MARKET WRAP

Stocks pulled back from all time highs today, despite the announcement pushing the tariff implementation to the end of the month. New tariffs on BRICS and threatening letters released today added to a sense of stalled progress overall. The decline wasn’t steep and SPX did hold the 6200 level well, but volatility is ticking higher. On the day, SPX -0.8%, QQQ -0.8% and IWM -1.6%.

Also of note, the US10YY was higher today, now 4.39%. Oil is also creeping higher, now back to $68. Gold was more or less flat, while the dollar was higher. The VIX, which was showing signs of bottoming last week closed the day higher, just below 18 now.

After hours: The market closed the day decently off its intraday lows but both SPY and QQQ are down about -0.1% after hours.

• MRKT Call: Peter Boockvar of Bleakley Financial and author of The Boock Report joins Dan to discuss the latest trade news, where we likely end up on tariffs, and what effects we’ll see on the economy, corporate profits and more.

• RiskReversal Pod: Dan is flying solo, discussing the latest on the trade wars, the fear and greed index, and looking ahead at FOMC minutes, jobless claims and more.

MRKT MATRIX: TODAY’S TOP STORIES

• Dow slides more than 400 points as new Trump tariffs incite sell-off (CNBC)

• Trump Sets Aug. 1 Start for Tariffs Ahead of Wednesday Deadline (Bloomberg)

• Donald Trump threatens extra 10% tariff over ‘anti-American’ Brics policies (Financial Times)

• Looking Beyond the U.S. for Trade, Canada Begins Shipping Natural Gas to Asia (NYTimes)

• OPEC Plus Agrees to Pump More Oil in August (NYTimes)

• Elon Musk Is Running Out of Road in China (WSJ)

• Has There Ever Been a Better Time to Buy an EV? (WSJ)

• Chinese sales of foreign phone makers, including Apple, drop 9.7% in May (Reuters)

• Former OpenAI Board Member Questions Zuckerberg AI Hiring Spree (Bloomberg)

• The Companies Betting They Can Profit From Google Search’s Demise (WSJ)

• Retail investors reap big gains from ‘buying the dip’ in US Stocks (Financial Times)

• Meme Stocks and YOLO Bets Are Back and Fueling the Market’s Rally (WSJ)

• Homeowners Who Gambled on Lower Rates Are Paying the Price (WSJ)

WHAT’S NEXT?

Implied volatility ticked higher. While SPX options are still only pricing in about a 1.2% expected move through Friday, we’re unlikely to see the super low pricing we saw last week again for some time. The VIX, which looks out a month, had seemingly found a bottom last week and ticked back above 18 today. Whether that translates into a deeper pullback remains to be seen — but today’s action was a reminder that some of the speculative froth we’ve seen in recent weeks may have been hinting at an upcoming short-term top/reversal.

The market is likely to remain reactive to the trade headlines for the next few days, and may begin to test the “buy the dip/TACO” playbook. To that point, the SPX briefly tested the 6200 level intraday and held up reasonably well, suggesting that dip-buyers are still out there. That resilience would be tested if several shaky sessions went back to back, with a move towards 6000 likely the big test on any real pullback (if any) over this week or next.

Also of note today was the move in IWM (-1.6%) and some other more speculative names we’ve been highlighting late in this rally. Keep an eye on that space for some sense of how much of the recent rally over the past two weeks was a late rally mania. Also keep an eye on the expected moves below. As noted on Sunday’s preview, they could quickly become underpriced (like today) which would then see traders scrambling for protection in upcoming weeks, furthering the chance of near term market swings.

• Tuesday, July 8th - Expected Moves

  • SPX/SPY: 0.5%

  • QQQ: 0.7%

  • IWM: 1%

Notable Movers Today: Tesla -7%, FSLR -4%, PLTR +3.5%, BA +1.3%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Investors Await Next Move In Trump's Trade Gambit

Peter Boockvar joins to talk the latest tariff/trade agreement news, the probably effects on import prices, consumers, trade deficits, and corporate profit margins. Also, what a China deal might finally look like, the effect of a declining dollar on the overall tariff costs, last week’s jobs number and alot more. 

• Analysis: SPX, DXY, US10YY, Gold, Bitcoin, JPM, GS, COST, WMT, DIS, NKE, 

• Your Questions Answered:

  • Peter, At what level do you believe that the $DXY becomes problematic to equity market?

Learn more about our sponsor, MoneyLion.

Watch RiskReversal Podcast’s newest episode: Greed Is Back, But Is It Good For The Markets?

Dan is flying solo to discuss a better-than-expected June jobs report, a strong market performance with the SPX and NDX seeing significant gains, and specific stock performances like Nvidia and Taiwan Semi as major tech leaders. The discussion also includes the impact of Trump's trade deals, geopolitical tensions, and sentiment indicators like CNN's Fear & Greed Index. Lastly, the episode touches on the implications of OPEC's decision on oil production and the upcoming events such as the Fed meeting minutes and initial jobless claims.

Learn more about our sponsor CME Group, iConnections, and SoFi.

A MESSAGE FROM OUR PARTNER

Subscribe to the RiskReversal YouTube Channel and drop a comment/like to show your support

Want to check out past podcast episodes? Go to wherever you get your podcasts and type in “RiskReversal Media”

We want to hear your feedback! Reply to this email with any comments or questions