U.S. Stocks Rise as Markets Digest PPI Data and Bank Earnings

Stocks Tick Higher After U.S. PPI Data and Big Bank Earnings

Stocks are trending higher at the open after the Labor Department's producer price index (PPI), which tracks inflation before it reaches consumers, rose 0.2% from May to June. Excluding volatile food and energy prices, core wholesale inflation climbed 0.4% monthly and 3% annually. Service sector price increases, particularly higher profit margins for machinery and auto wholesalers, drove the overall rise. In contrast, goods prices fell 0.5%, with gasoline and food prices experiencing significant drops. Big banks are reporting their earnings for the quarter. JPMorgan Chase (JPM) is trading lower, despite exceeding analyst expectations for both earnings and revenue. Wells Fargo (WFC) also beat estimates for earnings and revenue, but their stock price is also dropping. In addition, Citigroup's (C) stock is lower after reporting better-than-expected earnings. One disappointment across the board seems to be net interest income, which fell short of investor expectations. This could be a point of concern for the banking industry. In yesterday's trading session, Wall Street's major indexes closed mixed, with the tech-heavy Nasdaq 100 dropping to a 1-week low. Tesla (TSLA) slumped over -8% and was the top percentage loser on the S&P 500 and Nasdaq 100 after Bloomberg News reported that the company was delaying its planned robotaxi event by about two months to October. Also, Delta Air Lines (DAL) slid about -4% after the top U.S. carrier posted downbeat Q2 results and provided below-consensus Q3 adjusted EPS guidance. In addition, chip stocks retreated, with Nvidia (NVDA) falling more than -5% and Intel (INTC) dropping nearly -4% to lead losers in the Dow. On the bullish side, WD-40 (WDFC) gained over +4% after the company reported better-than-expected Q3 results. The Labor Department's report on Thursday showed consumer prices edged down -0.1% m/m in June, lower than the predicted figure of +0.1% m/m. On an annual basis, headline inflation eased to +3.0% in June from +3.3% in May, better than expectations of +3.1%. In addition, the core CPI, which excludes volatile food and fuel prices, eased to a 3-year low of +3.3% y/y in June, better than expectations of no change at +3.4% y/y. At the same time, the number of Americans filing for initial jobless claims in the past week fell -17K to a 6-week low of 222K, stronger than expectations of 236K. Chicago Fed President Austan Goolsbee described the latest inflation data on Thursday as "excellent," stating that the figures provided the evidence he has been waiting for to be confident that the central bank is on track to achieve its 2% goal. Also, San Francisco Fed President Mary Daly said, "With the information we have received to date, which include data on employment, inflation, GDP growth, and the outlook for the economy, I see it as likely that some policy adjustment will be warranted." At the same time, St. Louis Fed President Alberto Musalem stated that the June CPI report indicated "encouraging further progress towards lower inflation," but he would like additional evidence of easing price pressures. "We'll see you September! Better-than-expected inflation readings in many key sectors should allow the Fed to start talking about adjusting policy in July - and potentially allow the Fed to act in September," said George Mateyo at Key Wealth. "That said, we still see the Fed wanting to gain further confidence before cutting aggressively unless stress materializes in the labor market." U.S. rate futures have priced in a 6.7% chance of a 25 basis point rate cut at the next FOMC meeting in July and an 86.4% probability of a 25 basis point rate cut at the September FOMC meeting. Meanwhile, the second-quarter corporate earnings season gets underway, with some of the biggest U.S. banks, including JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C), slated to release their quarterly results today. On the economic data front, all eyes are focused on the U.S. Producer Price Index, set to be released in a couple of hours. Economists, on average, forecast that the U.S. June PPI will stand at +0.1% m/m and +2.3% y/y, compared to the previous figures of -0.2% m/m and +2.2% y/y. The U.S. Core PPI will also be closely watched today. Economists expect June's figures to be +0.2% m/m and +2.5% y/y, compared to the previous numbers of 0.0% m/m and +2.3% y/y. The U.S. Michigan Consumer Sentiment preliminary reading will be reported today as well. Economists estimate this figure to arrive at 68.5 in July, compared to 68.2 in June. