U.S. Futures & World Markets

Equity futures are higher this morning as the market gets some relief from spiking oil prices. Crude is lower on headlines that President Trump has paused strikes on Iran while negotiations continue to reopen the Strait of Hormuz. Bottom line: oil down, stocks up.

We have no shortage of headlines to monitor this week. Four of the Mag 7 stocks report, Wednesday brings the FOMC rate decision, and we also get fresh inflation data on Thursday. Meanwhile, the market is pricing in rate hikes before the end of the year. We know that two things move the market: earnings and interest rates, and we'll get plenty of both this week.

Momentum stocks have taken it on the chin to start Q3. It's quite a reversal for the darlings of the market after such a strong first half. The biggest winners have suddenly sold off, while the market laggards are starting to trend higher. Speaking of fading momentum, it's amazing to see how fast the FOMO in Space stocks has disappeared. SpaceX (SPCX) is down 49% from its all-time high. Short sellers appear to be front-running the insider lockup expirations.

S&P Futures vs. Fair Value: +51.00  |  10-Year Yield: 4.64%

CORE Headlines

Charts & Data

The "Lag-7" putting in a lower high — $61 on MAGS ETF is the key technical trigger level. Callum Thomas: "If they take out the June 25 low, that will make it a lower high and a lower low — the technical definition of a downtrend."

S&P breadth has peaked at the same level it peaked at the last two times — beginning to look like a larger correction/consolidation phase. Callum Thomas via Daily Chartbook: an increasingly cautious technical read heading into a packed week.

Q2 EPS growth jumped to 37.9% from 24.8% last week — driven by Alphabet, which accounted for 92% of the net dollar increase. Excluding Alphabet, growth cools to 25.9%. FactSet via Daily Chartbook: the earnings story remains strong even excluding the outlier contribution.

S&P blended net profit margin at 15.7% — a record in FactSet data going back to 2009. FactSet via Daily Chartbook: 7 of 11 sectors reporting YoY margin expansion, 8 of 11 above the 5-year average.

S&P 500 now has the lowest PEG ratio in 30+ years. Q Capital via Daily Chartbook: extraordinary earnings growth has compressed this valuation metric to historically cheap levels.

Rate hike probability above 90% by year-end — the WSJ says count on Warsh to explain his thinking but not telegraph future decisions. WSJ via Daily Chartbook: the new Fed Chair is deliberately maintaining maximum flexibility.

Bloomberg's Global Treasury Index hit 3.68% — the highest since 2008. Bloomberg via Daily Chartbook: the global bond selloff is not a US-only story.

Retail weekly net buying of individual stocks fallen to the lowest level since the COVID-19 pandemic. Bloomberg via Daily Chartbook: the most consistent bull market buyer of the year is stepping back.

Interesting Reads

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