Good morning,
 
We’ve officially got a summer Monday. US markets rallied last week with most major US indices hitting new all-time highs. Equity markets were propelled higher by mis-positioning, particularly in tech, some maybe mis-guided hope around a diplomatic resolution in Iran, and mis-priced earnings (really they were just very strong). The S&P 500 ended the week up 3.6% with broad based strength though tech did much of the heavy lifting (NYSE 100 +5.6%). Energy, staples and other yield-oriented sectors underperformed. Oil prices fell >5% amidst the Iran deal hopes which along with a weak jobs report on Friday helped Treasury yields end the week down ~10bps. The USD weakness and easing rate hike expectations helped the metals complex move sharply higher. Crypto also ended the week with gains despite the Clarity Act getting pushed out to the fall.
 
US futures were slightly higher overnight but have been drifting lower over the last couple of hours. Last week’s deal hopes are fading a bit with a new round of demands from Iran and President Trump saying that the US is only “semi-negotiating”. However, he did suggest that he would let economic pressure bring them back to the table as opposed to reiterating that he would “hit ‘em hard”. Oil prices and Treasury yields are both moving modestly higher. CPI on Wednesday, is the week’s major catalyst. Earnings quiet down this week. Berkshire is trading a touch higher this morning after EPS came in well ahead of estimates though there is some focus on weaker GEICO results. Futures are slightly lower across the board.
 

 

• US 2yr +3bps to 4.23%, 5yr +3bps to 4.39%, 10yr +3bps to 4.68%, 30yr +2bps to 5.22%
• USD index: +$0.08 to $99.50

 
Below are some of the headlines getting attention this morning.

• Taiwan Semi (around unch) - reported July revenues +45%
• Intel (-5%) announced $15B equity offering
• Meta (+2%) released its new Muse Glimmer AI model. CEO Zuckerberg released a letter “The Path to a Positive AI Future”
• SpaceX/Nvidia/Microsoft - SemiAnalysis says SPCX can hit the 10GW+ of compute capacity which could require $300 - $500B of Capex with Nvidia potentially backstopping some of this. Microsoft could offtake some of that capacity.
• HZO being bought for $1.5B by Blackstone portfolio company

 
Global markets were mostly higher overnight extending last week’s gains. The Nikkei was up ~2% helped by strength in tech stocks though financials were under pressure. The Yen has been weakening despite BOJ Summary of Opinions having a hawkish tilt. This morning Kyodo is reporting that a signal that the BOJ could hike in September led the US join currency operations. South Korea ended slightly higher despite the memory stocks closing lower. Apple has reportedly been testing CXMT chips. Inflation data in China came in below expectations.  The Hang Seng ended up just over 1% with broad based strength while mainland indices also ended higher. European indices are modestly higher. The FTSE 100 is slightly lower with staples, communication and healthcare moving lower.
 

 
Oil prices have are up ~2% as deal hopes fade. US natural gas prices are bouncing nearly 5% after hitting new lows last week. Prices in Europe are also >5%. After last week’s gains metals are mixed on either side of unchanged. Ag is moving higher ahead of the WASDE report later this week. Crypto is hovering around unchanged.


 
Earnings:
Pre-Market: BRK.B, CRC, DOLE, FERG, MNDY, SDRL, SBET, SOHU
After-Market: AAON, ACHR, ACM, ALC, AMTM, ASTS, BW, BZH, BBIO, GETY, HIMS, PLUG, QUBT, RKLB, SPG, UPWK
Pre-Market: ARMK, CAH, MIDD, ONON, RXT, SFD, TME. VG, VSTS
 
Economic Data:
US:

• 11:30 3/6mo T-Bill

Global:

• China CPI: -0.1%/0.5% m.m/y.y vs. 0.2%/0.8% cons., prior -0.3%/1%
• China PPI: 3.5% vs. 3.8% cons., prior 4.1%