Calendar

Monday: Japan Carry Trade

Tuesday: Trade balance, CAT, TAP, YUM, UBER, ABNB earnings

Wednesday: HLT, DIS, LYFT earnings

Thursday: Jobless Claim, Fed’s Barkin

Friday: Weekend 

Macro Observations

• A bounce, but how convincing after being up much more overnight and a 10% bounce in Japan?

• 90% downside volume day

• QQQ selloff on highest volume since Mar 2023 (a short-term bottom?)

• Fading this opening rally would be very bearish and a right hook to the bulls.  Lets hope we can build as the day goes on

• Oscillators oversold

• Need to reclaim 5260 to try and calm the waters

• Yields backing up

Fear/Greed Index

Almost extreme fear territory

Charts

10 Year

GOLD

BITCOIN

Consumer/Financial Healthcare

FHN – Removed from Baird’s Bearish Fresh Pick list after the down move. Victory lap for the call as it was down 16% compared to 6.5% for the bank index.

Baird on Fin Tech – This type of slowing growth environment has been met with higher multiples for names like MA, V, FI, FIS, and GPN as the quality of earnings growth becomes harder to find.

Crypto High Beta all up 2-5% - Hood +4%, COIN +2%

NDAQ – Up 4% on July options contracts beating significantly at 297M vs 255M.

PYPL – Upgraded to buy at Phillip (who?).

SQ- Mizuho cut its PT to $94, but given the stock is $57.50, nobody will care.

SPG - raised low end of FY FFO guide and talked up strong leasing environment.

HIMS- beat and raised but also some focus on GLP-1 uncertainty.

CELH - logged higher earnings in the second quarter, when demand growth for its flagship energy drink held up and margins expanded. International sales jumped 30% to $19.6 million, driven by ongoing velocity improvements and brand awareness. Notably, the company's sales to Amazon increased 41% to approximately $39.9 million.

CART - is making its first international push outside the US and Canada by testing its smart shopping carts in Europe

Technology

NVDA - spokesperson said Hopper demand very strong and Blackwell production on track to ramp in 2H.

NVDA - Upgraded to Buy at New Street Research.

PLTR - Traded +17% on a beat & raise. PLTR winning in the market because products are production ready vs vague prototyping. Seeing strength in US Commercial business. Customer counts increased 83% y/y …Introduced Warp Speed for the re-Industrialization (like Spacex that developed from scratch via internal engineering)

UBER - beat by 16c; revs beat by $120M.

TSM - is not only planning price hikes for 2024 but has already informed several customers in July about price increases for its 5nm and 3nm processes in 2025, Digitimes citing sources from the IC design industry. These increases, ranging from 3% to 8%, are in response to rising costs and are aimed at maintaining a long-term gross margin of 53%, passing the pressure onto their customers.

Industrials 

CAT – turned negative after big Q2 EPS beat. Reports Q2 EPS $5.99 ex-items vs FactSet $5.56. Q2 revenue $16.69B vs FactSet $16.91B. Demand numbers were pretty weak.

Lucid (LCID) - Raised to Neutral at Cantor; PT $4. LCID production guide unchanged and announced PIF committed another $1.5B.

SunPower (SPWR) - enters into asset purchase agreement with Complete Solaria as stalking horse buyer, files for chapter 11.

TSLA - Raised to Buy at Punto Casa de Bolsa; PT $270.05

RTX – Gets $478M Patriot Gem-T missile contract.

Credit spreads concerning

With the selloff in MegaTech, valuations down a lot, but still above 10yr median

While market looks for Fed cuts - a reminder, typically defensives lead early on

Reminder - when the Vix gets up here (above 28-29), really should hold your nose and buy

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