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.222%, up +0.77%. The Euro Stoxx 50 futures are up +0.40% this morning as investors digested upbeat earnings updates and awaited the release of U.S. producer inflation data due later in the day. Telecom stocks led the gains on Friday, with Telefonaktiebolaget Lm Ericsson (ERICB.S.DX) surging over +6% after the company reported a smaller-than-expected drop in Q2 revenue. Final data from statistics agency Insee showed Friday that the French annual inflation rate cooled less than expected to 2.2% in June. Separately, the National Statistics Institute reported on Friday that Spain's annual inflation rate eased to 3.4% in June, confirming preliminary data. In other corporate news, Norwegian Air Shuttle ASA (NAS.O.DX) climbed more than +5% after reporting better-than-expected Q2 operating profit. France's CPI and Spain's CPI data were released today. The French June CPI came in at +0.1% m/m and +2.2% y/y, compared to expectations of +0.1% m/m and +2.1% y/y. The Spanish June CPI stood at +0.4% m/m and +3.4% y/y, compared to expectations of +0.3% m/m and +3.4% y/y. Asian stock markets today settled mixed. China's Shanghai Composite Index (SHCOMP) closed up +0.03%, and Japan's Nikkei 225 Stock Index (NIK) closed down -2.45%. China's Shanghai Composite Index closed just above the flatline today as investors digested mixed trade data from the country and looked ahead to the key political economy meeting, the Third Plenum. Property stocks outperformed on Friday as investors anticipated additional stimulus for the property sector in the upcoming plenum meeting. Customs data released on Friday revealed that China's exports grew more than expected in June, marking the fastest growth in outbound shipments since March 2023, while imports unexpectedly fell in another sign of subdued domestic demand. Meanwhile, all eyes are now on the Third Plenum of the Chinese Communist Party, set to commence on Monday, where some fiscal and financial reform measures are expected to be unveiled. In corporate news, Beijing Yanjing Brewery climbed over +6% after announcing it anticipates a 55% year-on-year increase in its first-half attributable net profit to a range between 719.5 million yuan and 796.5 million yuan. The Chinese June Trade Balance came in at $99.05B, stronger than expectations of $85.10B. The Chinese June Exports stood at +8.6% y/y, stronger than expectations of +8.0% y/y. The Chinese June Imports arrived at -2.3% y/y, weaker than expectations of +2.8% y/y. Japan's Nikkei 225 Stock Index closed sharply lower today, posting its steepest decline in over two and a half months, as overnight losses on Wall Street and the threat of currency intervention prompted profit-taking. Electronics and financial stocks led the declines on Friday following a rout in U.S. technology stocks overnight, which led to a sharp drop in bond yields. Data from the Ministry of Economy, Trade, and Industry on Friday showed that Japan's industrial production was revised upward in May. Separately, a quarterly Bank of Japan survey revealed on Friday that nearly 90% of Japanese households anticipate prices will rise a year from now, a sign of heightening inflation expectations that would support the case for a near-term interest rate hike. Meanwhile, the Japanese yen hovered around 159 per dollar on Friday and is expected to remain volatile after rebounding sharply in the previous session due to a suspected intervention from Japanese authorities following cooler-than-anticipated U.S. inflation data. The Nikkei newspaper also reported that the BOJ conducted so-called rate checks with banks on the euro against the yen on Friday, a move often regarded as a precursor to intervention. Japan's top currency diplomat, Masato Kanda, said Friday that authorities will take action as needed in the foreign exchange market but refrained from commenting on whether the government intervened to support the yen on Thursday. In corporate news, SoftBank Group slumped over -4% after announcing the acquisition of artificial intelligence chipmaker Graphcore. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +1.38% to 18.37. The Japanese May Industrial Production came in at +3.6% m/m, stronger than expectations of +2.8% m/m. Pre-Market U.S. Stock Movers Tesla (TSLA) fell over -1% in pre-market trading after UBS downgraded the stock to Sell from Neutral with a price target of $197. Array Technologies (ARRY) climbed about +7% in pre-market trading after Citi upgraded the stock to Buy from Neutral with a price target of $14. Carvana (CVNA) gained more than +1% in pre-market trading after BTIG initiated coverage of the stock with a Buy rating and a $155 price target. Booking Holdings (BKNG) rose nearly +1% in pre-market trading after Benchmark upgraded the stock to Buy from Hold with a $4,700 price target. ASP Isotopes (ASPI) tumbled over -18% in pre-market trading after the company announced that it had commenced an underwritten public offering of shares of its common stock. JPMorgan (JPM), Wells Fargo&Co (WFC), Citigroup (C), Bank of NY Mellon (BK), Fastenal (FAST). More Stock Market News from Barchart On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

