At 4:23 p.m.:

Advance-Decline intraday (blue) vs SPY (green)

Closing Volume

- NYSE volume 2% below its one-month average;

- NASDAQ volume 8% above its one-month average;

- VIX index: down 1% to 15.78

Breadth

Sectors

% Movers

Nasdaq 100 Heat Map

Here are today's things:

* Added to index shorts: SPY at $625.31, QQQ at $556.19

* Shorted NVDA at $164.01, covered NVDA at $162.87

* Shorted PLTR at $144.57, covered PLTR at $142.34

* Covered HOOD at $94.01

* Shorted more RSP at $185.77

* Sold out of VVV long at $39.35

* Sold out of FGEN long at $6.70

I added to index shorts:

* SPY $626.02

* QQQ $555.17

From Peter Boockvar:

With many eyes on it, uneventful 30 yr auction

With the global uplift in 30 yr maturity yields, the US 30 yr bond auction was uneventful. The yield of 4.889% was spot on with the when issued pricing. The bid to cover of 2.38 was a touch below the 12 month average of 2.41. Direct and indirect bidders (I combine them because a foreign buyer can use a US bank to bid and that would show up as a direct bid even though it’s coming from overseas) made up about 87% of the auction vs the previous 12 month average of 86%.

Bottom line, no change in the 30 yr bond price/yield in response with this blah auction and the yield currently stands at 4.88%.

US 30 yr Bond Yield

I have just closed out a long-standing investment long, Valvoline VVV, based on my analysis of a likely weaker-than-expected 2025-26 earnings picture.

The shares have risen from the ashes ($31 ish) to $39.35.

Break even.

Consumer equities continue to be underperformers, with recent shorts Costco COST and Walmart WMT kicking up the rear.

I have two research calls between 11:30 AM and 1 PM.

Radio silence.

- NYSE volume 2% below its one-month average;

- Nasdaq volume 23% above its one-month average;

- VIX index: down 0.19% to 15.91

I am out of a very small long position in speculative FGEN.

Out of trading short rental in NVDA for a small loss.

I have covered my trading short rentals on PLTR and HOOD - for a small profit.

I strongly recommend yesterday's The Dales Report podcast (Shadd and Anthony) with my old pal Marc Cohodes.

Let's go to the tape: Mitch McConnell’s Hemp Reversal & What It Means for Cannabis Reform | TTB Powered By Dutchie

US utilities plot big rise in electricity rates as data centre demand booms

From Peter Boockvar:

Initial claims around the holiday, continuing claims at new cycle high

Distorted by the timing of the July 4th holiday, initial jobless claims for the week ended 7/5 fell to 227k from 232k and that was 8k less than expected. Not influenced by the holiday were continuing claims for the week ended 6/28 and they rose 10k w/o/w to 1.965k as expected but at a new cycle high going back to November 2021.

Bottom line, as stated, let’s wait until next week’s initial claims data to smooth out July 4th’s influence. That said, the elevated level of continuing claims points to the moderation we’ve seen in hiring.

Continuing Claims

Upside:

-DALN +217% (to be acquired by Hearst for $14.00/shr in cash)

-KLG +53% (reportedly near deal to be acquired for around $3B by Italy's Ferrero)

-MP +43% (signs public-private partnership and multibillion-dollar package of investments with the US Dept of Defense to accelerate the build-out end-to-end U.S. rare earth magnet supply chain)

-AIRI +37% (secures $5.4M contract for landing gear steering collar components for USAF B-52 Bomber)

-USAR +16% (higher in sympathy with MP)

-DAL +13% (earnings, guidance)

-BSET +11% (earnings)

-PTHS +9.1% (launches ZELSUVMI)

-ROKU +2.9% (Keybanc/Pacific Crest Raised ROKU to Overweight from Sector Weight, price target: $115)

-AMD +2.7% (hearing HSBC Raised AMD to Buy from Hold, price target: $200)

Downside:

-MREO -32% (Ultragenyx and Mereo BioPharma announce UX143 Phase 3 Orbit study for Osteogenesis Imperfecta Progressing to Final Analysis)

-HELE -27% (earnings, guidance)

-RARE -20% (Ultragenyx and Mereo BioPharma announce UX143 Phase 3 Orbit study for Osteogenesis Imperfecta Progressing to Final Analysis)

-MEI -19% (earnings, guidance; cuts dividend)

-ALT -13% (Goldman Sachs Resumed ALT with Sell, price target: $1)

-GRRR -7.2% (profit taking)

-SMPL -7.2% (earnings, guidance)

-PCYO -6.0% (earnings)

-INMD -5.8% (cuts revenue guidance)

-CAG -5.5% (earnings, guidance)

-PTC -4.3% (reportedly Autodesk considers acquiring PTC)

-BYRN -4.0% (earnings, guidance)

-ADSK -3.2% (reportedly Autodesk considers acquiring PTC)

From Peter Boockvar:

A few things of note

Just to put some perspective of what a $4 Trillion market cap looks like when compared to the world economy. It is 3.6% of global GDP and for perspective, at its March 2000 market cap peak of about $550, Cisco was 1.6% of global GDP at the time. This is in no way an opinion on Nvidia stock, just a comparison after the incredible run it has had.

