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.

 

Is There a Potential AI Oversupply Problem?

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What’s in Today’s Report:

  • A Potential AI Oversupply Problem?
  • Weekly Market Outlook – Looming IPOs and Key Inflation Data in Focus

Futures are mildly higher as tech/ semis lead (SOXX up ~3% pre-market after a 10%+ decline Friday) despite escalating geopolitical tensions over the weekend.

Geopolitically, military strikes between the U.S/Israel and Iran intensified this weekend, sending oil and yields higher despite President Trump’s calls for immediate ceasefire by all sides earlier this morning.

Economically, German Manufacturing Orders fell -3.8% vs. (E) -2.0% M/M in April, rekindling EU growth worries which is helping cap the early rise in bond yields.

Looking ahead to today’s session, there are no noteworthy economic reports due to be released in the U.S. and no Fed officials are scheduled to speak. However, the Treasury will hold 3-Month and 6-Month Bill auctions at 11:30 a.m. ET which could impact equities and other markets as Fed policy expectations took a hawkish turn last week (strong demand for the short-duration T-Bills would be a positive for stocks).

Finally, there are a few noteworthy earnings releases to watch: CPB ($0.48) and MTN ($8.97), but with geopolitical tensions on the rise and CPI data looming Wednesday, earnings are likely to take a “backseat” as far as market catalysts go in the sessions ahead.

 

Jobs Day

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What’s in Today’s Report:

  • Jobs Day
  • Is AI Friend or Foe to the Labor Market?

Futures are modestly lower mostly on continued tech weakness following AVGO’s disappointing earnings and after a mostly quiet night of news.

Tech stocks are extending Thursday’s post AVGO earnings driven declines and that’s weighing on futures although nothing newly negative occurred overnight.

Economically, the only notable report was Q1 Eurozone GDP which missed estimates (0.3% vs. (E) 0.8%).

Today focus will be on the jobs report and expectations are as follows: 85K Job-Adds, 4.3% Unemployment Rate and 3.4% y/y Wage Growth.  The “best case” scenario is a Goldilocks number with above expectations job adds and unemployment and wages that meet or slightly beat expectations, as that will imply a stable labor market but not one that is putting upside pressure on inflation.

 

Jobs Report Preview: More Evidence of a Run Hot Economy?

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What’s in Today’s Report:

  • Jobs Report Preview: More Evidence of a Run Hot Economy?

Futures are modestly lower as tech weakness is offsetting positive geopolitical news.

Broadcom (AVGO) posted disappointing guidance and became the first big AI linked tech company with underwhelming earnings and the stock is down 13% premarket.

Israel and Lebanon agreed to a ceasefire and that’s pressuring oil prices and supporting non-tech stocks.

Today focus will be on geopolitics (tangible progress towards a U.S./Iran ceasefire would be an incremental positive) and economic data via Jobless Claims (E: 212K) and Productivity & Costs (E: 0.7%, 2.3%).  It remains the case that Goldilocks economic data (solid activity and stable prices) is the most positive for stocks.  We also have two Fed speakers, Barkin (8:30 a.m. ET) and Daly (1:10 p.m. ET), but they shouldn’t move markets.

 

Sevens Report Technicals

This week’s Sevens Report Technicals focused on a question many investors are asking but few are answering clearly: Is this rally broadening, or are markets becoming even more dependent on a handful of winners?

While major indexes continue to push higher, the underlying technical picture is becoming more nuanced. In Monday’s report, we analyzed key support and resistance levels across stocks, bonds, commodities, currencies, and volatility markets while also highlighting several important divergences developing beneath the surface. We also reviewed sector leadership trends, market breadth, sentiment, and intermarket signals to determine whether this advance remains healthy or if caution is warranted.

If you want a clearer understanding of what is driving markets right now, where leadership is emerging, and which technical signals deserve the most attention in the weeks ahead, click below to access this issue of Sevens Report Technicals and see the charts that matter most.

Sevens Report Technicals

 

Understanding Where Earnings and Revenue Growth Is Coming From

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What’s in Today’s Report:

  • Understanding Where Earnings and Revenue Growth Is Coming From
  • Visual – Money Is Moving From the Hyperscalers
  • JOLTS Data Takeaways

Futures are mildly lower as geopolitical tensions flared in the Middle East overnight with the U.S. and Iran launching a fresh wave of military strikes against one another which sent crude oil prices and global bond yields higher.

