Memory and Storage Names Rebound. GOOGL, TSLA Tomorrow.
DRAM +11%, SMH +4.5%, XLK +2.9% after Korea's +6.2% move.
Despite another day of rising oil prices and higher Treasury yields, a rebound in semiconductors, particularly names like MU and SNDK, and some other nice earnings moves, was enough to push the SPX back over 7500 after several failed attempts over the past few sessions.
Part of today’s strength came from overseas. Semiconductor shares got a boost from an overnight rally in Korea. The biggest gains here came from the memory and storage names that had been under pressure over the past few weeks. As we highlighted on Friday, it was possible Friday’s lows could start a technical bounce across these names and that’s a good part of what we saw in the follow through today:
Oil: Equity strength came despite, not because of, the macro backdrop. Crude is now just shy of $85, threatening to break back into the wide $85-$110 range of the first three months of the war.
Yields: US10YY higher to 4.63%, putting it within striking distance of the roughly 4.70% highs of the past two years. The 2YY is back to 4.26%.
Dollar (DXY): Higher to $101.20, though still below the June peak near 101.70.
Gold: Managed to shrug off the stronger dollar and higher yields, bouncing back toward 4100.
Bitcoin: Continues its recovery from recent lows near 58k, now around 66.3k. The 67k area is worth watching, as it marked a failed rally attempt back in June.
VIX: Lower to 17. Tomorrow is VIX expiration, which can sometimes mark a shift in the volatility backdrop, and often involves a weird settlement price in the morning. Keep an eye on how spot VIX behaves over the next few sessions.
Semiconductors: particularly the memory and storage names with Micron (MU): +11% and SanDisk (SNDK): +11%. In the semi space, Texas Instruments (TXN) reports tomorrow.
Mag7+: somewhat mixed but slightly higher as a group. AVGO and NVDA led the gains. MSFT, AAPL, and AMZN were lower, but none saw particularly significant declines.
Energy: modestly higher alongside crude.
JPM +1.9%: Jamie Dimon said markets underestimate risks and that he would not buy stocks or Treasuries at current prices.
MU +12%: Benefitted from (and led) today’s memory and storage name rebound.
GM +5%: Reported a second-quarter beat on the top and bottom lines
COIN: +10%: Strong bounce alongside BTC’s recent move.
MMM: +7%: 3M shares climb in pre-market after strong Q2 earnings and optimistic outlook boost investor confidence
Guy - Again, TLT lower, 10YY above 4.6% this is no bueno.
Dan - Yeah, this may be death by a thousand cuts [on yields].
Guy: Valuation is not ridiculous, I kind of like GOOGL here… The volatility over the last year is staggering”
Articles Mentioned:
Dow pops 300 points boosted by earnings; chipmakers rise (CNBC)
Bessent says U.S. could sanction China over AI model ‘theft’ (CNBC)
Greer hints new Trump tariffs coming on dozens of countries: ‘Expect action soon’ (CNBC)
China’s Moonshot in Talks on Pre-IPO Funds at $50 Billion Value (Bloomberg)
Top American AI Execs Sound Alarm on Chinese Models (WSJ)
Nvidia details its next-generation Vera CPU for AI, setting up challenge to AMD and Intel (CNBC)
Google expands Gemini lineup with cheaper models and new Mythos rival (CNBC)
Apple to Launch ‘Upgrade’ Device Leasing Program With Klarna to Spur Sales (Bloomberg)
SpaceX sets earnings date, triggering first lock-up expiration for millions of shares (CNBC)
Bets against SpaceX grow to 32% of float as Elon Musk warns short sellers won’t survive (CNBC)
Tomorrow is a big earnings day with GOOGL, TSLA, NOW, and TXN after the close. IBM also officially reports after last week’s warning. Short duration volatility collapsed a bit on today’s rally. SPX options are now pricing less than a 0.5% move for tomorrow’s regular session. However, because of those mega cap reports after the close, SPY and QQQ are pricing larger moves.
GOOGL, TSLA and TXN typically release results within minutes of the 4:00 PM ET close
Wednesday, July 22nd
CME - BMO - Exp. Move 4%, Est: $2.91
GEV - BMO - Exp. Move 8%, Est: $3.07
T - BMO - Exp. Move 5%, Est: $0.59
GOOGL - AMC - Exp. Move 6%, Est: $2.90
TSLA - AMC - Exp. Move 6%, Est: $0.54
TXN - AMC - Exp. Move 10%, Est: $1.95
NOW - AMC, Exp. Move 12%, Est: $0.86
IBM - AMC, Exp. Move 6%, Est: $2.92 (pre-announced last week)
CSX - AMC - Exp. Move 4%, Est: $0.52
LUV - AMC - Exp. Move 7%, Est: $0.52
SPX Expected Move: 0.5%
Mixed Signals: Is The Party Just Getting Started or Already Over?
Analysis - DRAM, MAGS, NVDA, MU, SNDK, SMH, GOOGL, GM, MMM, SCHW, COIN, HOOD, COF, HAL, Crude
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Jeff Bell & Richard Betts at Please Don’t Tell | Standing Table #7
Today we’re in the East Village, having cocktails at Please Don’t Tell - one of the most iconic cocktail bars in New York City.
PDT is currently run by award-winning bartender Jeff Bell. Jeff started as a bar back in 2010, and now he owns the place. How about that?
He joins us alongside Richard Betts. There are fewer than 300 Master Sommeliers in the entire world, and Richard was one of them. He’s also built some of the most distinctive brands in the industry, including Sombra Mezcal, Astral Tequila, and most recently Tequila Komos.
We discuss the business of restaurants and hospitality, building a luxury tequila band, and trends in how alcohol is being consumed.
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