July 11th Market Overview

Happy Thursday everyone. I can almost smell that weekend beach air!

Alot of folks have bought my book on swing trading. Please send me over any thoughts or feedback. I love talking shop and trading/investing ideas!

Lets dig in…

Executive Summary

• US CPI: CPI came in softer than expected, as I anticipated. EUR/USD and GBP/USD jumped, while the Dollar plunged. Gold broke $2,400, Silver rose 3%, and oil moved slightly higher. IWM (Russell 2000) jumped, experiencing a squeeze higher.

• Delta Airlines (DAL) Struggles: Weak Q2 earnings with lowered future guidance impact the airline sector.

• Significant Collaboration: TSM and NVDA partner on next-gen HBM, impacting the semiconductor industry landscape.

Market Overview

• S&P 500 (SPX): Closed at a record high of 5632, flat in premarket trading.

• Nasdaq (NDX): Closed at 20650, flat in premarket, targeting 21k.

• Dow Jones (DJI): Now trading at 39,670, with bullish positioning noted.

• Gold: Trading at 2,415, with strong bullish sentiment on higher calls.

• Oil: Flat at $81.68; traders are keenly watching CPI’s impact.

• VIX: Traders are extremely short on volatility; a soft CPI could cause further VIX crush.

Key Market Drivers

• US CPI Data: Expected to come in soft; this could spur further market gains.

• Fed’s Dovish Stance: Fed Chair Powell’s comments on unemployment risks suggest potential for rate cuts.

• Global Economic Data: Strong UK GDP numbers and steady German inflation aid market sentiment.

Stock Spotlight

• Delta Airlines (DAL): Reported weaker-than-expected Q2 earnings, impacting sector sentiment. International passenger revenue grew, but domestic revenue was severely hurt by fare discounting.

• SoundHound AI (SOUN): Up 9% today after a significant 22% gain yesterday, driven by the rollout of its AI technology in Stellantis vehicles.

• Costco (COST): Stock rose after increasing annual membership fees and receiving multiple analyst upgrades.

• Pfizer (PFE): Higher on a price target increase by Barclays to $30 due to progress on its oral obesity pill.

Other Magnificent 7 Updates

• TSM & NVDA: Announced an alliance to develop next-gen HBM, expected to mass-produce in 2026.

• Apple (AAPL): Settled the EU antitrust probe, agreeing to open payment tech to rivals. Vision Pro sales are low, and iPhone 16 may receive an upgrade in charging capabilities.

• Tesla (TSLA): Increased the Model 3 price in Germany due to higher import tariffs on cars from China.

Other Notable Company News

• Rivian (RIVN): Continues to show strong upside potential with traders buying calls on RIVN 20C.

• Booking Holdings (BKNG): Barclays raised its price target to $4300, expecting conservative guidance and a possible beat on upcoming earnings.

• AMD: Following the acquisition of Silo AI, AMD received a price target increase from Stifel to $200.

• QuantumScape (QS): Partnering with Volkswagen’s PowerCO to industrialize solid-state batteries.

Sector Watch

• Airlines and Travel: Weak earnings from DAL have influenced the entire sector, with companies like UAL, AAL, CCL, and ABNB facing lower sentiment.

• Semiconductors: Positive developments for TSM and NVDA but potentially negative for MU.

Bond Market

• US Treasury Yields: Traders are watchful of bond yield movements post-CPI as soft CPI can lead to lower yields, benefiting equities.

Policy Watch

• Fed Policy: The dovish stance of the Federal Reserve implies potential rate cuts down the line, contingent upon economic data.

• China Market Rules: Tightening short-selling regulations to stabilize its stock market.

I hope you have a wonderful rest of your day, seriously!

- JB

Note: This newsletter is intended for informational purposes only.