Economically, China’s May Service PMI was solid (54.4 vs. E: 52.2) while the EU Composite PMI was better than feared (48.5 vs. E: 47.5) but still in contraction territory. Paired with the latest EU PPI release, which showed a headline increase of 4.9% vs. (E) 4.5% Y/Y, the data rekindled stagflation fears in the Eurozone.

Looking ahead to today’s session, focus appears to be shifting back to the geopolitical situation in the Middle East, so any material developments (good or bad) will likely impact markets with traders keenly watching oil prices as a bellwether.

On the data front, “jobs week” kicks off with today’s ADP Employment Report (E: 120K) due out ahead of the bell, while data on Factory Orders (E: 4.3%) and the ISM Services Index (E: 53.9) will both be released shortly after the opening bell. The stronger the growth data/cooler the inflation data, the better for stocks.

Additionally there are two Fed officials scheduled to speak today: Barr (9:00 a.m. ET) and Logan (4:00 p.m. ET) and investors will be looking for a less-hawkish tone regarding potential rate hikes in 2026 in order for the risk-on rally to continue.

Finally, on the earnings front, quarterly results from MDT ($1.54), M ($0.02), AVGO ($2.02), CRWD ($0.13), AI ($-0.74), and FIVE ($1.70) are all due to be released. The semiconductor/AI-names will be particularly important as tech earnings/revenue growth has been a major market tailwind in Q2.

 

What Is Tokenmaxxing? (And Why Does It Matter to You?)

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What’s in Today’s Report:

  • What Is Tokenmaxxing and Why Does It Matter to You?
  • ISM Manufacturing PMI Takeaways

Futures are slightly lower as a wave of broad market profit taking is being partially offset by a bid in the tech sector after NVDA’s CEO, Jensen Huang, said MRVL (+25%) could be the next $1T company overnight, stoking a fresh sense of AI-enthusiasm.

Economically, the Eurozone’s May HICP Flash rose 3.2% vs. (E) 3.3% Y/Y with the Narrow-Core rising to 2.5% vs. (E) 2.4% Y/Y.

Today, there are two domestic economic reports to watch with JOLTS (E: 6.815 million) being the key number to watch followed by Motor Vehicle Sales (E: 16.0 million).

Additionally, there is one Fed official scheduled to speak this morning: Hammack (8:30 a.m. ET) and the Treasury will hold a 6-Week Treasury Bill auction at 11:30 a.m. ET, both of which could move bond yields and influence equity markets (the lower yields go, the better for stocks).

Finally, some late season earnings to watch today including DG ($1.89), VSCO ($0.29), PANW ($0.43), GTLB (-$0.06), and ULTA ($6.91); the stronger the results, the better for the bullish equity narrative.

 

Why Do Stocks Keep Rising? (Biggest Reason)

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What’s in Today’s Report:

  • Why Do Stocks Keep Rising? (Biggest Reason)
  • Weekly Market Preview: Do tech earnings and economic growth stay strong?
  • Weekly Economic Cheat Sheet: A Busy Week Highlighted by Friday’s Jobs Report

Futures are modestly higher despite no U.S./Iran ceasefire and as AI Enthusiasm continues to support stocks.

There was no additional progress on a U.S./Iran agreement and the two sides again exchanged limited strikes but markets still expect a ceasefire agreement in the coming days.

Nvidia unveiled a new AI processor designed specifically for Windows and that is boosting tech and futures.

This week is a busy and potentially important one from an economic standpoint and it starts today with the ISM Manufacturing PMI (E: 53.3). Markets will want to see a Goldilocks reading of better than expected headline activity and tame price indices (the opposite would be stagflationary and negative for markets). We also get one Fed speaker today, Waller (8:30 a.m. ET), but he shouldn’t move markets.

Notable tech earnings continue this week including today:   SAIC ($2.26), HPE ($0.44).

 

New Market Tailwind: Falling Rate Hike Fears

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What’s in Today’s Report:

  • New Market Tailwind:  Falling Rate Hike Fears

Futures are slightly higher as markets await confirmation of a U.S./Iran ceasefire agreement while tech earnings continued to be very, very strong.

There was no update on the U.S./Iran ceasefire agreement overnight but numerous reports state a deal has been struck and is awaiting President Trump’s approval.

