SpaceX Thoughts: TSLA on Steroids

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What’s in Today’s Report:

  • SpaceX Thoughts: TSLA on Steroids

Futures are lower, led by tech (Nasdaq futures down ~3%) as a heavy selloff in Asian chipmakers including in a ~10% drop in the South Korean KOPSI index, is dragging broader equity markets lower amid valuation and capex worries.

Today, focus is likely to be on whether the pre-market selloff in tech stocks accelerates or stabilizes as trading gets underway on Wall Street, however there are also a few noteworthy economic reports to watch, including the Flash Composite PMI (E: 51.2), and the Richmond Fed Manufacturing Index (E: 8.0).

There are no Fed officials are scheduled to speak today which will leave fixed income markets primarily focused on the economic data and the 2-Yr Treasury Note auction at 1:00 p.m. ET this afternoon.

Finally, there are a few important earnings releases due to be released today including: CCL ($0.34), FDX ($5.91), and CBRS (-$0.14).

Regarding the economic data, investors will be looking for “Goldilocks” data with healthy growth and cooling inflation and strong earnings in order for the market to stabilize from the pre-market rout.

 

Market Update: Trading One Source of Uncertainty for Another

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What’s in Today’s Report:

  • Market Update: Trading One Source of Uncertainty for Another
  • Weekly Market Preview: Another Test for AI Enthusiasm (Micron Earnings on Wednesday)
  • Weekly Economic Cheat Sheet: First Real Look at June Economic Growth This Week

Futures are slightly lower on digestion of Thursday’s rebound and some volatile (but not negative) geopolitical headlines over the weekend.

U.S./Iran headlines were volatile over the weekend but we ended it with the ceasefire still in place and negotiations on a nuclear deal ongoing (meeting market expectations).

Geopolitically, UK PM Starmer announced he will resign and that could put more upward pressure on global yields (which isn’t needed right now).

Today there are no economic reports and while Iran headlines will remain plentiful and likely conflicting, it should continue to fade as a market influence as neither side wants to escalate.

For today, that leaves a speech by the Fed’s Waller (9:00 a.m. ET) as the potential market moving event and if he comes out as hawkish or hints at possible rate hikes, that should put at least a mild headwind on stocks.

 

What the Warsh Fed Means for Markets

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What’s in Today’s Report:

  • What the Warsh Fed Means for Markets (Hawkishness vs. Uncertainty)

Futures are bouncing solidly as markets further digested new Fed Chair Warsh’s press conference and after the U.S. and Iran signed the ceasefire agreement.

New Fed Chair Warsh injected uncertainty into Fed operations/policy, but there were no substantial changes made yet and that’s helping stocks rebound this morning.

Geopolitically, the U.S. and Iran signed the ceasefire, two days earlier than expected, ending the conflict.

Today focus will return to economic data and the key reports today are:  Jobless Claims (E: 225K), Philly Fed (E: 10.0) and Leading Indicators (E: 0.1%).  Given rising hawkish Fed concerns, the more Goldilocks the data (solid activity/low prices) the better for markets.

 

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Why Are “AI Stocks” Trading at Such Low Multiples? Ask ORCL (The AI Bear Case)

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What’s in Today’s Report:

  • Why Are AI Semiconductor and Memory Stocks Trading at Such Low Multiples? Ask ORCL (The Bear Case)

Futures are slightly higher in cautious pre-market trade as investors await the first Warsh-led FOMC decision today with oil holding near 3-month lows while the 10-Yr yield hovers near a 1-month low after mostly benign inflation data overnight.

Economically, Japanese Machinery Orders rose to +15.6% vs. (E) +9.9% y/y while U.K. CPI held steady at 2.8% vs. (E) 3.1% y/y and EU HICP met estimates at 3.2% y/y.

Looking ahead to today’s session, focus will be on consumer spending data early with Retail Sales (E: 0.5%) due to be released ahead of the bell.

Data on Business Inventories (E: 0.5%) and Pending Home Sales (E: 0.9%) will also be released shortly after the open which could impact markets but not likely meaningfully ahead of the Fed decision this afternoon which will likely result in quiet, choppy trading through the middle of the day.

