Golden Tempo
Takes the Lead

U.S. Futures & World Markets

While stocks have experienced some recent volatility on concerns around the AI-semiconductor selloff and the upcoming SpaceX IPO, we have a new leader in the clubhouse when it comes to driving market anxiety. A re-escalation of tensions in the Middle East has pulled a "Golden Tempo" and come flying down the stretch — horse racing fans will appreciate.

A break in the fragile ceasefire between the US and Iran has investors on edge this morning. Oil prices are surprisingly steady, with weaker Chinese demand helping to keep a lid on prices. Markets are juggling plenty of other concerns as we await inflation data at 8:30 AM ET.

While the broader market has held up, it's worth looking under the hood at where some well-known names sit relative to their 52-week highs: Eli Lilly: 0%, Blackrock: 0%, S&P 500: -3%, Apple: -8%, Google: -11%, Amazon: -12%, Nvidia: -12%, Tesla: -21%, Meta: -27%, Microsoft: -27%, Netflix: -39%, Bitcoin: -51%, Ethereum: -67%. For longer-term investors who can tune out the daily noise, I saved my favorite chart for last — earnings are what ultimately drive stock prices. Everything else is just a distraction until proven otherwise.

CORE Headlines

• President Trump says "Iran has taken too long to negotiate a deal that would have been great for them, now they will have to pay the price."
• President Trump in Fox interview says he is close to ordering new strikes on Iranian power plants and bridges; says Iran is "tapping the US along" with talks; notes oil prices are at $90/barrel — lower than analysts predicted.
• U.S. launched strikes on Iran after Iran shot down an American military helicopter. Iran responded by attacking U.S. targets in Jordan, Bahrain, and Kuwait. — NBC
• The Trump administration asks an AI testing unit to stop issuing public reports. — WSJ
• Kalshi planning a workplace disclosure rule to prevent insider trading. — WSJ
• The CFTC will soon introduce new rules for prediction markets. — WSJ
• Johnson & Johnson believes it is realistic to find cures for certain cancers. — WSJ
• Tesla robotaxis have long waits and stalled rides. — Bloomberg
• Anthropic released a next-generation Mythos-class model to the general public with guardrails removing dangerous capabilities. — WSJ
• J.M. Smucker expects sales to decline in the coming year as it leans away from price increases toward volume growth. — WSJ
• NASA chose a new slate of astronauts for its next Artemis mission. — WSJ

Charts & Data

Largest IPOs since 2000: the big, shiny ones tell us more about imbalance than opportunity. Ritholtz Wealth: "Big, shiny IPOs could tell us more about a lopsided balance between what we want and what corporate America thinks we want." Worth studying before the SpaceX filing.

Q2 GDP tracking 3.3% — rebounding from 3.0% low. Augur Infinity via Daily Chartbook: the Atlanta Fed's GDPNow model estimate improved to 3.3% from 3.0% on June 1. Still a solid backdrop for equities even as the AI trade churns.

Investor risk appetite cooled in June — high valuations, politics, and rates weighing. S&P Global via Daily Chartbook: "The political environment and high valuations continue to weigh on market sentiment, combined with worries over higher interest rates and recession risks." A sentiment reset after the historic melt-up.

Consolidated equity positioning at 66th percentile — moderately overweight, not crowded. Deutsche Bank via Daily Chartbook: "Still far from crowded, keeping the path open for further upside." The aggregate positioning story remains more constructive than the tech-specific picture.

Momentum long side more crowded than ever. Barclays via Daily Chartbook: "The momentum trade, which involves buying winners and selling losers, is more crowded on the long end than ever." When crowded momentum trades unwind, they tend to do so fast.

After NDX drops 4%+ on a Friday, 90% chance the Friday low gets breached in next 5 days. BTIG via Daily Chartbook: "We don't think this time is different." A cautionary near-term signal that argues for patience before buying the dip aggressively.

Value stocks continue to be ignored. Barclays via Daily Chartbook: the gap between growth and value has rarely been wider. The rotation everyone has been waiting for keeps not happening — but it will eventually.

Retail investors are raising cash — biggest single-stock selling since Nov 2023, led by semis. Vanda Research via Daily Chartbook: "Retail activity remains surprisingly weak post-tax season, potentially because investors are raising cash ahead of major IPOs." The SpaceX capital absorption effect is real.

Flows reveal bifurcation — aggressive short-building alongside legacy longs; Nasdaq still extended. Citi via Bloomberg Daily Chartbook: "The overall setup improved but still vulnerable to downside risks." Not a clean-enough setup to aggressively add risk.

BofA sees too many near-peak signals. BofA via Daily Chartbook: a growing checklist of market-top indicators is being flagged by BofA strategists. None is definitive individually, but in aggregate they warrant attention.

The three ingredients for a big top are still missing — SocGen's bull case. Manish Kabra, SocGen via Daily Chartbook: "During the Internet/Telecom Capex cycle in the 90s, three ingredients were visible by '99-'00: a renewed Fed-hiking cycle, rising credit spreads 6–9 months before the peak, and broadening growth visible in ISM at 60. We find the ingredients for a big top are still missing." The best long-term chart in the issue.

Interesting Reads

• How pandemic car shortages are still making new and used cars expensive — CNBC
• A China-Taiwan update — a little wonky, but good info — AEI

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