STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
Published on 7/16/26 (a/o 9:00 am)
Good morning,
It’s been an interesting few days atmospherically in NYC as Canadian wildfires once again send smoke and the smell of a fireplace descending on the city. Market moves have been interesting as well. The S&P ended Wednesday up 0.4% with the Russell 2000 inline and equal-weight falling 0.2%. Yields fell 2-6bp on a cool PPI print and dovish comments from NY Fed President Williams. Megacap tech and the hyperscalers posted solid gains, pushing Comm Services and Consumer Discretionary to the top of the leaderboard. There was a divergence in tech overall however as semis and memory names were under pressure (ICE Semis -2%, DRAM -6%). ASML posted a big quarter and will increase capacity 30% in 2027, and is looking into another 30% increase for 2028. That may have ignited concerns about capacity overbuild and caused the above chip weakness. Financials continued to post solid earnings as well and were among the best sectors. Utilities led the decliners despite yields falling, Energy also lagged as crude oscillated between gains and losses as it tested support at its 50/100d ma. Military strikes continued in the Middle East and President Trump vowed more would come until Iran stops attacking vessels in the Strait. Late in the trading day the WSJ said Trump was briefed on escalation options and CBS reported options for Cuba have also been discussed.
Equity futures are under a bit of pressure this morning, centered around tech and in particular semis. TSMC posted a strong quarter and robust AI demand commentary, but the stock is trading lower in the pre-market- a familiar action we’ve seen from other tech companies that report blowout, sometimes historical. The super-charged memory names continue to pull back (MU, SNDK, WDC down 5-7%). S&P futures are at their lows down about 0.3%. However the Dow is higher with component UNH up on earnings. In Iran news, President Trump is leaning toward expanding military operations in Iran, according to the WSJ. On the other hand, Iran released an American citizen held for over a year, a an action that Trump called a gesture of goodwill.
TSMC reported overnight (-4% in US pre-market), after initial revenue numbers earlier this week. Operating margins were strong and Q3 revenue guidance is above the Street, but the margin outlook is less robust versus consensus, impacting by the ramp up in the new 2mm process technology for chip manufacturing. Capex was also raised - recall ASML said it was increasing production capacity for its chipmaking machines to meet demand. The company announced an additional $100B investment in Arizona for manufacturing plants. The AI demand story remains robust, but capacity and cost increases are feeding the historical cyclicality concerns inherent in the chip industry.
A few more earnings bullets:
Treasury yields are up ~4bp across the curve. The move is reversing yesterday’s decline on the long-end. The US Dollar is up as well. Retail sales on both the headline and control group were inline with expectations but the growth slowed from last month. Jobless claims continued to stay low.
US 2yr +4bps to 4.17%, 5yr +4bps to 4.30%, 10yr +4bps to 4.59%, 30yr +4bps to 5.12%
USD index: +$0.19 to $100.47
Asia was under pressure overnight. The Nikkei fell nearly 3%, following the lead of US semi stocks yesterday. Kioxia fell 15%, Advantest and Softbank 6%. Nvidia is partnering with Kawasaki Heavy to develop and AI and robot powered shipyard, in part to address labor shortages in the industry. Notable that Hyundai auto workers in South Korea launched a partial strike in part to protect against job losses to robots and AI. China’s markets were sharply lower as well aside from Hong Kong. Chip-related weakness continued as CXMT prepares for an IPO. Beijing approved Apple’s AI service, Apple Intelligence, for iPhones sold in China, which will use AI models from Alibaba and Baidu. Another Trump-Xi meeting may happen in September, though its far from assured. Xi is expected to outline a strategy for Chinese AI on Friday. South Korea’s KOSPI fell 6% with SK Hynix . The central bank raised rates as expected. SK Hynix and Samsung fell about 10% each. Regulators are looking to curb single stock leveraged ETF activity. European markets are trading lower and around worst levels. Utilities, Natural Resources, Tech and Manufacturing/Industrials are among the weakest areas. The EUs trade deficit was bigger than expected. UK GDP rose 1.3% y.y in May, up from 1.2% last month and about inline with estimates.
Brent crude is up 1% this morning, breaching $85 and putting WTD gains at ~13% as it looks to break through the 50/100d ma. Gold and silver are lower. Gold has been trading between $4000-$4100 for most of the past 3 weeks. Ag is slightly lower, as is Bitcoin and Ether.
President Trump is expected to meet with Senators today to discuss the CLARITY Act’s standing.
Earnings:
After-Market (Wed): HOMB, JBHT, UAL
Pre-Market: ABT, CFG, GE, IIN, MAN, PLD, STT, UNH, USB
After-Market: AA, CNS, FNB, ISRG, NFLX
Economic Data:
US:
It’s been an interesting few days atmospherically in NYC as Canadian wildfires once again send smoke and the smell of a fireplace descending on the city. Market moves have been interesting as well. The S&P ended Wednesday up 0.4% with the Russell 2000 inline and equal-weight falling 0.2%. Yields fell 2-6bp on a cool PPI print and dovish comments from NY Fed President Williams. Megacap tech and the hyperscalers posted solid gains, pushing Comm Services and Consumer Discretionary to the top of the leaderboard. There was a divergence in tech overall however as semis and memory names were under pressure (ICE Semis -2%, DRAM -6%). ASML posted a big quarter and will increase capacity 30% in 2027, and is looking into another 30% increase for 2028. That may have ignited concerns about capacity overbuild and caused the above chip weakness. Financials continued to post solid earnings as well and were among the best sectors. Utilities led the decliners despite yields falling, Energy also lagged as crude oscillated between gains and losses as it tested support at its 50/100d ma. Military strikes continued in the Middle East and President Trump vowed more would come until Iran stops attacking vessels in the Strait. Late in the trading day the WSJ said Trump was briefed on escalation options and CBS reported options for Cuba have also been discussed.
