BETWEEN THE HEDGES

Thursday Watch

2026-07-01T21:50:32.601-04:00

Night Trading

Asian equity indices are -1.75% to -.5% on average.
Asia Ex-Japan Investment Grade CDS Index 68.0 +.25 basis point.
China Sovereign CDS 37.25 unch.
China Iron Ore Spot 98.80 USD/Metric Tonne +1.2%.
Crude Oil 67.61/bbl. -1.4%
Gold 4,065.20 USD/t oz. -.43%.
Swiss Franc/Offshore Chinese Renminbi Cross 8.40 +.04%.
Bloomberg Emerging Markets Currency Index 34.69 -.01%.
Bloomberg Global Risk-On/Risk Off Index 122.5 -.8%.
US 10-Year Yield 4.48% unch.
Japan 30-Year Yield 4.0% +2.0 basis points.
Volatility Index(VIX) futures 19.1 -.25%.
Euro Stoxx 50 futures -.03%.
S&P 500 futures +.08%.
NASDAQ 100 futures +.34%.

Morning Preview Links

BOTTOM LINE: Asian indices are lower, weighed down by technology and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.u

Stocks Reversing Slightly Higher into Afternoon on Positive Earnings Outlook Revisions, Sector Rotation, Crypto Bounce, Healthcare/Financial Sector Strength

2026-07-01T14:47:12.752-04:00

Economic/Market Gauges:

North American Investment Grade CDS Index 50.6 -.7%
BofA Private Credit Proxy Index 70.6 +1.1%
Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .27 +2.0 basis points
BofA Global Financial Stress Indicator -.24 -5.0 basis points
European Financial Sector CDS Index 54.3 -.2%
Emerging Market CDS Index 141.3 +.6%
Israel Sovereign CDS 56.6 +4.3%
Bloomberg Global Trade Policy Uncertainty Index .5 unch.
US Morning Consult Daily Consume Sentiment Index 92.4 +2.1

Citi US Economic Surprise Index 51.5 -8.0

Citi Eurozone Economic Surprise Index -20.4 -2.5

Citi Emerging Markets Economic Surprise Index 36.0 +3.6
S&P 500 Current Quarter EPS Growth Rate YoY(15 of 500 reporting) +174.4% -14.4 percentage points
S&P 500 Blended Forward 12 Months Mean EPS Estimate 371.58 +.07: Growth Rate +26.3% unch., P/E 20.2 unch.
S&P 500 Current Year Estimated Profit Margin 15.62% +2.0 basis points
NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +1,226.6% unch.
NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 894.93 +.62: Growth Rate +72.6% +.1 percentage point, P/E 19.2 +.3
Bloomberg US Financial Conditions Index 1.24 +15.0 basis points
US Yield Curve 31.0 basis points (2s/10s) +3.0 basis points
Bloomberg Industrial Metal Index 169.67 -.8%
Dutch TTF Nat Gas(European benchmark) 43.1 euros/megawatt-hour -.9%
US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 15.0% -1.4 percentage points
US Atlanta Fed GDPNow Q2 Forecast +1.2% -1.3 percentage points
US 10-Year T-Note Yield 4.47% +1.0 basis point
1-Year TIPS Spread 1.43 +1.0 basis point

Highest target rate probability for September 29th FOMC meeting: 50.7% (+.1 percentage point) chance of 3.75%-4.0%. Highest target rate probability for Oct. 28th meeting: 47.0%(+.5 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)

Overseas Futures:

Nikkei 225 Futures: Indicating -570 open in Japan
China A50 Futures: Indicating -207 open in China
KOSPI 200 Futures: Indicating -36 open in South Korea

DAX Futures: Indicating +160 open in Germany

Portfolio:

Slightly Higher: On gains in my financial/consumer discretionary sector longs, index hedges and emerging market shorts
Disclosed Trades: None
Market Exposure: 100% Net Long