S&P Futures Tick Higher Ahead of Key U.S. PPI Data and Big Bank Earnings

September S&P 500 E-Mini futures (ESU24) are trending up +0.12% this morning, stabilizing after yesterday's tech-led selloff, with investors looking ahead to crucial U.S. producer inflation data and earnings reports from some of the biggest U.S. banks. In yesterday's trading session, Wall Street's major indexes closed mixed, with the tech-heavy Nasdaq 100 dropping to a 1-week low. Tesla (TSLA) slumped over -8% and was the top percentage loser on the S&P 500 and Nasdaq 100 after Bloomberg News reported that the company was delaying its planned robotaxi event by about two months to October. Also, Delta Air Lines (DAL) slid about -4% after the top U.S. carrier posted downbeat Q2 results and provided below-consensus Q3 adjusted EPS guidance. In addition, chip stocks retreated, with Nvidia (NVDA) falling more than -5% and Intel (INTC) dropping nearly -4% to lead losers in the Dow. On the bullish side, WD-40 (WDFC) gained over +4% after the company reported better-than-expected Q3 results. The Labor Department's report on Thursday showed consumer prices edged down -0.1% m/m in June, lower than the predicted figure of +0.1% m/m. On an annual basis, headline inflation eased to +3.0% in June from +3.3% in May, better than expectations of +3.1%. In addition, the core CPI, which excludes volatile food and fuel prices, eased to a 3-year low of +3.3% y/y in June, better than expectations of no change at +3.4% y/y. At the same time, the number of Americans filing for initial jobless claims in the past week fell -17K to a 6-week low of 222K, stronger than expectations of 236K. Chicago Fed President Austan Goolsbee described the latest inflation data on Thursday as "excellent," stating that the figures provided the evidence he has been waiting for to be confident that the central bank is on track to achieve its 2% goal. Also, San Francisco Fed President Mary Daly said, "With the information we have received to date, which include data on employment, inflation, GDP growth, and the outlook for the economy, I see it as likely that some policy adjustment will be warranted." At the same time, St. Louis Fed President Alberto Musalem stated that the June CPI report indicated "encouraging further progress towards lower inflation," but he would like additional evidence of easing price pressures. "We'll see you September! Better-than-expected inflation readings in many key sectors should allow the Fed to start talking about adjusting policy in July - and potentially allow the Fed to act in September," said George Mateyo at Key Wealth. "That said, we still see the Fed wanting to gain further confidence before cutting aggressively unless stress materializes in the labor market." U.S. rate futures have priced in a 6.7% chance of a 25 basis point rate cut at the next FOMC meeting in July and an 86.4% probability of a 25 basis point rate cut at the September FOMC meeting. Meanwhile, the second-quarter corporate earnings season gets underway, with some of the biggest U.S. banks, including JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C), slated to release their quarterly results today. On the economic data front, all eyes are focused on the U.S. Producer Price Index, set to be released in a couple of hours. Economists, on average, forecast that the U.S. June PPI will stand at +0.1% m/m and +2.3% y/y, compared to the previous figures of -0.2% m/m and +2.2% y/y. The U.S. Core PPI will also be closely watched today. Economists expect June's figures to be +0.2% m/m and +2.5% y/y, compared to the previous numbers of 0.0% m/m and +2.3% y/y. The U.S. Michigan Consumer Sentiment preliminary reading will be reported today as well. Economists estimate this figure to arrive at 68.5 in July, compared to 68.2 in June. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.222%, up +0.77%. The Euro Stoxx 50 futures are up +0.40% this morning as investors digested upbeat earnings updates and awaited the release of U.S. producer inflation data due later in the day. Telecom stocks led the gains on Friday, with Telefonaktiebolaget Lm Ericsson (ERICB.S.DX) surging over +6% after the company reported a smaller-than-expected drop in Q2 revenue. Final data from statistics agency Insee showed Friday that the French annual inflation rate cooled less than expected to 2.2% in June. Separately, the National Statistics Institute reported on Friday that Spain's annual inflation rate eased to 3.4% in June, confirming preliminary data. In other corporate news, Norwegian Air Shuttle ASA (NAS.O.DX) climbed more than +5% after reporting better-than-expected Q2 operating profit. France's CPI and Spain's CPI data were released today. The French June CPI came in at +0.1% m/m and +2.2% y/y, compared to expectations of +0.1% m/m and +2.1% y/y. The Spanish June CPI stood at +0.4% m/m