Regarding the FOMC meeting the meeting statement will hit the wires at 2:00 p.m. ET before focus turns to Fed Chair Warsh’s first press conference at 2:30 p.m. ET. The more dovish the tone and favorable the commentary on the economy is in the wake of this week’s Fed meeting, the better for markets with the potential for a volatile move in either direction given the uncertainty risk surrounding the stance of the new Trump-appointed leader of the FOMC (“Fed Independence” remains a simmering source of concern).

 

FOMC Meeting Preview

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What’s in Today’s Report:

  • FOMC Preview
  • Empire State Manufacturing Survey & Industrial Production Takeaways

Futures are flat this morning as traders continue to digest the U.S.-Iran peace deal news from the weekend and a 25 bp rate hike from the BOJ to the highest policy rate since 1995 (1%) amid disappointing global economic data.

Economically, Chinese Fixed Asset Investment fell -4.1% vs. (E) -2.3% y/y and Retail Sales dropped -0.6% vs. (E) -0.3% while the German ZEW Survey headline fell to -81.0 vs. (E) -77.5.

Looking into today’s session, there are two economic reports to watch in the U.S. between Housing Starts (1.430M) and Import/Export Prices (E: 1.3% m/m, 2.0% m/m). However, with the FOMC meeting getting underway in Washington today, the data should not materially impact markets.

Aside from the data, the Treasury will hold a 6-Week Bill auction at 11:30 a.m. ET and a 20-Yr Bond auction at 1:00 p.m. ET.

Given the Fed has been in their “blackout period” for the last two weeks, any signs of overly strong (dovish) or materially weak (hawkish) demand in the Treasury auctions could spill over and impact stocks, but otherwise today should be a relatively quiet day with a sense of “Fed paralysis” likely to begin to grip markets ahead of Warsh’s first Fed decision due tomorrow.

Another Busy Week (Geopolitics and the Fed)

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What’s in Today’s Report:

  • Weekly Market Preview: Two Headwinds Possibly Removed? U.S./Iran War and Fed Rate Hikes
  • Weekly Economic Cheat Sheet: Does the Warsh Fed Give Markets a Dovish Surprise?

Futures are sharply higher (up more than 1%) after the U.S. and Iran announced a peace deal that will reopen the Strait of Hormuz.

Global shares are rallying solidly after both the U.S. and Iran finally announced an agreement to end hostilities and fully reopen the Strait, meeting market expectations.

Oil prices are falling around 5% on the news and at multi-month lows, although still far above pre-war levels.

Despite the peace deal announcement, geopolitics will remain an influence on the market because the deal still has to be signed on Friday (and as we’ve seen, things can change quickly in this situation).  However, barring a major set back, geopolitics should face as a market influence by the end of the week.

Today, focus will be on economic data via the Empire State Manufacturing Index (E: 12.5) and Industrial Production (E: 0.2%).  With the Fed looming, Goldilocks data that shows solid activity and no upward price pressures will be welcomed by the market and add fuel to the rally.

 

Why the NFIB Small Business Survey Matters to You

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What’s in Today’s Report:

  • Why the NFIB Matters to You and Your Clients
  • PPI Takeaways – More Evidence Inflation Will Prove to Be “Transitory”
  • Jobless Claims Extend Steady Rise off of 2026 Lows

U.S. equity futures are extending yesterday’s broad market rebound with small caps leading as bond yields continue to retreat with oil trading near ~2 month lows with optimism for an imminent U.S.-Iran peace deal continuing to build.

Economically, German CPI was unchanged in May at -0.2% m/m and +2.6% y/y, meeting consensus estimates and further supporting a rise in global bonds (yields retreating).

Looking into today’s session, there are no Fed officials scheduled to speak as the FOMC remains in their “blackout period” ahead of next week’s policy meeting which will leaving traders primarily focused on geopolitical headlines with markets sensitive to any material moves in the oil market and/or bond yields.

There is one potential catalyst due out shortly after the open with the preliminary release of the June Consumer Sentiment report (E: 46.1, Year-Ahead Inflation Expectations: 4.8%) which has a history of impacting broader inflation expectations and therefore could move yields (and potentially roil equities if the print is “hot”).

Finally, there are no noteworthy earnings releases today which will leave geopolitical news in keen focus leading into the weekend.

