July 7th Market Overview

Happy Tuesday

The Dow hit a record this morning and gave it back by the time I was heating up my publix sub leftovers for lunch. Tech sold off, oil ran on Middle East news, and buyers rotated into banks and healthcare. Money isn't leaving this market and all is good imho. It's just rotating a bit.

Let’s dig in...

Today's Big Picture

Iran Attacks Ships, US Pulls The Oil License

Iran hit three vessels near the Strait of Hormuz in the past day, including a Qatari LNG tanker. The US Treasury responded by revoking the license that let Iran sell oil legally. Brent pushed above $76 and the naval coalition raised the strait's threat level to severe. The June interim deal is hanging by a thread.

The Memory Trade Is Now A Bear Market

Micron, Samsung, SK Hynix and the Roundhill Memory ETF are all well off their recent highs. Semiconductors have lost roughly $1.5 trillion in market value since June 25, with Micron alone shedding nearly $350 billion. The damage spread past memory today to equipment makers like Applied Materials and Intel.

Financials And Healthcare Hit Records

Bank, insurance, and large-cap healthcare ETFs all touched all-time highs this morning. Wells Fargo's Mike Mayo called this one of the best banking environments he's seen in three decades, citing record capital markets activity and loan growth. One caution: the financials chart is overbought on momentum measures. Rallies this fast usually need a breather.

Market Overview

Index Performance

Stock Spotlight

Nvidia $NVDA ( ▲ 0.3% )  
closed green while the rest of the chip sector sold off. On a day this red, buyers treating one name differently tells you something.

Rivian $RIVN ( ▼ 17.13% )  
fell hard after announcing a 75 million share sale to fund a Department of Energy loan requirement for its Georgia plant. The raise makes sense, but shareholders are the ones paying for the buildout.

Caterpillar $CAT ( ▼ 3.14% )  
fell as the AI unwind hit industrials. The equipment maker had become a popular proxy for data center power demand, and proxy trades get sold with the real thing.

SpaceX $SPCX ( ▼ 6.18% )  
drifted lower on its first day in the Nasdaq-100, back near its opening-day price of $150. Forced index buying couldn't overcome a weak tape.

Eli Lilly $LLY ( ▲ 3.0% )  
caught a bid as the rotation favored healthcare. JPMorgan raised its target to $1,400 ahead of August earnings, expecting another big Mounjaro quarter.

Big Name Updates

Amazon $AMZN ( ▲ 0.55% )  
priced a bond sale of at least $25 billion, four months after borrowing $37 billion. Big Tech is funding the AI buildout with debt at a pace we've never seen.

Walmart $WMT ( ▲ 0.69% )  
rose after announcing price cuts on ground beef, Coca-Cola and other staples. Trump says he requested the move for the country's 250th birthday.

Adobe $ADBE ( ▲ 2.16% )  
climbed even after Bank of America reinstated coverage at underperform with a $190 target. When a stock rallies on a bearish call, the bad news is already priced in.

Other Notable Company News

USA Rare Earth $USAR ( ▼ 8.97% )  
fell as lawmakers expanded their inquiry into the government's $1.6 billion investment in the company.

First Solar $FSLR ( ▼ 2.21% )  
rose after Deutsche Bank upgraded it to buy, citing a potential trade policy shift.

Shell $SHEL ( ▲ 4.72% )  
raised its gas production guidance despite the Middle East conflict still hampering Qatari output.

Plug Power $PLUG ( ▼ 6.44% )  
secured a 50MW electrolyzer order for a hydrogen hub in Australia.

Wall Street Is Crowded Into The Wrong AI Stocks

The ones supplying the chips, the cloud capacity, and the data tools everything else runs on.

Stockearnings put together a free report on 9 AI stocks I am watching. 

No eBook, no homework. Just the list and the reason each one made it.

See the 9 stocks now

_{Today’s Sponsor}

Sector Watch

Bond Market

Yields climbed across the curve with the 10-year back around 4.54. The New York Fed's consumer survey put one-year inflation expectations at 3.7, the highest in nearly three years. The five-year reading held at 3.0, which is the number keeping the Fed calm for now.

Policy Watch

The May trade deficit came in at $77.6 billion, up sharply from April's $54.6 billion as exports fell and imports rose. Slightly better than forecast, but the widening trend is the story.

• At the NATO summit in Turkey, the alliance agreed to buy up to ten Saab surveillance aircraft, replacing its aging Boeing fleet.

• Member nations remain under pressure to hit last year's target of 5 percent of GDP on defense by 2035.

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.

Earnings Season Kicks Off

Levi Strauss reports Wednesday, PepsiCo Thursday, Delta and Hyatt Friday. Consumer names give us a cleaner read on the actual economy than anything tech-adjacent right now.

Treasury Auctions

The 10-year note prices Wednesday and the 30-year bond Thursday. With inflation expectations rising, weak demand here pushes yields higher and stocks will feel it.

BlackRock ETF Launch

The iShares Nasdaq 100 ETF starts trading Thursday under IQQ, undercutting Invesco's QQQ on fees.

Thanks for reading - you are now the more informed 🙂

- John

P.S. Every Saturday I send premium readers the market themes I'm personally positioning around.

Today’s Sponsor

Apple’s Starlink Update Sparks Huge Earning Opportunity

Apple just secretly added Starlink satellite support to iPhones through iOS 18.3.

One of the biggest potential winners? Mode Mobile.

Mode’s EarnPhone already reaches 490M+ users that have earned over $1B, and that’s before global satellite coverage. With SpaceX eliminating "dead zones," Mode's earning technology can now reach billions more in unbanked and rural populations worldwide.

Their global expansion is perfectly timed, and investors like you still have a chance to invest in their pre-IPO offering at $0.52/share.

With their recent 32,481% revenue growth and newly reserved Nasdaq ticker, Mode is one step closer to a potential IPO.

Tap into a $1T opportunity — invest now at just $0.52/share and get up to 20% bonus.

^{Please read the offering circular and related risks at invest.modemobile.com. This is a paid advertisement for Mode Mobile’s Regulation A+ Offering.}

^{Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.}

^{The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.}