July 6th Market Overview

Happy Monday

Dow closed above 53,000 today. First time ever. Chips led the charge, a day after Foxconn's sales numbers gave everyone a reason to believe the AI trade still has life in it. Trump plugged Dell from the White House this morning, and the stock actually moved on it.

Let’s dig in...

Today's Big Picture

AI Trade Finds Its Footing
Foxconn's weekend sales beat is the clearest signal yet that AI chip demand hasn't cracked. Samsung reports tomorrow and is expected to post a profit jump close to 18 times last year's number. A clean print there should put a lot of the recent chip stock jitters to bed.

Oil Keeps Sliding on a Supply Glut
OPEC+ raised output again and ship traffic through the Strait of Hormuz picked back up over the weekend. Both are draining out the inflation premium that built into oil during the Iran standoff. Cheaper oil gives the Fed more room, but a break in that ceasefire is still the one thing that could flip this fast.

Trump Turns a Photo Op Into a Stock Move
Trump told Americans to buy a Dell computer at this morning's Trump Accounts event, and Dell moved on it. AMD moved even more after Goldman raised its price target well above where the stock trades now. Worth watching how much more of this we get as Trump Accounts stay in the news this week.

Market Overview

Index Performance

Stock Spotlight

TeraWulf $WULF ( ▲ 4.67% )  
signed a 20 year lease with Anthropic for a data campus in Kentucky. The deal is worth roughly $19 billion over its initial term and will support about 401 megawatts of computing load once built out.

Micron $MU ( ▲ 1.18% )  
signed a long term supply deal with Ford to provide chip technology for the automaker's vehicles. Both stocks moved higher.

Solstice Advanced Materials $SOLS ( ▼ 15.14% )  
agreed to buy Element Solutions for more than $12 billion in cash and stock. Solstice fell hard on the deal even though it priced Element at a real premium.

Big Name Updates

Nvidia $NVDA ( ▲ 1.02% )  
pushed back on a report claiming its next generation Kyber AI servers face a year long delay. The company said its roadmap is intact, and the stock finished close to flat.

Strategy $MSTR ( 0.0% )  
sold about $216 million of bitcoin last week to help cover dividends on its preferred stock. It still holds more than 843,000 bitcoin.

Other Notable Company News

ONDS Technologies $ONDS ( ▲ 5.26% )  

agreed to buy autonomous aircraft maker DZYNE Technologies for close to $876 million in cash and stock.

Penguin Solutions $PENG ( ▲ 10.15% )  
got a price target bump from Rosenblatt ahead of Tuesday's earnings report.

NN Inc $NNBR ( ▲ 6.02% )  
landed its first orders to build parts for a robotic surgery platform.

Novartis $NVS ( ▼ 2.76% )  
agreed to buy UK cancer drug biotech Myricx Bio for up to $1.5 billion.

JetBlue $JBLU ( ▲ 0.33% )  
got downgraded by Raymond James, who sees a tougher road ahead versus rivals like Frontier.

Intel $INTC ( ▲ 2.53% )  
reportedly fixed yield issues on its 18A chip process, with Oregon and Arizona output ramping toward 30,000 wafers a month.

Today’s Sponsor

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Sector Watch

Bond Market

The dollar strengthened against a basket of currencies while the yen stayed pinned near multi decade lows. The 10 year yield held mostly steady. Wednesday brings minutes from the Fed's first meeting under new chair Kevin Warsh, though don't expect much detail given how little he's said publicly so far.

Policy Watch

Fed
Waller said the risks the Fed is watching have completely flipped over the last year. Inflation is picking up while the labor market steadies out, which is a different problem than the one he was fighting when the Fed cut rates three times last fall.

Fiscal and Trade

• OPEC+ agreed to another output increase for next month, adding to the glut pulling oil down.

• Traffic through the Strait of Hormuz kept recovering over the weekend, another sign the ceasefire is holding for now.

International
Samsung's earnings tomorrow and SK Hynix's Nasdaq listing this week are the two clearest tests left of whether the AI chip story still holds up.

What to Watch

The AI company quietly automating every Walmart distribution center. 
23 billion in orders on the book.

It's just one of seven names in this free MarketBeat report.

SK Hynix Nasdaq Debut
Starts trading later this week in one of the largest listings ever. A good read on how much appetite is left for AI infrastructure names.

Fed Minutes Wednesday
First minutes under new chair Kevin Warsh. Given how little he's said publicly so far, don't expect much new here.

Thanks for reading - you are now the more informed 🙂

- John

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