U.S. Futures & World Markets

US equity futures are slightly higher premarket as lower crude prices continue to support stocks. Treasury Secretary Bessent was on CNBC this morning saying that a deal on the Strait of Hormuz could happen as soon as today. If that happens, it would remove one of the market's biggest overhangs.

Yesterday's trading saw strength across the board, with all major indices up over 1%. The S&P 500 closed above 7600 for the first time since June 2nd as stocks look through the short-term noise and focus on the long-term outlook. Standout earnings came from Palantir (+15% premarket) and Caterpillar (+11%). Caterpillar is a good barometer for the US economy because it touches almost every sector in the real economy — and it's often a LEADING indicator, since companies buy heavy equipment before the activity itself happens.

All-time highs are officially back in play with technology stocks playing catch-up after their recent slide. The trend is your friend.

S&P Futures vs. Fair Value: +6.50  |  10-Year Yield: 4.66%

CORE Headlines

Charts & Data

SPX remains stuck inside the range in place since early May. The bounce from the lower end, just above the 100-day moving average, has been textbook. Futures approaching first resistance around 7,600. The Market Ear: a technically clean setup for the next leg if bulls can hold the line.

Hormuz oil flow beginning to rise again — still well off the ~15 MMbpd late-June high, but back up to just less than 5 MMbpd. @rory_johnston via Daily Chartbook: partial normalization in shipping traffic, with the dark shuttle trade returning.

The yen carry trade has broken down — the yen is no longer a rates story and will trade on Japan's fiscal outlook until volatility subsides. Torsten Slok, Apollo: a major global macro trade has structurally shifted.

Hedge funds' largest net buying in US equities since November 2020 — driven by short covers across Macro Products and Single Stocks. Goldman Sachs via Daily Chartbook: the professional money is coming back in aggressively.

Mag 7 stocks collectively net bought for the week — net allocation now back to ~16%, in the 12th percentile vs. the past year. Goldman Sachs via Daily Chartbook: early signs of a Lag-7 rehabilitation trade.

2-month anniversary of the S&P's pullback — drawdown hasn't even exceeded -5%. Similar long, shallow pullbacks have preceded pretty good results over the next 6 months. @jasongoepfert via Daily Chartbook: historical precedent supports the bull case from here.

ISM Manufacturing expanded in July at the fastest pace in more than four years — strong demand, surging production, firms adding workers. Bloomberg via Daily Chartbook: the economic backdrop is materially stronger than the bear case suggests.

Q3 GDPNow improved to 6.2% from 5.0% on July 30. Augur Infinity via Daily Chartbook: a stunning acceleration that makes the "recession is coming" narrative look increasingly tenuous.

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