Morning Note

Calendar

This Week – Almost no earnings and the Fed is in a quiet period, pointing to a trade related week for creating volatility outside CPI Wednesday.

Wednesday – CPI, ORCL earnings

Thursday – PPI, Initial Claims, ADBE earnings

Friday – U Michigan.

Trading Observations

• US-China talks wrap up with not a lot new, but both making positive statements, so for the moment should quell fears (for now)

• July 9th now less than a month, so hopefully we get signs Trump extends deadline and we FINALLY get some concrete agreements, but as we get closer will cause more trepidation

• CPI came in light helping yields

• Bessent on Capitol Hill after the open

• 6000 now first support vs. 6100/6147 (old highs) resistance

• II BULLS tick up slightly to 39.2% from 37.7% (still well below the 60% headwind level and really surprising given within a stone's throw from ATH!)

• Skepticism remains high https://tinyurl.com/yhsuh6ru [tinyurl.com] 

• Small biz optimism improving https://tinyurl.com/pzbwyv2z [tinyurl.com]

• Technicals that could continue to support the rally https://tinyurl.com/5xt7bkc5 [tinyurl.com]

• For the bears, insider selling ramping https://tinyurl.com/ykmepvrn [tinyurl.com] 

Futures

DOW +63

S&P +13

Nasdaq +60

Charts/Sentiment

Financials / Consumer / Healthcare

CHWY – Down 5%. Earnings fine, run into earnings left it vulnerable.

SFIX – Up 18% - They have returned to growth, and has high short interest.

URBN – Upgraded to outperform at Baird. Nuuly a nice growth lever (clothing rental).

RV Traffic – Survey work points to continued mid-single digit declines.

BFH – Net Charge offs were worse, but some hurricane related items were mentioned. The rest looks fine. Credit is creaky in some spaces but isn’t broken.

MAC (high end malls) – GS note on MAC updated declines in FFO expected of 9.1% for 2025 and 1.6% for 2026.

JPM Jamie Dimon warned that data will likely start deteriorating as the full effects of all the recent policy changes (tariffs, immigration/deportations, etc.) begin flowing through the economy.

• Odd, Jaimie Dimon is negative.

PE/venture capital – Yale, a pioneer in shifting endowment capital into private/illiquid investments, is trying to sell up to ~$6B worth of stakes in various PE and venture funds as the school looks to bolster its liquidity amid pressure from Washington - NYT

UNH – Baird Downgrading to Neutral - PT $312 from $356. The most important component to UNH's long-term story is v28's impact on OptumHealth. We ask the question: "Will OptumHealth successfully navigate v28 risk model revisions and help usher in a new era of Value-Based Care, or is this the beginning of a rerun of the PPM implosion 25 years ago?"   Will be deemed late. Their due diligence shows the long-term story has now officially changed.

THC – Down 10% after Fuzzy Panda says it’s a short. Headline they overcharged Medicare considerably (a long time ago).

Technology

AAPL: Apple execs say revamping Siri and integrating OpenAI technology in iOS 26 for enhanced AI capabilities beyond chatbots .. doesn’t want to launch “just another chatbot” and plans to integrate AI deeply into its operating systems (such that users don’t even realize they’re using AI) (WSJ)

ADBE: #s Thur night ... huge laggard as viewed at serious risk of AI

AMD: +1.2% cont to see demand into 6/12 AI Advancing event - wouldn’t be surprised to see some derisking given how well this stock has worked since ppl circled this date on their calendar in early May

ANET are down 1.3% in premarket trading, after BNP Paribas Exane downgraded the communications equipment company to neutral from outperform.

CHWY: -4% knee jerk lower; missing buy side expects; margins bit worse ... Conf call 8am ET ... Tough setup given how crowded select Internet / non China exposed names had become

ETSY: -2.6% on Arete downgrade (yet to see details; cutting to SELL). shrs fell 3.2% Tues snapping 10-day winning streak

GOOGL: Search/ad unit layoffs = positive for margins (AI is ramping quick enough to more than offset search declines?)

GTLB: -12% revs light of buyside expects (+27% vs +28%); cRPO miss. Net retention rate inlnie. Print only to embolden bears' fears around AI headwinds. FY26 rev guide below buy side

META: +1.2% ystrdy / remains top 2-3 long amonst all investors; Zuck's deal for Scale AI reinforces his messaging that 2025 remains critical for AI dominance. No sign of spend pause anytime soon; Cleveland also had positive checks; UBS revising up #s as well

MU: up 7 in a row ... pricing momentum strong; easing chip curbs tailwind; pretty clean story (memory pricing upward bias - chatter has hiked Jun DDR4 prices by 50%, sending 8Gb and 16Gb spot prices soaring; HBM ramp; Blackwell data pts bullish into 2H). Setup into late June print getting tougher each day

NVDA / QUANTUM: NVIDIA GTC: Huang says CEO: "There’s an inflection point happening in quantum computing" ... vs Huang mid-Jan: "quantum computers are as much as 30 years away" ... QUBT+8%, RGTI+5%, QBTS+2%

PINS: high touch flows better to sell (HF driven) BUT stock acted well in alpha; Cleveland said performance+ Adoption is ramping and boosting ROI; also positive checks from UBS calling out 15% y/y spend in Q2 (up from 9%)

ORCL vs ADBE: Adobe #s tmrw night ... sentiment polar opposite here. YTD, Oracle has outperformed by 13%; by 18% since early April lows

SFIX shares are up 15% in premarket trading, after the personal styling company reported its third-quarter results and raised its full-year forecast.

TSLA: +20% off Thur lows ... Tesla has set June 22 as a tentative launch date for the start of its robotaxi network

TSM: +2% overnight / contd momentum post bullish May sales, robust AI commentary; According to MoneyDJ and the Economic Daily News, TSMC’s first CoPoS pilot line is set for 2026, with mass production targeted by end of 2028 - 2029.

Industrials 

AMSC fell 18% in US premarket trading after the grid systems provider was said to offer shares at a discount.

Auto headlines: (1)GM investing $4B to increase US gasoline vehicle production, responding to tariffs and low EV demand (Axios) ... (2)Chinese auto makers vow to shorten payment terms for suppliers (WSJ)

First Solar (FSLR) upgraded to buy from hold at Jefferies

SunRun (RUN) downgraded to underperform from hold at Jefferies

Tesla (TSLA) trading up 2% - ‘Tentative’ 22-June launch date for public robotaxi rides – tweet by @elonmusk – also of note, Elon Musk says he regrets his recent comments about President Trump - X

Latest Media

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

Lets take a look beyond the $1B transaction headline