Happy Friday,
 
Yesterday US markets reversed early losses as the eternal hope for a Middle East resolution resurfaced. Equities ended modestly higher as oil prices and yields pulled back. The S&P 500 was up ~0.2%, closing just under 7,450, and is holding on to gains for the week as it attempts to extend its weekly winning streak to 8 weeks for the first time since 2023. Speaking of winning streaks, the Knicks extended theirs last night to nine straight, the longest post season winning streak in franchise history. There have been 13 teams in NBA history to achieve this mark in the playoffs, 7 of those teams went on to bring home the Trophy. The equal weight S&P 500 (+1.5% WTD) and small/midcaps have outperformed this week up between 1% - 2%, recouping a good portion of last week’s rate induced losses. Yesterday the Russell 2k was helped by the administration announcement that it would invest $2B in quantum computing companies, reigniting one of the popular retail thematic trades which had knock on effects.
 
Global markets played some catchup with the US overnight. S&P futures have been trading modestly higher overnight, started to pullback as oil prices were bouncing, but have pushed back to overnight highs after reports that the Pakistani army chief is headed to Tehran. This was reportedly happening yesterday as well, and when it was refuted markets pulled back from the highs. Oil prices have pulled back from overnight highs while yields are a touch lower. US futures are up ~0.5%.
 
 

 
After the close there was another solid round of tech/retail earnings as well. Software companies are seeing solid gains in the pre-market following earnings with TTWO, WDAY, ZM up 3-8% after beating estimates. WDAY CEO commented, “Workday is ready for this AI moment. Our core business is strong, our AI strategy is working, and we're moving with the speed and focus required to lead”. ZM said, “Customers are increasingly adopting Zoom as an AI-first system of action for modern work, with AI Companion paid users growing 184% year over year.” Semis also have a bid with AMD (+3%) after Reuters reported that the company was working with partners in Taiwan to ramp CPU production.
 
Retailers are mixed despite beating estimates. ROST is trading up ~5%. The company noted customer traffic was the primary driver of strong sales, and tax refunding spending also likely helped. DECK beat as well but is trading modestly lower. BJ is around unchanged after reiterating guidance.
 
Treasury yields are extending yesterday’s pullback down 1-3bps. After the open final U of Mich Sentiment and the CB Leading Indicators will be released. Kevin Warsh is also set to be sworn in at 11:00.
 
Government Yields

• US 2yr -1bps to 4.07%, 5yr -3bps to 4.22%, 10yr -3bps to 4.54%, 30yr -2bps to 5.07%
• USD index: +$0.02 to $99.24

 
European indexes are trading higher. Germany’s DAX is a leader, up 1%. Both GfK Consumer Confidence and Ifo Business Climate surveys improved and were better than expected while . UK retail sales missed expectations. Tech names are trading higher across the region (ASML +3%, Infineon +5%) while Energy is lagging. Asia saw strong gains led by the Nikkei’s ~3% pop. Softbank added another 12% to yesterday’s 20% gain on OpenAI IPO expectations. China’s markets were also higher with Shanghai and Hong Kong both up ~1%. Regulators are reported to be scrutinizing AI/Tech fueled rallies with Bloomberg saying exchange operations have “sked several listed companies to clarify whether their core businesses have any meaningful link with AI, and whether their disclosures to investors have been clear enough”. Chinese regulators were also cracking down on offshore trading of US-listed Chinese stocks which is weighing Chinese ADR’s in the pre-market.
 
 
 
Crude is up modestly this morning though off its highest levels after the UAE reportedly joining Saudia Arabia and Qatar in urging Trump to not restart the Iran war, as well as reports that the Pakistani army chief was heading to Tehran. Natural gas is lower, as are precious metals with gold and silver down 1%. Copper is modestly higher though.  Ag is flat to slightly higher. Bitcoin and Ether are slightly lower with Bitcoin having traded in a tight range the past three days, just above its 100d am. A WSJ journal report that Binance was used to move billions of dollars into Iran is attracting attention across the space.  
 

 
If you’re cutting out earlier enjoy the holiday weekend!
 
Earnings:
 After-Market:  BULL, CAE, CPTR, DECK, FLO, HUBG, RAMP, ROST, TTWO, WDAY, ZM
Pre-Market: BAH, BJ, Richemont
 
Economic Data:
US:

• 10:00 U of Mich. Sentiment (final)
• 10:00 CB Leading Indicators

Global:

• Japan Inflation: 1.4% vs. 1.7% cons., prior 1.8%
• UK Retail Sales: -1.3% vs. -0.6% cons., prior 0.6%
• Germany Ifo Business Climate/Expectations: 84.9/83.8 vs. 84.2/83.5
• Canada Retail Sales; 0.9% vs. 0.6% cons., prior 0.7%
• Canada PPI: 2% vs. 1.3% cons., prior 2.8%