S&P futures are trading at all time high with the latest push higher triggered by comments from Scott Bessent on CNBC who echoed Trump in saying that "we may have Iran deal tomorrow to open Hormuz" (or we may not). The Nasdaq also looks set to extend Monday’s gains: As of 8:00am ET, S&P futures are up 0.4% to an all time high of 7655 and Nasdaq futures rise 1.
1%, as Palantir soared 16% pre-market after upping its forecasts, while Caterpillar rose 9% on an earnings beat. Semis are leading the Tech tape with Mag7 (DRAM, EWY, SMH, SOXX all higher by at least 1.6%) while Mag 7 are mixed: Amazon (AMZN) falls 2% after founder Jeff Bezos filed to sell $4.
07 billion of stock (Nvidia +1.3%, Tesla +0.6%, Apple -0.
2%, Meta -1.7%, Alphabet -1.5%, Microsoft -2%).
Cyclicals are leading Defensives with healthcare/staples lower pre-market. Bond yields are slide 2-3 bps on the drop in oil prices, and the USD is stronger as is USDJPY following a catastrophic 10Y JGB auction while intervention is not expected to have a lasting impact and the market is likely signaling the need for BOJ to hike. In commodities, WTI tumbles on Bessent's comments that we may have a deal to reopen Hormuz tomorrow (we won't) with WTI sliding as low as $76.
Base metals are higher with Precious metals spiking and Ags bid. It’s a busy day, with earnings this morning from McDonald’s and Caterpillar, and the AI trade front and center this afternoon as AMD and SpaceX report. Today’s macro data focus is on JOLTS and trade balance.
In premarket trading, Mag 7 are mixed: Amazon (AMZN) falls 2% after founder Jeff Bezos filed to sell $4.07 billion of stock (Nvidia +1.3%, Tesla +0.
6%, Apple -0.2%, Meta -1.7%, Alphabet -1.
5%, Microsoft -2%). Ameresco (AMRC) rallies 30% after the energy company boosted its adjusted earnings per share guidance for the full year.BioNTech SE (BNTX) falls 3% after the company lowered its revenue outlook as demand for its Covid-19 vaccine shrank more than expected.
Caterpillar (CAT) posted second-quarter earnings and revenue that beat Wall Street expectations as the company’s power-generation business continued to post strong growth off the back of data center spending. Shares are up 8%.DuPont de Nemours (DD) falls 3% after the chemicals company reported second-quarter results and gave a full-year forecast.
McDonald’s (MCD) climbs about 2% after the fast-food restaurant owner and operator posted second quarter results.Nike (NKE) falls 3% after JPMorgan cut its recommendation on the sportswear and sneaker company to underweight, noting financial impacts from the company’s “Win Now” business strategy.Onsemi (ON) rises 7% after the chipmaker’s second-quarter revenue and earnings beat the average analyst estimate.
Analysts note that AI data-center demand is boosting results.Palantir (PLTR) jumps 15% after the company boosted full-year revenue and income forecasts and described commercial demand for its data analytics tools as “otherworldly.”Powell Industries (POWL) drops 11% after the maker of circuit breakers and other electrical equipment posted fiscal third-quarter EPS and revenue that missed expectations.
Rockwell Automation (ROK) falls 5% after the maker of industrial automation products posted third quarter results and provided a year forecast.Snap (SNAP) gains 5% after the the social media platform posted higher-than-projected quarterly sales and gave an upbeat forecast for the current period. The results signal optimism ahead of the September commercial debut of its first pair of augmented reality glasses.
Spotify (SPOT) falls 4% after the music streaming service’s third-quarter monthly active users and operating income forecasts missed the average analyst estimate.Voyager Technologies (VOYG) rises 15% after the defense company raised its revenue outlook for the full year.Wayfair (W) falls 3% after the online furniture and home goods retailer posted second quarter results.
Corporate news is also busy, with Prologis set to buy UK REIT Segro for about £14 billion ($18.8 billion) and Williams reaching an agreement to buy Momentum Midstream through a deal valued up to $5.5 billion.
HSBC’s CEO said the bank will consider boosting its bonus pool for bankers if strong performance continues. In AI news, the White House plans to host leading companies today to discuss a safety framework. Competition is heating up, especially from Chinese AI models, creating what’s been described as a death zone for anyone without frontier-pushing technology or market-breaking pricing.
And AI is also shaking up the VC market, with money flowing disproportionately to top-tier investors that backed the technology early.The rebound in US tech followed a volatile month as investors questioned whether billions of dollars of spending on artificial intelligence will translate into stronger growth and profits (they will... for Chinese AI models).
The positive earnings season so far has eased some of those concerns, although the reality is masked under hundreds of billions in new debt. S&P 500 companies are beating expectations at a rate of 86%, the highest in five years, while year-on-year growth in earnings per share is running at 29%. Specifically, of the 322 S&P 500 companies to have reported so far this season, 86% have beaten analysts’ EPS forecasts, while 10% have missed.
68% of companies have positively surprised on sales, while 16% have missed.“The combination of resilient economic growth, strong corporate earnings and AI-driven investment continues to provide a favorable backdrop for equities,” said Jeff Buchbinder, chief equity strategist at LPL Financial. “While investors are right to scrutinize elevated capital spending by hyperscalers and monitor developments in the Middle East, we believe these risks will be offset by the powerful earnings tailwind.
”However, as Bloomberg cautions, one potential pitfall for markets comes when SpaceX reports its first earnings as a public company later Tuesday. It also sets the stage for one of the largest share unlocks in capital markets history, with as much as $116 billion of stock becoming eligible for sale for the first time next month. SpaceX stock is about 15% lower than its closing price on June 11, when the shares started trading.
“The bigger issue for SpaceX remains the looming share overhang,” said Chris Weston, head of research at Pepperstone Group Ltd. “There is a sense that many investors remain interested in owning the stock but are waiting for the selling pressure associated with these lock-up expiries to begin fading.”Elon’s rocket company isn’t profitable and has a very speculative model, so the results may end up raising more questions than they answer according to Bloomberg.
Volatility could also be increased by technical factors: With a low free float, 95% of SpaceX stock available to borrow is out on loan, according to S3 Research data, amounting to 34% short interest as percentage of the float.Total assets in US-listed leveraged ETFs have retreated from highs, reducing the market impact from daily rebalancing. Still, rotation trades are creating pain points for hedge fund consensus long versus short trades.
And while US equities look fairly resilient on the surface, positioning data point to limited investor conviction, particularly within small caps, according to Citigroup strategists. In hedge funds, Coatue Management’s fund plunged 8.3% last month, marking the latest technology-focused money manager to be whipsawed after the AI rout.
Today’s Big Take looks at how a tax strategy for the rich built the world’s largest hedge fund. The Stoxx 600 rises 0.4% as mining and technology shares lead gains, while retail and consumer products stocks are the biggest laggards.
Here are the biggest movers Tuesday:The Stoxx 600 basic resources index is the best-performing sector in the European stocks benchmark after copper advanced to the highest in two monthsBP Plc shares are up as much as 1.7% after the British oil major reported adjusted Ebit for the sec