The Bull/Bear spread in the weekly Investors Intelligence survey widened to 32.6 with Bulls at 53.8 vs 51 last week and Bears slipping a touch to 21.2 from 21.6. I consider a spread above 30 stretched and one above 40 as extreme. The more volatile and fickle AAII saw a dip in Bulls of 3.6 pts to 41.4 after a 10 pt rise last week. Bears were up by 2.5 pts to 35.6 after dropping by 7.2 pts in the week before. The CNN Fear/Greed index closed yesterday at 75, around the highs in this rally and remaining in the 'Extreme Greed' area. The NAAIM Exposure Index will get updated later today.

Bottom line, again nothing extreme in terms of bullishness but the skepticism with the rally up until last week is over and the bull mood is back.

Ahead of the jobless claims data today, the Atlanta Fed's Wage Tracker came out yesterday and it showed 4.2% y/o/y growth in June vs 4.3% in May. Part of this is just an easy comp as it was up by 5.3% in June 2024 and still remains above the 3-4% range seen pre Covid. For a 'job stayer', the stat was similar, up 4.2% vs 4.3% in May. For a 'job switcher', wages grew by 4% from 4.1% and that actually is back in line with the pre Covid trend.

Bottom line, wage growth is slowing for sure but still remains pretty good.

Atlanta Wage Growth Tracker

Delta said this in their just released earnings report:

"Through the quarter, demand trends stabilized at levels that are flat to last year and we continued to see resilience in our diverse, high margin revenue streams...For the September quarter, we expect total revenue to be flat to up 4% compared to the prior year, with unit revenue trends expected to improve through the 2nd half of the year as we continue to adjust capacity and the industry further rationalizes supply."

They saw 1% revenue growth in the June quarter "on 4% capacity growth" with adjusted total unit revenue down 3%.

"Premium revenue continued to outpace main cabin, growing 5% on a y/o/y basis...International revenue grew 2% during the quarter...Corporate demand environment remains steady." Corporate sales grew by "low single digits over the prior year, "led by domestic."

After the Reserve Bank of New Zealand left rates unchanged yesterday, the Bank of Korea did so today at 2.5%. They said "significant uncertainties concerning developments in trade negotiations with the US and concerning the pace of recovery in domestic demand." As to when they might cut again, "At this point, it is really difficult to say when to lower interest rates and where the terminal policy rate will stand," said Governor Rhee. The Won is higher after the rate hold though the 2 yr yield fell 1 bp.

Japan's June PPI rose 2.9% y/o/y as expected with not much of a market response. The 10 yr inflation breakeven was unchanged at 1.57%, though holding around a one month high. JGB yields were little changed but something we certainly watch every day.

Japan PPI y/o/y

As S&P futures rally back to the green (from -22 at its nadir last night) I am further expanding my index shorts:

* SPY $624.34

* QQQ $556.79

* Subscriber comment of the day...

douglas cassel

This article is behind a paywall, which I can't bypass. This summary does speak to the issue I posted about yesterday.

AI is going to dramatically impact our economy is ways not yet even considered.

The flattening of the Phillips curve, accelerated by the integration of AI and robotics into the workforce, represents a fundamental disruption of economic orthodoxy. As machines replace human workers across industries, the traditional relationship between unemployment and inflation is eroding, rendering conventional monetary policy tools ineffective.

The implications extend beyond dry economic theory. As automation reshapes the labor market, our very conceptions of work, productivity, and social value are called into question. For example, large swaths of the education system, still largely geared towards preparing workers for a human-dominated job market, faces obsolescence.

These changes are not merely challenging—they are potentially destabilizing. The flattening Phillips curve is a harbinger of profound economic and social upheaval. Our economic frameworks, developed in and for a world where human labor was paramount, are increasingly misaligned with the realities of an automated economy. (Source: paulkedrosky.com)

A possible divergence that The Divine Ms M mentions in her commentary this morning:

Bonus — Here are some great links:

The Next Target for Bitcoin

Fishing Amid Bullish Sentiment

Don't Think There Is Too Much Complacency

The Beta Trade in Banks

Cattle to Corn Sets New Highs

The S&P Short Range Oscillator stands at 5.87% vs. 6.57% — still strongly overbought.