July 9th Market Overview

July 9th Market Overview (no fluff)

J.L. Bernstein
July 09, 2024

Happy Tuesday everyone! I woke up feeling better from covid…not worse, so I might be on the up and up. Anyways lets dig in…

Traders are anticipating a soft CPI print on Thursday, which could lead to a rally in the IWM as bond yields drop.
SPX and Nasdaq hit record highs, while Dow Jones lags slightly.
Jerome Powell’s testimony before the Senate and House today and tomorrow is highly anticipated.
A lot of news on the ‘The Magnificent 7,’ including AAPL, NVDA, and NFLX, see positive updates and price target revisions below.

SPX: Hit another record high yesterday, trading slightly higher in premarket (+0.2% to 5584).
Nasdaq: Also at a record high, trading flat at 20,500.
Dow Jones: Slightly higher in premarket, showing signs of a breakout.
Gold: Sold off yesterday (-1.3%), but positioning remains strong.
Oil: Sold off from 84 to 81.5, positioning strong.
VIX: Crushed lower, with bearish positioning supporting equity liquidity.

Upcoming CPI Report: A softer-than-expected print could lift equities and lower bond yields.
Jerome Powell’s Testimony: Market participants await insights from Powell’s address.
Trader Positioning: Weak dollar positioning, strong gold, silver, and oil positioning suggest confidence in a soft CPI.
Technical Trends: IWM approaching a crucial resistance level, potentially poised for a breakout if CPI is soft.

IWM: Positioning shows bearish Put delta ITM, but a soft CPI could lead to a squeeze higher.
TLT: Hedge activity indicates traders do not expect significant downside or yield spikes.
NVDA: Strong bullish positioning with Keybanc raising the PT to 180 from 130. Increased exposure on 140 for August expiry.
SOFI: Barclays lowered PT to 8 from 10, maintaining an equal-weight rating due to valuation concerns.
CMG: Stifel raised PT to 70 from 65.40, citing strong Q2 traffic performance but caution about short-term risks.

AAPL: Showed stronger demand for its iPhone 15 and increased iPhone 16 expectations. Piper Sandler raises PT to $225.
MSFT: OpenAI’s China ban doesn’t affect Microsoft’s Azure China, allowing continued AI access for Chinese businesses.
META: Introduced a “play now, pay later” option for the Meta Quest 3 headset.
GOOGL: Global search share increased to 91% in June due to AI features enhancement.
NFLX: Cowen raised PT to 775 ahead of expected strong earnings and outlook announcements.

Crypto Stocks: Higher this A.M. as BTC recovers to 57,300.
Hut 8 (HUT): Finalized agreements for a site in West Texas with 205 MW of power capacity.
Coinbase (COIN): Mizuho reiterates underperform rating, believing consensus expectations are overly optimistic.
Alibaba (BABA): CEO confident in AI investments, believing they justify the returns.
PepsiCo (PEP): Jefferies lowers PT to 200, indicating expected slow down in snacking.
Boeing (BA): FAA orders inspection of 2600 Boeing 737 airplanes due to potential oxygen mask issues.

Oil Companies: Resuming operations in Texas post-Hurricane Beryl.
Semiconductors: Mixed sentiment with Japanese investment of 31B through 2029, despite bubble concerns.

Traders hedging on TLT indicate no expected significant downside, with supportive call delta ITM on 92.

Jerome Powell’s Congressional Testimony: Market eagerly anticipating his comments today and tomorrow.
NATO Summit: Opens today, Biden’s coherence under scrutiny.
Government Oversight: House Democrats meeting behind closed doors at 9 am ET today.

Happy Tuesday everyone! PLEASE forward this to your investor and trader acquaintances. I need help spreading the word out so our reader lists grows and I can continue affording my annual Bloomberg terminal fee (lol)

-JB

Note: This newsletter is intended for informational purposes only.