June 24th Market Overview

Happy Tuesday

Markets are acting like the Middle East crisis is over, but I'm not 100% buying it. Sure, Trump's Iran oil flip sent crude crashing and tech flying, but that consumer confidence number was bad and nobody seems to care. Sometimes I wonder if we're all just pretending everything's fine because the alternative is too scary to think about.

For now I’m focused on where the volume and price action is (bullish) while remaining cautious.


Let's dig in...

Executive Summary

1. Markets bet the ceasefire holds: All major indexes climbed as traders decided the Israel-Iran conflict is done escalating, with the $VIX fear gauge dropping over 12%.
   

2. Oil crashes on Trump's Iran pivot: West Texas Intermediate fell to $64.51 after Trump said China can keep buying Iranian crude - a complete about-face on sanctions that nobody saw coming.
   

3. Chip stocks catch fire: Advanced Micro Devices $AMD ( ▼ 0.43% ) and Broadcom $AVGO posted big gains on analyst upgrades, with $AVGO hitting fresh all-time highs.
   

4. Carnival crushes earnings: Carnival Corporation $CCL beat expectations with 35 cents per share versus 25 cents expected, showing people still want to cruise despite Tariffs and chirps of economic slowdown.

Market Overview

Key Market Drivers

1. Middle East conflict contained: Iran's response looked designed to save face without escalating. Trump saying "ISRAEL is not going to attack Iran" sealed the deal for traders who decided this is over.
   

2. Trump flips the script on Iran oil: His Truth Social post letting China buy Iranian crude sent oil tumbling for the second straight day. Complete reversal from the maximum pressure playbook.
   

3. Powell holds his ground: Fed Chair told Congress they're in no rush to cut rates, wanting to see how tariffs play out. Two other Fed officials disagree and want July cuts - creating some internal tension.
   

4. Consumer confidence tanks: Conference Board index fell to 93 versus 99.5 expected. Folks are clearly worried about tariffs, even as the White House tries to calm things down.
   

Stock Spotlight

Advanced Micro Devices $AMD ( ▼ 0.43% ) climbed after Melius upgraded to buy, bumping their target to $211 from $135. They think the market is finally pricing in long-term GPU upside. CFRA also upgraded on AI chip momentum.

Broadcom $AVGO ( ▲ 1.68% ) hit fresh all-time highs after HSBC upgraded to buy with a $400 target. They're bullish on Broadcom's custom chip business and expect big revenue beats ahead.

Carnival Corporation $CCL ( ▲ 1.08% ) crushed earnings with 35 cents per share versus 25 cents expected. Revenue hit $6.33 billion, beating the $6.21 billion estimate. CEO called cruises "incredibly stupid value" - people still want to vacation.

Tesla $TSLA ( ▲ 0.36% ) launched robotaxis in Austin over the weekend. Barclays kept their equal weight rating at $275, saying the launch is cool but scaling remains the real challenge.

Big Name Updates

Apple $AAPL ( ▲ 0.73% ) is reportedly ready to make EU concessions on App Store rules to dodge fines. Also signed a new Apple TV+ content deal and became a major customer for Taiwan Semiconductor $TSM ( ▲ 0.46% ) advanced packaging alongside NVIDIA $NVDA ( ▲ 1.09% ) .

Microsoft $MSFT ( ▲ 1.72% ) hit another record high, pushing market cap above $3.6 trillion. Stock has won five of the last six sessions.

Amazon $AMZN ( ▲ 1.62% ) talked up its vision where "e-commerce and retail stores grow together" - sounds like more physical expansion coming.

JPMorgan Chase $JPM ( ▲ 1.77% ) touched record highs as banks caught the risk-on wave.

Other Notable Company News

Super Micro Computer $SMCI ( ▼ 0.1% ) announced a $2 billion convertible note offering.

Compass Pathways $CMPS ( ▼ 3.4% ) hit primary endpoints in depression trials but shares still fell - classic biotech move.

Estée Lauder $EL ( ▲ 0.23% ) got a Deutsche Bank upgrade to buy, target raised to $95 from $71 on China diversification progress.

Wolfspeed $WOLF ( ▲ 51.99% ) announced debt restructuring to slash $4.6 billion in obligations and cut interest costs.

Sector Watch

Bond Market

Treasury yields dropped despite the stock rally - the 10-year fell to 4.301% as bond traders focused on that ugly consumer confidence number. Money flowed into government bonds even as stocks ripped up, investors aren't convinced the economic picture is as rosy as equity markets suggest.

• Consumer confidence tanked to 93 versus 99.5 expected - that's a real miss

• Bonds pricing in economic worry (smart money) while stocks party on geopolitical relief

• Classic divergence between what bond and equity markets are seeing

Policy Watch

Powell's on Capitol Hill getting grilled while his own Fed colleagues are going rogue. Two Trump appointees recently floated July rate cuts, directly contradicting Powell's "wait and see" approach. The Fed Chair stuck to his guns today, saying tariff uncertainty means they need to be patient.

On the administration side:

• Kevin Hassett says trade deals are on hold until the tax bill passes Congress

• July 9 tariff deadline approaches with no new agreements announced

• Iran oil policy reversal could ease some inflationary pressure

The political pressure on Powell is real. Trump called him "very dumb" and "hardheaded" right before today's testimony. The Fed's supposed independence is getting tested daily, and markets are starting to notice the internal fractures.

What to Watch

1. Fed's civil war gets messier: Powell's playing defense while two of his own colleagues want July cuts. Watch for more Fed speeches this week - someone's going to break ranks publicly.
   

2. Middle East ceasefire on thin ice: Both sides already accusing each other of violations. Any real escalation sends oil flying and gold soaring again.
   

3. Consumer confidence crater matters: That drop to 93 was brutal. Friday's personal spending data will show if Americans are actually pulling back or just worried.
   

4. Chip rally has legs or not: $AMD and $AVGO upgrades suggest analysts smell opportunity. Other semiconductor earnings guidance will prove if this AI optimism is real.
   

5. Banking regulatory pressure builds: Reports suggest major banks meeting with Republican state officials over ESG lending policies. Potential state-level restrictions could impact business operations and compliance costs.l.
   
   
   Thanks for reading 🙂
   
   - John
   

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