 

How to Capitalize on the World Cup (5 Top ETFs to Buy)

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What’s in Today’s Report:

  • How to Capitalize on the World Cup – 5 Top ETFs to Buy
  • CPI Takeaways – Inflation Rises, But Core Up Less Than Feared

Futures are higher with tech/semis leading as the U.S. called an end to the latest wave of military strikes against Iran which is offsetting a negative reaction to ORCL earnings (shares down ~8%) due to lofty cap-ex plans.

There were no noteworthy economic reports overnight leaving traders focused on the ECB meeting announcement (8:15 a.m. ET) with President Lagarde’s press conference to follow.

Beyond the ECB decision, traders will be eyeing today’s Jobless Claims release (E: 215K) as well as the second important U.S. inflation print of the week: PPI (E: 1.4% m/m, 6.0% y/y). An in-line claims print and as-expected, or cooler-than-feared PPI print should help stocks stabilize.

Heading into the afternoon, the Treasury will hold a 4-Week & 8-Week Bill auction at 11:30 a.m. ET and a 30-Yr Bond auction at 1:00 p.m. ET which will offer further insight to the bond markets view of inflation/Fed policy outlook as the Fed remains in their “blackout period” ahead of next week’s meeting (no Fed speakers today).

Finaly, there are a few noteworthy earnings releases to watch today including: ADBE ($4.74), LEN ($1.23), and RH (-$2.07), and as has been the case all season, the stronger the results, the better.

 

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June MMT Chart: Three Technical Caution Signals

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What’s in Today’s Report:

  • June MMT Levels: S&P 500 Chart – Three Caution Signals

Futures are lower as traders digest the latest geopolitical escalations with the U.S. launching “retaliatory strikes” against Iran overnight after a U.S. military helicopter was downed near the Strait of Hormuz yesterday while focus shifts to critical domestic inflation data.

Economically, Chinese CPI held steady at 1.2% Y/Y vs. (E) 1.3% in May, helping somewhat ease global inflation worries.

Today, traders will be keenly focused on U.S. inflation data with CPI (E: 0.5% m/m, 4.2% y/y) and Core CPI (E: 0.3% m/m, 2.9% y/y) data due out ahead of the open. The latest Treasury Statement (E: $-269.5B) will also be released in the afternoon but is unlikely to move markets.

Beyond the CPI report, there are no Fed officials scheduled to speak today, however, there is a 4-Month Treasury Bill auction at 11:30 a.m. ET and a 10-Yr Treasury Note auction at 1:00 p.m. ET which could offer insight on the bond market’s reaction to this morning’s inflation data, and ultimately impact equities (the stronger the demand, the better for stocks, near-term).

Finally, on the earnings front, quarterly reports are due out from CHWY ($0.24) and ORCL ($1.58), the latter of which could present a fresh catalysts for the shaky AI-trade. A miss could restart heavy selling while strong results could prompt a fresh, squeezy/chase higher in AI, tech, and semiconductor stocks in afterhours trade.

 

June MMT: Positive News vs. Stretched Valuations

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What’s in Today’s Report:

  • June Market Multiple Table: Positive News Drives Stocks Higher, But Valuations Are Stretched

Futures are higher as the tech-led rebound in the wake of Friday’s market rout continues amid AI earnings optimism and easing geopolitical angst as President Trump reiterates a peace deal with Iran is imminent.

Economically, the NFIB Small Business Optimism Index fell a slight -0.6 points to 95.3 vs. (E) 96.0 in May but the modest “miss” is helping the bond market stabilize which is helping stocks recover.

Looking ahead to today’s session, there are two economic releases to watch: International Trade in Goods (E: $-55.5B) and Existing Home Sales (E: 4.08 million) although neither is likely to move markets with CPI looming large tomorrow.

There are no Fed speakers today as policy makers remain in their pre-meeting “blackout period,” but the Treasury will hold auctions for 6-Week & 52-Week Bills at 11:30 a.m. ET and 3-Yr Notes at 1:00 p.m. ET that could shed light on bond trader sentiment, and if yields rise on weak auction demand, expect the equity rebound to lose steam (surging yields were one of the major negative catalysts on Friday).

Finally, on the earnings front, a handful of companies are due to report late season quarterly results including ASO ($0.83), UNFI ($0.81), and CBRL (-$0.38) but again, near-term focus will remain on tomorrow’s CPI release, geopolitics, and bond yields.