Fear Sells,
the Tape Tells

U.S. Futures & World Markets

US equity futures are slightly higher premarket as we head into the holiday weekend. Semiconductor stocks are under some pressure after South Korean semi stocks got hit overnight. With lighter trading volume today ahead of the 4th of July, it's not a surprise to see stocks get pushed around with less capital in play.

The first headline below shows oil is set for its fourth consecutive weekly decline. It's been pretty amazing to see the market sniff out lower oil well before the fear-mongering pundits. As always, fear grabs the headlines and sells better — but it's more important to pay attention to what the tape is telling you.

We'll get plenty of employment data this morning. The June Employment Situation Report and weekly jobless claims are both out at 8:30 am ET. The data should provide some clues on how the Fed may look at the future path of interest rate policy, although one report rarely changes the big picture.

Happy Fourth of July, and enjoy the weekend!

CORE Headlines

• Oil continues to flow through the Strait of Hormuz, underscoring Iran's limited ability to halt shipping. — Bloomberg
• OpenAI discussed giving the U.S. government a 5% stake. — FT
• A new Chinese artificial intelligence model is catching up with Anthropic. — Reuters
• SoftBank renewed discussions regarding a $10 billion loan backed by a stake in OpenAI. — Reuters
• Elon Musk's SpaceX developed a prototype handset-like device designed to reshape how humans interact with AI, which it has shown to investors recently. — WSJ
• Bending Spoons, an Italian tech company that bought brands including AOL, made its market debut at a valuation of more than $18 billion. Shares gained 40% from its IPO price. — WSJ
• Crypto exchange Binance failed to obtain an EU license after a regulator expressed concerns about its history of financial-crime violations. — WSJ
• EU's top court upheld the record antitrust fine of $4.67 billion levied on Alphabet's Google over alleged anti-competitive practices. GOOGL lower premarket.
• AVAV shares moved higher after winning a $500M contract for counter-unmanned aerial systems capabilities.
• Apple is said to be preparing a new iPad Pro and redesigned entry-level MacBook Pro. — Bloomberg

Charts & Data

Q2 GDPNow plunged to 1.2% from 2.5% — driven mostly by net exports. Augur Infinity via Daily Chartbook: the Atlanta Fed's model took a sharp leg down. A significant downward revision that the market hasn't fully priced. Worth watching as Q2 earnings season begins.

Hormuz commercial crossings slip to 19 in latest 24-hour window — down 67% from the June 24 recovery peak of 57. @m_mcdonough via Daily Chartbook: the partial recovery in Hormuz traffic has stalled and reversed. The peace deal's real-world impact on shipping remains uneven.

Bitcoin long-term holders rebuilding positions after extended distribution — a notable shift in behavior. Glassnode via Daily Chartbook: "While the pace of accumulation remains modest relative to large buying waves seen during prior bull market expansions, it marks a notable shift as some of Bitcoin's most conviction-driven investors once again absorb supply." A quiet bottom-formation signal.

Corporate pensions fully funded for the first time in almost two decades. Torsten Slok, Apollo: a remarkable milestone that reduces pension funds' pressure to sell equities to de-risk. Fully funded pensions can maintain higher equity allocations.

BofA clients were net sellers of US equities for a 4th straight week (-$5.8B) — rolling 4-week average at an all-time low. BofA via Daily Chartbook: institutional clients are reducing equity exposure at a historically extreme rate. Contra-indicator or genuine caution signal? Hard to tell, but worth monitoring.

Long-only fund equity inflows hit an all-time high of ~$180B in June. Emmanuel Cau, Barclays via Daily Chartbook: a massive contradiction to the BofA client outflows — long-only managers were buying aggressively even as other investors sold. This two-sided flow dynamic explains the tape's resilience.

Retail correlation with S&P is -0.54 on Robinhood this year — buy-the-dip discipline is strong. Luke Kawa, Sherwood via Daily Chartbook: "A testament to the eagerness to buy dips and dial down purchases during big up days." Retail's systematic dip-buying has been the most reliable bull market signal of 2026.

When Nasdaq is up 10%+ through June (but not 20%+), 3-month forward returns average +8.13% with a 10-0 win rate. @nautiluscap via Daily Chartbook: a clean historical precedent for Q3 outperformance from the current Nasdaq setup.

Mag 7 had their best day relative to Semis on record — ratio remains near 7-year lows. Jonathan Krinsky, BTIG via Daily Chartbook: one good day doesn't reverse the multi-week trend, but Tuesday's Lag7 reversal was historically notable in its magnitude.

US 2027 AI capex projected at ~3.0% of GDP vs. China at ~0.6%. Leverage Shares via Daily Chartbook: a 5-to-1 spending advantage for the US in the AI infrastructure race. The capex cycle advantage is enormous and growing.

The stock market performs best in a low-expectations, mid-to-high results environment — and we may be past that setup. Callie Cox via Daily Chartbook: "This earnings outlook is obviously a good proof point for stocks near record highs. It may not be the right recipe for a gangbusters rally, though." A nuanced but important point as Q2 earnings season begins with the bar high.

Interesting Reads

• The wine made by British monks that's making bank — The Hustle
• Alex Stamos on Anthropic — X. If you haven't seen Alex Karp's diatribe from CNBC yesterday, it's worth the listen.

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