Morning Note

Calendar

This Week – Fed Wednesday, Closed Thursday, Rebalance/Major Options Expiration Friday feel like the drivers.

Monday – Empire Manufacturing (survey work has been horrible lately).

Tuesday – Retail Sales

Wednesday – FOMC Meeting (market expecting no change), Housing Data

Thursday – Market Closed – Juneteenth

Friday – Philly Fed

Trading Observations

• Opex this week and Fed Wed

• Trump wants a cut, Powell unlikely to give one, we will see

• Oil down despite targeting Iran oil and gas facilities

• While we can wring our hands over valuation https://tinyurl.com/8tzsnmjx [tinyurl.com]

• The wall of worry is high, yet we try and push on  https://tinyurl.com/36p3bp6d [tinyurl.com]

• 6045/6100/6145 resistance vs.  5970/5940/5850 support

• What to make of China? Nvidia $NVDA CEO Jensen Huang: "I’ve told all of our investors and shareholders that, going forward, our forecasts will not include the China market."

• Tariffs: Vietnam and the US will hold a virtual meeting in coming days to continue talks on outstanding issues. The trade agreement reached by the US and China in London left export restrictions tied to national security unresolved, Reuters reported

Futures

DOW +265

S&P +39

Nasdaq +178

Charts/Sentiment

Financials / Consumer / Healthcare

V, MA – Stablecoin issuance is being floated at WMT and AMZN in hopes to usurp the control of Visa and MasterCard. Feels a few years out but something to watch. It’s the banks that stand to lose a lot more than the network folks, but payment systems are likely to be challenged this decade. Baird also saying cross border could get hit on Iran/Israel.

SRPT – Serepta down 40% on talk of their new gene therapy increasing patient death rate.

COF – Credit card data was solid as NCOs were 5.54% vs 5.9% expected. Card loans were up. Autos are fine. This harbinger of a credit crisis isn’t showing major stress.

VSCO – Up 8% on activist investor stake pushing for change.

SG – Sweetgreen up 5% on a WFC buy initiation.

CELH – Up 5% on TD Cowen upgrade on sales growth looking good in the credit card data.

CRCL – Up another 10% - This one has no comps and is an important part of the crypto world, so expect ludicrous pricing for a while IMO.

MSTR – Bought another 10k bitcoin last week. Getting towards 3% ownership.

SCHW- stock has bounced back after a turbulent year marked by a class-action lawsuit and rising costs. The stock is now within striking distance of a record high, powered by rising earnings and renewed investor confidence, Barron’s 

LLY - An experimental drug helped patients lose weight with few side effects, according to the summary of a small study that suggests the company has another foothold in the obesity market.

Technology

AI RAISE: Pano AI, a startup that is using AI to detect wildfires before they explode into massive conflagrations, has raised a $44 million funding round. Says the capital will help it deploy more of its technology in wildfire-prone areas including California and Australia.

AMD: PT hiked at Piper

AMZN: restructuring its healthcare business as the firm looks to grow its footprint in the market (CNBC)

CRCL: +24% Friday and up another 8% in pre ... highest close since debut; $110+ from deal px

CSCO: +1.8% Deutsche upgrading - sees improved visibility towards "durable" mid-single-digit growth in upcoming years for Cisco, with tailwinds from AI, a Campus portfolio refresh, more favorable near-term competitive dynamics in Networking and improved scale in Security. Positive on cap return

ETSY: hard fade during pm session - combo of Yipit live data turning neg again this week + Chinese-backed Temu resumes direct sales to US after Washington-Beijing trade truce

GOOGL – the traditional search engine business is crumbling and while Google should be fine (as they adopt AI-based tools to sustain traffic and benefit from non-search businesses like Cloud, YouTube, and Waymo), the rest of the internet is in a lot of trouble (businesses dependent on search-based traffic will witness enormous headwinds) – Barron’s

MRVL: Custom AI Investor webinar @ 1pm on Tuesday ... after they punted their 6/10 Investor Day

META – To introduce ads on Whatsapp for the first time

Nvidia - NVDA CEO Jensen Huang: "I’ve told all of our investors and shareholders that, going forward, our forecasts will not include the China market." .... https://x.com/TheValueist/status/1933484550971126138 [x.com]

RBLX/PLTR: couple momo names which cont to print highs

ROKU gain 7.5% premarket after the company and Amazon.com Inc.’s Amazon Ads announced a partnership, saying that advertisers will now have access to more than 80% of US households with connected TV though the Amazon DSP marketing tool.

Industrials 

Auto headlines: (1)FORD CEO said the company has yet to see a significant improvement in the supply of rare earths despite the recent US-China meeting in London ... (2)Jaguar Land Rover reduced its F26 EBIT margin outlook from 10% to 5-7% due to tariffs and macro uncertainty

Celanese (CE) Raised to Overweight at Wells Fargo; PT $66

Freeport (FCX) Raised to Sector Outperform at Scotiabank; PT $48

Smurfit WestRock (SW) Raised to Buy at Jefferies; PT $55

Packaging Corp (PKG) Cut to Hold at Jefferies; PT $205

BA - predicted airlines will need 43,600 new aircraft over the next 20 years, with markets like China and Southeast Asia leading the push as greater prosperity gives more people the means to travel.

India aviation regulators, meanwhile, said urgent safety checks would be carried out for dozens of 787 jets in the wake of the Air India crash that killed all but one of the 242 people on board.

CVNA: +2% in pre (-13% last week; snapping 9 wk winning streak) ... Shorts pressed as closed sub $300; outsized laggard on Thur as data pts shifting (JPM lowered ests Fri am - highlighting margin compression

GOING NUCLEAR: Australian uranium producers surge again, Deep Yellow +20%, Silex Systems +21%, Paladin +16%, Boss Energy +14% (expect URA US, URNG LN etf breakouts to extend); Korean nuclear plant exposures also continue to run hot with record highs in the sector

LUV - Southwest Airlines is introducing a new cockpit alert system to help pilots avoid dangerous situations. The Honeywell-designed system provides verbal warnings and text alarms if a pilot is about to use the wrong runway or land on a taxiway.

TSLA shares jumped on Friday after the Trump administration (specifically the National Highway Traffic Safety Administration) said it would take steps to streamline the process for deploying autonomous vehicles without driver controls – Bloomey

Latest Media

$ELF is up +30% after the Rhode acquisition.

Let’s take a look beyond the $1B transaction headline,