U.S. Futures & World Markets

US equity futures are lower this morning as Treasury yields continue their spike higher. Add in higher oil prices and the absence of any material new catalyst, and it's not hard to understand why stocks are taking a breather. Today we'll get tech earnings from MDB, PANW, MDT, and DELL.

Expect to hear plenty of chatter on seasonality trends as we head into September, especially in a mid-term election year. Corporate earnings have been strong, and stocks have done a nice job climbing the wall of worry, but inflation concerns and rising interest rates have investors on edge.

As I always say, only two things move stocks: earnings and interest rates. Right now, the market is trying to come to grips with stickier inflation and higher yields. Ding, Ding! https://mcore.hopp.to/youtube379

S&P Futures vs. Fair Value: -46.00  |  10-Year Yield: 4.79%

CORE Headlines

Charts & Data

Short interest on the median S&P 500 stock jumped to decade-highs. Goldman via Daily Chartbook: a record amount of bearish positioning sitting beneath a bull market — and potentially a lot of future buying power.

Flows into Tech continue their rapid rise, approaching $200B over the past year, while flows across most other sectors are little changed or lower. Deutsche Bank via Daily Chartbook.

Tech buying has been more concentrated in the "AI at risk" bucket vs. the "AI Beneficiaries" — the pair trade is down 46% from the highs. Goldman via Daily Chartbook: software's recent breakout suggests investors are starting to correct that positioning.

September has historically been the weakest month of the year for retail demand — the lowest proportion of annual retail net notional and the lowest directional skew of any month. Scott Rubner, Citadel via Daily Chartbook.

Going back to 1950, the first half of September ranks as the sixth-weakest half-month of the year. The second half of September is the weakest. Goldman via Daily Chartbook.

The buyback blackout window accelerates around September 12 — one of the market's largest and most consistent sources of structural demand progressively disappears. Scott Rubner, Citadel via Daily Chartbook.

Top 100 US pension plans are approximately 112% funded — their highest levels since 2001. Strong funding incentivizes plans to de-glide, creating potential for mechanical equity selling and fixed income buying at quarter-end. Scott Rubner, Citadel via Daily Chartbook.

S&P 500 implied 1-month correlations remain in the single-digits — the lowest ever exiting a Q2 reporting season. Correlations keep moving lower in the AI age. 3Fourteen Research via Daily Chartbook.

Forward earnings estimates continue to push record highs across large, mid, and small caps. Yardeni Research via Daily Chartbook: despite all the macro headwinds, the fundamental earnings story remains intact.

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