Good morning and Happy Knicks Championship Banner Raising Day,
 
While we wait for the NBA champions to begin their title defense and raise their banner to the MSG rafters tonight, S&P futures are down 0.2% but moving off the overnight lows. The pressure on tech continues- a poor Korean IPO the latest example- as does the flood of earnings results. CoreWeave is down another 3% in the pre-market, after an early session bounce yesterday disappeared by day’s end. Most of the AI ecosystem is also lower this morning, but trying to move higher approaching the open. Among earnings reporters, GM, GPC, CCK, STLD and GE are down 4-7% in the pre-market. EFX, MSCI (AI-disruption plays) are up ~5%. Defense contractors RTX and NOC are slightly higher.  SpaceX reports tonight after providing the Street with only a few days notice, versus the standard ~2 weeks.
 

 
The S&P 500 rose 0.4% yesterday as tech rebounded from Friday’s weakness, but the rest of the market didn’t fare as well. The equal-weight S&P declined, 7/11 sectors ended in the red and the Russell 2000 was higher but lagged. Consumer Discretionary (AMZN, TSLA +4-5%) and Tech led while Utilities and Real Estate were the weakest as Treasury yields rose ~5bp across the curve. 
 
The treasury curve is flatter today with 2y yields around unchanged while 10/30y falls ~3bp. The US Dollar Index is moving lower, continuing to pull back from its highs over 102.50 last week. Housing starts fell from last month and missed expectations, but permits were slightly higher and about inline. ADP weekly employment growth slowed from last week. After
 

• US 2yr -0bps to 4.77%, 5yr -2bps to 4.93%, 10yr -3bps to 5.11%, 30yr -4bps to 5.43%
• USD index: -$0.22 to $101.57

South Korea dropped almost 4% with the memory names under pressure. AI cloud provider Elice fell more than 30% in its South Korean debut- another in a string of negative capital market developments for AI / data centers globally. Most of Asia traded down along with the KOSPI. The Nikkei fell over 1% overnight with miners and financials lagging and Softbank getting hit for 6%. Credit pressures remain front-and-center as the company’s CDSs spread hit its highest in ~4 years. It’s also reportedly in discussions with OpenAI on a $30B fundraising round.  A 20y JGB auction was strong with a record bid:cover and Bloomberg domestic purchases of JGBs in Japan’s fiscal 1H reached their highest total in 17 years. China was mixed with Hang Seng lower, Shanghai higher. LPRs were left unchanged as expected. European indices are mostly lower. Industrials (ABB -6%), miners, tech and financials are lagging while Healthcare, Food/Beverage and Utilities lead. European officials are looking into potential government interventions to address soaring energy prices. German PPI was hotter than expected and rose from last month but the ZEW reading for the Current Situation was better than expected and improved from the last survey. UK unemployment unexpectedly fell with hiring better than expected.
 

 
Crude is up modestly but off its highs with Houthi strikes in Saudi Arabia continuing, while various talks between numerous groups to reach an agreement between the US and Iran are taking place. US natural gas is lower on mild weather forecasts while European gas is higher as storage remains below the 5-year average and Russia struck Ukraine facilities. Precious metals are modestly lower despite the Dollar weakening. A story in the FT said Japan has reached critical levels of rare earths supply as China maintains strict export controls. Bitcoin and Ether are lower. BMNR announced its ETH holdings reached 6.04M tokens, or 4.9% of total supply, right below the goal of 5%, when the company plans to stop accumulating the asset.   
 

 
 
Earnings:

• After-Market (Mon): CCK, FNB, RLI, STLD, WAL, WRB, ZION
• Pre-Market: ABB, ALLY, CBSH, EFX, GE, GM, GPC, HAL, HAS, KEY, MMM, MSCI, NOC, RTX, SYF, VICR, VMI
• After-Market: ADC, ALK, CB, COF, EWBC, HWC, ISRG, LRN, NFLX, NLY, OZK, PEGA, SPCX, UAL, WFRD

Economic Data:
 
US:

• ADP weekly Employment: 18.5K vs prior 24.75K
• Housing Starts: 1.221M vs 1.30M cons, prior 1.288M
• Building permits: 1.4M vs 1.39M cons, prior 1.403M
• 10:00am Pending Home Sales m.m: -0.5% cons, prior 0.3%
• 4:30pm API crude inventories

Global:

• Taiwan Export orders y.y: 62.4% vs 58.7% cons, prior 71.4%
• China: 1/5y LPR: unchanged as expected
• Germany PPI m.m: 1.9% vs 0.8% cons, prior 1.1%
• Germany ZEW sentiment: 28.1 vs 30.0 cons, prior 34.7
  • Current situation: -35.9 vs -45.0 cons, prior -47.1
• EU ZEW sentiment: 18.5 vs 23.6 cons, prior 25.8
• Current situation: -14.8 vs prior -13.9
• UK unemployment: 4.7% vs 4.9% cons, prior 4.9%