On earnings, DELL is the latest AI linked tech company to post blow out results and the stock is up 35% pre-open.

Today focus will remain on geopolitics and specifically confirmation from Trump of the ceasefire agreement.  The deal is mostly priced into markets so confirmation shouldn’t cause a big rally, although if the deal is rejected it will be a modest negative.

Away from geopolitics, the only key economic report today is the Chicago PMI (E: 51.2) and barring a major surprise it shouldn’t move markets.  There are numerous Fed speakers, however, including Bowman (9:10 a.m. ET), Paulson (9:15 a.m. ET) and Daly (12:40 p.m. ET) and if they are hawkish it could put a mild headwind on stocks.

 

The Canary in the Coal Mine for Memory

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What’s in Today’s Report:

  • The Canary in the Coal Mine for Memory
  • Advisor Advantage: 12 Ways to Save Money on Gas This Summer (Client Material)

Futures are slightly lower following tit-for-tat missile/drone strikes between the U.S. and Iran.

The U.S. and Iran traded limited missile/drone attacks although the moves were “defensive” and ceasefire expectations remain intact.

Barring a ceasefire agreement or major escalation between the U.S. and Iran, the focus today will be on economic data and the key reports are, in order of importance: Core PCE Price Index (E: 0.3% m/m, 3.3% y/y), Durable Goods (E: 2.8%), Jobless Claims (E: 213K), Q1 GDP (E: 2.1%),  New Home Sales (E: 662K).  For these economic releases the key is solid activity and stable prices, as that will push back on stagflation concerns.

Today also brings numerous Fed speakers including Williams (8:55 a.m.), Musalem (10:15 a.m.) and Barkin (3:00 p.m.).  Of the three, Williams is the most important because he’s part of Fed leadership and if he hints at an openness to rate hikes it will be a headwind on stocks.

Finally, on the earnings front, the key report today will be DELL ($2.79) because it pertains to AI but two notable consumer reports are BBY ($1.22) and COST ($4.91).  For these earnings the stronger, the better for markets.

 

Alpha Report: The AI Trade Is Evolving Beyond Chips and Mega-Cap Tech

The AI trade is no longer just about semiconductors and the “Magnificent Seven.” In this week’s Alpha Report, we examine how AI spending is beginning to ripple through other parts of the economy and market, creating potential opportunities beyond the obvious names that have already surged.

Specifically, we break down where AI-related capital spending is flowing next, which sectors and industries may quietly benefit from the second-order effects of the buildout, and how investors can think about positioning if the AI trade broadens from here.

The report is designed to help you move beyond the headlines and better explain to clients where the next phase of the AI investment cycle may emerge.

👉 Access the full report and analysis here: Sevens Report Alpha

The “Memory Wall” and Why It’s Driving the Latest AI-Rally

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What’s in Today’s Report:

  • The “Memory Wall” and Why It’s Caused the Latest AI-Driven Rally

Futures are higher with tech and small caps leading as oil and yields retreat amid firming optimism for a U.S.-Iran ceasefire deal after an otherwise quiet night of news.

Economically, Chinese Industrial Profits rose 2.7% to 18.2% in April, the fastest pace since November of 2023 with “Computing/Electronics” profits more than doubling Y/Y helping bolster AI-enthusiasm.

Looking into today’s session, there is one “second-tiered” economic report: the Richmond Fed Manufacturing Index (E: 4.0) which is unlikely to materially impact markets (however “hot” price figures could rekindle inflation worries).

Additionally, there is a 5-Yr Treasury Note auction at 1:00 p.m. ET which could shed light on the sustainability of the recent rebound in bonds, so the stronger the demand, the better for fixed income markets and risk assets alike today.

There are also two Fed speakers, both late in the day with Cook scheduled to deliver remarks at 3:55 p.m. ET, and Jefferson on the calendar to speak after the close (8: 00 p.m. ET). Regarding the Fed speak, the less hawkish/more accommodative the tone, the better.

Finally, some late-season earnings will be released today with DKS ($2.87), PDD ($2.03), BNS ($1.46), CRM ($2.30), MRVL ($0.61), SNOW (-$0.59), HPQ ($0.72) all due to release Q1 results. Barring any noteworthy disappointments, particularly from the tech companies reporting, a strong earnings season should remain a tailwind for market into the end of the month.