U.S. Futures & World Markets
It's all about Nvidia this morning after NVDA posted strong earnings and guidance. Technology stocks are jumping, with semiconductor and AI-related names leading the way higher.
It's nice to see software stocks participating in this rally. Salesforce, Okta, and CrowdStrike are all up after reporting strong earnings/guidance. The bigger question is whether this is just a relief rally or something that can be sustained longer-term.
On housing: in 2010, it took the average American 3.3 years of gross income to buy a new home. Now, the ratio is 6.0 years. Crazy stuff.
Nick has been writing Morning Core for seven years — since before ChatGPT was on anyone's radar — and is happy to keep writing in his own words. "Although, I'm guessing you could already tell by my weak grammar and frequent typos."
CORE Headlines
- Iran warning of expanded strikes on regional oil producers and European countries. — Bloomberg
- Iran experiencing panic buying of food, fuel, and labor shortages amid U.S. economic pressure. — WSJ
- CIA Director Ratcliffe traveled to Moscow to warn Russia against attacking NATO allies. — WSJ
- Nvidia aiming to purchase Hugging Face for $12.9B. — The Information
- The Trump administration is considering new tariffs on semiconductors. — Politico
- Meta agreed to an $18B settlement with 48 state AGs over social media's harm to teenagers. — WSJ
- Amazon will add 2 million Nvidia GPUs to its data center fleet over the next two years. — Bloomberg
- U.S. disrupted a China-linked hacking operation targeting government networks and critical infrastructure. — WSJ
Charts & Data
Nvidia jumped to $222 premarket — the stock was down 7 straight sessions going in, so the print came at a moment of maximum pessimism. TradingView: a textbook bear trap.
Energy positioning increasingly crowded — any genuine geopolitical progress could produce a meaningful unwind across both oil and linked equities. Goldman via Daily Chartbook: the most vulnerable crowded trade right now.
Positive earnings breadth near previous cyclical highs — Yardeni doubts the "circular financing" AI bubble narrative. Yardeni Research: the earnings story is real.
Mag 7 grew EPS 119% YoY in Q2. Excluding Alphabet and Amazon, growth drops to 43%. The Other 493 rose 32% — best since Q4 2021. FactSet via Daily Chartbook: the broadening of earnings growth is the most important market story of Q2.
The growth gap between Mag 7 and Other 493 is expected to flip in favor of the Other 493 by Q4. FactSet: the case for continued sector rotation is strengthening.
Corporate profits hit all-time highs in Q2 — up 22.8% year-over-year. @kevrgordon: EARNINGS MOVE STOCKS.
Interesting Reads
- The hidden 'tax' you pay when you lead too fast — Fast Company
- Ted Merz on writing with AI and the Druckenmiller WSJ dustup — Surface Area
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