MARKET WRAP

Little in the way of major headlines today on what would have been the first day following the 90 day tariff pause. Stocks saw some first hour volatility but then a steady grind higher into the close. The FOMC minutes, released late in the day, were largely a non-event. However, treasury yields ticked lower aided by a good treasury auction. That dip in yields and lack of news provided a a tailwind for stocks, especially IWM. On the day: SPX +0.6%, QQQ +0.7% and IWM +1.1%.

As mentioned, the US10YY pulled back from a recent move higher, now 4.34%. Gold bounced slightly, oil was flat, as was the dollar. The VIX got pummeled the last two days and closed under 16 (for the first time in months), signaling no fear for any trade war escalation near term. (although after hours we got a tariff threat pointed at Brazil).

After hours: Following a grind higher into the close, both SPY and QQQ are a tick lower after hours. There is a headline of a threat of 50% tariffs on Brazil but it’s not moving markets a ton yet.

• MRKT Call: A look at the banks’ pullback into next week’s earnings, an overbought blip or a sign into earnings? Then a deeper dive on commodities, the dollar, rates, individual tickers and your questions.

• RiskReversal Pod: Brian Belski joins the pod with an updated SPX target, small and mid cap opportunities and factors that could drive market performance.

MRKT MATRIX: TODAY’S TOP STORIES

• S&P 500 rebounds after 2 days of losses, Nvidia leads gain as it reaches $4 trillion market value (CNBC)

• Google’s Unloved Stock Makes It a Big Tech Bargain (WSJ)

• Tariffs are already squeezing corporate margins, new survey finds (Axios)

• Two Kevins Battle to Be Next Fed Chair in Trump’s Apprentice-Style Contest (WSJ)

• Nvidia hits $4 trillion market cap, first company to do so (CNBC)

• Copper Market in Turmoil as Trump Touts 50% Tariff on US Imports (Bloomberg)

• Why Americans Can’t Buy the World’s Best Electric Car (NYTimes)

• Merck to Buy Verona for $10 Billion as Patent Cliff Looms (Bloomberg)

• Microsoft gets an upgrade from Oppenheimer, which says AI potential not fully priced in (CNBC)

• Starbucks China attracts bid valuing the coffee chain at up to $10 billion, sources say (CNBC)

• Meta Wants to Reboot the Metaverse. Why AI Glasses Could Hold the Key. (Barron’s)

• Linda Yaccarino steps down as CEO of Elon Musk’s X (CNBC)

WHAT’S NEXT?

Implied volatility continued to unwind, with the VIX sliding below 16 for the first time in months. That marks a notable shift from just last week, when we flagged how short-term vol measures were quietly ticking higher even as stocks were making new highs. In hindsight, that bump in volatility was likely tied to jitters around this week’s tariff deadlines, which were originally slated for today. But with that can once again kicked down the road, and despite a few headlines earlier in the week that briefly rattled markets, it seems traders are back to assuming delays are bullish and the worst-case trade war scenarios aren’t likely to play out.

Tomorrow sees jobless claims, as well as some Fed Speak. Do note that Waller has been one of the Fed governors most vocal about the potential for earlier rate cuts (should the data continue to support that view) and may say similar in remarks tomorrow, which equities tend to like even if they’ve heard it before. Earnings include Delta Airlines before the bell.

Thursday, July 10th

• Pre-market: DAL 6.5%, CAG 4%

• 8:30am - Initial Jobless Claims

• 10am - Fed Musalem Speech

• 1:15pm - Fed Waller Speech

• 2:30 - Fed Daly Speech

• After-hours: LEVI 6.5%

Notable Gainers Today: XHB +3.2%, COIN +5%, AVGO +2.2%, AES +20%, BA +3.6%, MRK +2.6%, NVDA +1.8%

Notable Losers Today: ADBE, -2.2%, FICO -6.3%, KO -1.1%, DIS -1%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Stocks Rebound After Tariff Turmoil

• Analysis: S&P e-minis, JPM/Banks, US10YY, Crude, Dollar, XLE, Copper, Gold, Bitcoin, AAPL, GOOGL, META, 

• FactSet Earnings Insight: Q2 earnings estimate growth is lowest since Q4 2024.

• Your Questions Answered: 

  • What’s going on with Berkshire? It’s below the 200 MA.

  • Better short today, TSLA or PLTR?

Learn more about our sponsor, CME Group.

Watch RiskReversal Podcast’s newest episode: Brian Belski: 6700 SPX Calls, Tax Bill Tailwinds & Blowoff Top Potential

Dan Nathan hosts Brian Belski, Chief Investment Strategist at BMO Capital Markets, on the Risk Reversal Podcast. The conversation covers a range of topics including Belski's team-focused approach, his updated S&P 500 price target of 6,700, and the factors driving market performance. They discuss key drivers such as the tax bill, trade deals, and the geopolitical climate. Belski highlights his investment strategies, including sector preferences in technology, communication services, consumer discretionary, and financials. He emphasizes the importance of long-term investment and analysis, challenges faced, and the potential for a future bear market. The discussion also touches on value investing, small and mid-cap opportunities, and the impact of macroeconomic policies on markets.

Learn more about our sponsor Betterment, Current, and RBC Capital Markets.

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