Bear Radar

2026-07-01T14:19:09.092-04:00

Style Underperformer:

Large-Cap Growth -.8%

Sector Underperformers:

1) Semis -5.9% 2) AI Innovation -5.7% 3) Construction -2.1%

Stocks Falling on Unusual Volume:

GPCR, RRX, VSAT, PATK, WMT, CRESY, WTTR, FMC, CEG, FRPT, WYFI, CDNL, TARS, SHAZ, FCEL, ROAD, AA, AMAT, CRWV, GLW, NBIS and CHRN

Stocks With Unusual Put Option Activity:

1) HTZ 2) GGAL 3) ZIM 4) CIA 5) U

Stocks With Most Negative News Mentions:

1) NBIS 2) CAT 3) TARS 4) SSTK 5) AMAT

Sector ETFs With Most Negative Money Flow:

1) PTF 2) XLK 3) PRN 4) XLI 5) IGV

Charts:

Bull Radar

2026-07-01T14:09:07.989-04:00

Style Outperformer:

Large-Cap Value +.9%

Sector Outperformers:

1) I-Banking +4.5% 2) Software +4.1% 3) Social Media +3.7%

Stocks Rising on Unusual Volume:

ALIT, RAAQ, PRGS, RDDT, GH, MSTR, ZBIO, MNTN, COIN, DLO, RGNX, MH, APP, ASST, META, CELH, GLOB, GRND, BILL, HIMS, ALOY, TEM, SPGI, PLTR, ABX, PESI, KRMN, VERX, ASTH, PATH, UMAC, KD, GIS, DAVE, AXON, LMND, NVCT, CAI, ROOT, ACN, MGNI, ELF, SE, ZSQR, NVCT, DNA, CLBT, JACK, CCEP, KTOS, MATX, ALSN, PACS, KMTS, QTWO, MSM, PUBM, TBBK, AVAV, Z, FLYW, PRCH, PGY, URGN, KMTS, IIIV, PTRN, LI, GPN, APD, ZG, TALO, BIDU, GRRR, ICE, PSNL, ALKT, HLI, EZPW, CYRX, VRSK, CBL, ADPT, MAMA, PSO, RBRK, CWK, FOX, ZPEV, AVPT, FSUN, OMDA, TFPM, BB, ESTA, TRMB, FOXA, FHB, CON, SDRL, WSE and RCAT

Stocks With Unusual Call Option Activity:

1) DLO 2) ICLN 3) CGNX 4) ODD 5) HTZ

Stocks With Most Positive News Mentions:

1) EHGO 2) GNS 3) GH 4) AMPL 5) TOX

Sector ETFs With Most Positive Money Flow:

1) XLC 2) SMH 3) XLF 4) KRE 5) XHB

Charts:

Tomorrow's Earnings/Economic Releases of Note; Market Movers

2026-07-01T13:37:34.058-04:00

Earnings of Note
Company/Estimate

Before the Open:

(LNN)/1.14

After the Close:

None of note

Economic Releases

8:30 am EST

The Change in Non-Farm Payrolls for June is estimated at 115K versus 172K in May.
Average Hourly Earnings MoM for June is estimated to rise +.3% versus a +.3% gain in May.
The Unemployment Rate for June is estimated at 4.3% versus 4.3% in May.
Initial Jobless Claims for last week is estimated to rise to 218K versus 215K the prior week.
Continuing Claims are estimated to fall to 1820K versus 1821K prior.

10:00 am EST

Factory Orders for May is estimated to fall -2.0% versus a +4.8% gain in April.
Factory Orders Ex Transports for May is estimated to rise +1.0% versus a +1.3% gain in April.
Final Durable Goods Orders readings for May.

Upcoming Splits

None of note

Other Potential Market Movers

The weekly Fed's weekly balance sheet report, US Baker Hughes rig count, weekly EIA natural gas inventory report could also impact global trading tomorrow.

US Equity Market Hours

9:30 am - 4:00 pm EST