Equity futures are under a bit of pressure this morning, centered around tech and in particular semis. TSMC posted a strong quarter and robust AI demand commentary, but the stock is trading lower in the pre-market- a familiar action we’ve seen from other tech companies that report blowout, sometimes historical. The super-charged memory names continue to pull back (MU, SNDK, WDC down 5-7%). S&P futures are at their lows down about 0.3%. However the Dow is higher with component UNH up on earnings. In Iran news, President Trump is leaning toward expanding military operations in Iran, according to the WSJ. On the other hand, Iran released an American citizen held for over a year, a an action that Trump called a gesture of goodwill.
TSMC reported overnight (-4% in US pre-market), after initial revenue numbers earlier this week. Operating margins were strong and Q3 revenue guidance is above the Street, but the margin outlook is less robust versus consensus, impacting by the ramp up in the new 2mm process technology for chip manufacturing. Capex was also raised - recall ASML said it was increasing production capacity for its chipmaking machines to meet demand. The company announced an additional $100B investment in Arizona for manufacturing plants. The AI demand story remains robust, but capacity and cost increases are feeding the historical cyclicality concerns inherent in the chip industry.
A few more earnings bullets:
- GE (-3%) despite a beat and raise.
- JB Hunt (+6%) posted a solid quarter with intermodal particularly strong.
- United Airlines (-3%) raised guidance but below the Street. Like Delta, the company saw fuel costs surge but countered with higher fares. Demand remains healthy despite the higher ticket prices.
- Abbott (+4%) beat and raised EPS- med tech has been a weak segment of the healthcare sector so sentiment was low coming into the print.
- UNH (+7%) beat and raised with MCR strong.
- Uber (+1%) is acquiring Delivery Hero for $15B
Treasury yields are up ~4bp across the curve. The move is reversing yesterday’s decline on the long-end. The US Dollar is up as well. Retail sales on both the headline and control group were inline with expectations but the growth slowed from last month. Jobless claims continued to stay low.
US 2yr +4bps to 4.17%, 5yr +4bps to 4.30%, 10yr +4bps to 4.59%, 30yr +4bps to 5.12%
USD index: +$0.19 to $100.47
Asia was under pressure overnight. The Nikkei fell nearly 3%, following the lead of US semi stocks yesterday. Kioxia fell 15%, Advantest and Softbank 6%. Nvidia is partnering with Kawasaki Heavy to develop and AI and robot powered shipyard, in part to address labor shortages in the industry. Notable that Hyundai auto workers in South Korea launched a partial strike in part to protect against job losses to robots and AI. China’s markets were sharply lower as well aside from Hong Kong. Chip-related weakness continued as CXMT prepares for an IPO. Beijing approved Apple’s AI service, Apple Intelligence, for iPhones sold in China, which will use AI models from Alibaba and Baidu. Another Trump-Xi meeting may happen in September, though its far from assured. Xi is expected to outline a strategy for Chinese AI on Friday. South Korea’s KOSPI fell 6% with SK Hynix . The central bank raised rates as expected. SK Hynix and Samsung fell about 10% each. Regulators are looking to curb single stock leveraged ETF activity. European markets are trading lower and around worst levels. Utilities, Natural Resources, Tech and Manufacturing/Industrials are among the weakest areas. The EUs trade deficit was bigger than expected. UK GDP rose 1.3% y.y in May, up from 1.2% last month and about inline with estimates.
Brent crude is up 1% this morning, breaching $85 and putting WTD gains at ~13% as it looks to break through the 50/100d ma. Gold and silver are lower. Gold has been trading between $4000-$4100 for most of the past 3 weeks. Ag is slightly lower, as is Bitcoin and Ether.
President Trump is expected to meet with Senators today to discuss the CLARITY Act’s standing.
Earnings:
After-Market (Wed): HOMB, JBHT, UAL
Pre-Market: ABT, CFG, GE, IIN, MAN, PLD, STT, UNH, USB
After-Market: AA, CNS, FNB, ISRG, NFLX
Economic Data:
US:
- Retail Sales m.m / y.y: 0.2% vs 0.2% cons, prior 1.0%
- Control Group: 0.5% vs 0.5% cons, prior 0.8%
- Weekly claims: 208K vs 217K cons, prior 216K
- Continuing Claims: 1805K vs 1820K cons, prior 1821K
- NY Fed Services: 8.7 vs prior -10.1
- Philly Fed survey: 34.4 vs prior 50.2
- 10:00am Business Inventories
- 10:00am NAHB Housing Index
- 10:00am Pending Home Sales
- 10:30am Gas inventories
- Fed speakers: Logan (12:30pm), Jefferson (7:00pm)
- 4:30pm Fed Balance Sheet
- South Korea rate decision: Raise 25bp to 2.75% as expected
- UK GDP y.y: 1.3% vs 1.4% cons, prior 1.2%
- UK Industrial Production y.y: 1.0% vs 1.2% cons, prior -0.2%
- EU Trade Balance (May): €-7.8B vs €-1.6B estimate, prior -€1.0B
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