U.S. Futures & World Markets

Stocks are higher premarket after President Trump called off planned strikes on Iran, easing geopolitical tensions. New talks set to begin today, and crude oil is down 6% on the news — exactly what bulls wanted to see.

M&A headlines are back, with reports of merger talks between AstraZeneca and Bristol Myers. AZN is down 6%, and BMY is +6% on the news. Per CNBC: "If completed, a deal could value the companies at roughly $400 billion, and rank among the largest pharmaceutical tie-ups ever."

For all of the angst around oil prices, interest rate uncertainty, and the recent tank-job in semiconductor stocks, the S&P barely budged in July (down 0.1%). Stocks hung in there this month, showing confidence in the resilience of the economy. Bull markets have a funny way of climbing the wall of worry.

S&P Futures vs. Fair Value: +38.00  |  10-Year Yield: 4.67%

CORE Headlines

Charts & Data

Long-term rates at the highest level in 20 years for three reasons: inflation, fiscal problems, and hyperscaler issuance. The bottom line is we're not going back to the 2010s. Torsten Slok, Apollo: good news for everyone holding high-quality fixed income.

Technology has never been a larger share of the market, while healthcare has rarely been smaller. History suggests extremes rarely persist forever. The Market Ear: the mean-reversion trade in sector weights is building.

S&P closed July down 0.1% vs. equal-weight +0.9%, Nasdaq -6.6%. Still up 9.4% YTD. Non-tech stocks are pulling their weight and helping offset AI/Big Tech weakness. Callum Thomas: "Hanging in there above its 10-month moving average."

Q2 EPS blended growth rate: 47.4% with 61% of the index reported. Removing Amazon and Alphabet brings it down to "just" 28.8%. FactSet via Daily Chartbook: a remarkably strong earnings season even excluding the megacap outliers.

Big volatility spikes in semiconductor stocks have historically served as large buying opportunities. @warrenpies via Callum Thomas: a chart for the bulls — every prior spike of this magnitude was a dip worth buying.

Hedge funds sold the most global Information Technology equities in the 3 days ending July 28th since data began in 2016. Goldman Sachs via Daily Chartbook: institutional positioning has been reset to the most extreme degree on record.

Bank stocks are breaking out after years of basing — sending the same bullish warning that they sent in 2007, only in reverse. JC Parets via Daily Chartbook: "In 2007, banks were the warning as they peaked early. Now, banks breaking out again is saying this bull is alive and well."

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This content does not constitute legal, tax, accounting, or other professional expert advice. Everything published is believed to be reliable, but its accuracy or completeness is not assured. Past performance does not indicate future results. The opinions expressed herein are subject to change without notice and are solely those of the author as of the date indicated.