Index 136.9 -1.2%
• Israel Sovereign CDS 54.0 +.9%
• Bloomberg Global Trade Policy Uncertainty Index 1.1 +.1
• US Morning Consult Daily Consume Sentiment Index 91.6 +1.8

• Citi US Economic Surprise Index 22.7 -1.3

• Citi Eurozone Economic Surprise Index 90.8 +6.2

• Citi Emerging Markets Economic Surprise Index 23.6 +1.9
• 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 391.92 +.20:  Growth Rate +33.1% unch., P/E 19.6 unch.
• S&P 500 Current Year Estimated Profit Margin 16.32% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +138.4% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 953.28 +.53: Growth Rate +83.8% +.1 percentage point, P/E 19.3 +.1
• Bloomberg US Financial Conditions Index 1.25 -6.0 basis points
• US Yield Curve 44.0 basis points (2s/10s) -2.75 basis points
• Bloomberg Industrial Metal Index 181.9 +1.0%
• Dutch TTF Nat Gas(European benchmark) 66.7 euros/megawatt-hour -2.3%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.0 +.7% percentage point
• US Atlanta Fed GDPNow Q3 Forecast +4.0% unch.
• US 10-Year T-Note Yield 4.64% -6.0 basis points
• 1-Year TIPS Spread 1.99 -1.0 basis point

• Highest target rate probability for Oct. 28th FOMC meeting: 46.4% (+3.4 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Dec. 9th meeting: 45.3%(+.5 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +150 open in Japan 
• China A50 Futures: Indicating +6 open in China
• KOSPI 200 Futures: Indicating +13 open in South Korea 

• DAX Futures: Indicating +40 open in Germany

Portfolio:

• Slightly Higher: On gains in my financial/tech/biotech sector longs
• Disclosed Trades: None
• Market Exposure: 75% net long

Bear Radar

Style Underperformer:

• Mid-Cap Value -.1%

Sector Underperformers:

• 1) Cyber Security -1.6% 2) Retail -1.3% 3) Energy -1.1%

Stocks Falling on Unusual Volume: 

• BURL, PBR, ASO, DY, BETA, BBWI, ZYME, SHOE, SCTX, GRRR and DKS

Stocks With Unusual Put Option Activity:

• 1) DKS 2) BBWI 3) TFC 4) SPDN 5) XE

Stocks With Most Negative News Mentions:

• 1) DKS 2) NKE 3) INTU 4) TGT 5) UAA

Sector ETFs With Most Negative Money Flow:

• 1) VGT 2) XLE 3) DRAM 4) XLF 5) VFH

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.6%

Sector Outperformers:

• 1) Nuclear +4.9% 2) Computer Hardware +2.2% 3) Biotech +2.0%

Stocks Rising on Unusual Volume:

• STDN, INBX, ABCL, MRNA, GENB, CLPT, REAX, RUM, EIKN, KURA, IMMX, MAIR, ASST, VIR, AVBP, KLRA, MRAM, FUTU, PURR, HELP, ARCT, MARA, NGL, BNS, VOR, PESI, TEM, CRSP, CAI, BE, ETOR, CDNA, CRCL, COIN, BZ, RARE, SMMT, PAYS, VERA, SMTC, CIFR, CTNM, NGNE, KNF, MSTR, PRE, XPEV, JAZZ, PS, SPT and BMNR

Stocks With Unusual Call Option Activity:

• 1) DKS 2) EWZ 3) RZLV 4) BMNU 5) VYM 

Stocks With Most Positive News Mentions:

• 1) SWVL 2) RR 3) MAIR 4) HOOD 5) KURA

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) XBI 3) XLV 4) KRE 5) XLK

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:

• (ANF)/1.99
• (BBWI)/.24
• (DCI)/1.13
• (DY)/4.72
• (SJM)/2.22
• (KSS)/.58
• (PLAB)/.40
• (WSM)/2.08 

After the Close: 

• (A)/1.49
• (CRWD)/.29
• (HPQ)/.69
• (NTNX)/.49
• (NVDA)/2.09
• (OKTA)/.97
• (CRM)/3.27
• (SNPS)/3.67
• (URBN)/1.72
• (VEEV)/2.22 

Economic Releases 

8:30 am EST

• Personal Income for July is estimated to rise +.2% versus a +.2% gain in June.
• Personal Spending for July is estimated to rise +.1% versus a +.3% gain in June.
• The PCE Core MoM for July is estimated to rise +.2% versus a +.1% gain in June.
• Durable Goods Orders for July is estimated to rise +.5% versus a +.5% gain in June.
• Durables Ex Transports for July is estimated to rise +.6% versus a +.7% gain in June.
• Cap Goods Orders Non-Defense Ex-Air for July is estimated to rise +.7% versus a +1.2% gain in June.  
• 2Q GDP revisions. 

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +1,392,800 barrels versus a +4,405,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -809,600 barrels versus a +688,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,644,200 barrels versus a -1,530,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.31% versus a +1.0% gain prior. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Barkin speaking, Atlanta Fed GDPNow Q3 update, 5Y T-Note auction, weekly MBA Mortgage Applications report, (BOOT) annual meeting and the (UAA) 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 -24.6% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 17.0 +3.1
• 7 Sectors Rising, 4 Sectors Declining
• 52.1% of Issues Advancing, 45.5% Declining 
• TRIN/Arms 1.09 +23.9%
• Non-Block Money Flow +$77.9M
  
• 42 New 52-Week Highs, 39 New Lows
• 60.7% (-.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 63.1 +2.9

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 8.0% unch.
• Strait of Hormuz traffic returns to normal by September 30th 7.0% +1.0 percentage point
• Iran agrees to end enrichment of uranium by Sept. 30th 4.0% unch.
• Israel withdraws from Lebanon by September 30th 3.0% +1.0 percentage point
• US Invades Iran before 2027 17.0% unch.
• US announces end of Iranian blockade by September 30th 42.0% +8.0 percentage points

Other

• Bloomberg Global Risk-On/Risk-Off Index 125.4 -.4%
• Global Monitor Iran Instability Index 54.0 unch.
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 90.0% unch.
• US High-Yield Tech Sector OAS Index 459.25 -4.75 basis points
• Bloomberg Cyclicals/Defensives Index 269.4 +.1%
• Morgan Stanley Growth vs Value Index 148.6 +1.4%
• CNN Fear & Greed Index 59.0 (GREED) +4.0
• 1-Day Vix 7.1 -19.3%
• Vix 15.5% -2.5%
• Total Put/Call .81 -10.0%