and +3.4% y/y, compared to expectations of +0.3% m/m and +3.4% y/y. Asian stock markets today settled mixed. China's Shanghai Composite Index (SHCOMP) closed up +0.03%, and Japan's Nikkei 225 Stock Index (NIK) closed down -2.45%. China's Shanghai Composite Index closed just above the flatline today as investors digested mixed trade data from the country and looked ahead to the key political economy meeting, the Third Plenum. Property stocks outperformed on Friday as investors anticipated additional stimulus for the property sector in the upcoming plenum meeting. Customs data released on Friday revealed that China's exports grew more than expected in June, marking the fastest growth in outbound shipments since March 2023, while imports unexpectedly fell in another sign of subdued domestic demand. Meanwhile, all eyes are now on the Third Plenum of the Chinese Communist Party, set to commence on Monday, where some fiscal and financial reform measures are expected to be unveiled. In corporate news, Beijing Yanjing Brewery climbed over +6% after announcing it anticipates a 55% year-on-year increase in its first-half attributable net profit to a range between 719.5 million yuan and 796.5 million yuan. The Chinese June Trade Balance came in at $99.05B, stronger than expectations of $85.10B. The Chinese June Exports stood at +8.6% y/y, stronger than expectations of +8.0% y/y. The Chinese June Imports arrived at -2.3% y/y, weaker than expectations of +2.8% y/y. Japan's Nikkei 225 Stock Index closed sharply lower today, posting its steepest decline in over two and a half months, as overnight losses on Wall Street and the threat of currency intervention prompted profit-taking. Electronics and financial stocks led the declines on Friday following a rout in U.S. technology stocks overnight, which led to a sharp drop in bond yields. Data from the Ministry of Economy, Trade, and Industry on Friday showed that Japan's industrial production was revised upward in May. Separately, a quarterly Bank of Japan survey revealed on Friday that nearly 90% of Japanese households anticipate prices will rise a year from now, a sign of heightening inflation expectations that would support the case for a near-term interest rate hike. Meanwhile, the Japanese yen hovered around 159 per dollar on Friday and is expected to remain volatile after rebounding sharply in the previous session due to a suspected intervention from Japanese authorities following cooler-than-anticipated U.S. inflation data. The Nikkei newspaper also reported that the BOJ conducted so-called rate checks with banks on the euro against the yen on Friday, a move often regarded as a precursor to intervention. Japan's top currency diplomat, Masato Kanda, said Friday that authorities will take action as needed in the foreign exchange market but refrained from commenting on whether the government intervened to support the yen on Thursday. In corporate news, SoftBank Group slumped over -4% after announcing the acquisition of artificial intelligence chipmaker Graphcore. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +1.38% to 18.37. The Japanese May Industrial Production came in at +3.6% m/m, stronger than expectations of +2.8% m/m. Pre-Market U.S. Stock Movers Tesla (TSLA) fell over -1% in pre-market trading after UBS downgraded the stock to Sell from Neutral with a price target of $197. Array Technologies (ARRY) climbed about +7% in pre-market trading after Citi upgraded the stock to Buy from Neutral with a price target of $14. Carvana (CVNA) gained more than +1% in pre-market trading after BTIG initiated coverage of the stock with a Buy rating and a $155 price target. ASP Isotopes (ASPI) tumbled over -18% in pre-market trading after the company announced that it had commenced an underwritten public offering of shares of its common stock. JPMorgan (JPM), Wells Fargo&Co (WFC), Citigroup (C), Bank of NY Mellon (BK), Fastenal (FAST). More Stock Market News from Barchart On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

North American Morning Briefing : Bank Earnings in the Spotlight

Index futures were little changed Friday, with Treasury yields broadly steady, with investors waiting for data on producer prices and consumer sentiment, following data that showed a surprise dip in consumer prices in June. On the corporate front, big bank earnings kick off, Investors will be on the lookout for more signs of weakness in the banking system, as well as the impact of higher-for-longer interest rates and cracks in consumers' finances. Overseas Markets Japan's Nikkei 225 dropped 2.4%, while Hong Kong's Hang Seng Index rose 2.6%. The Stoxx Europe 600 edged up. Postmarket Movers Estée Lauder said that finance chief Tracey Travis is leaving after more than a decade. Shares rose 0.2%. LuxUrban Hotels launched a proposed follow-on public offering of shares and prefunded warrants. Shares dropped 13%. ASP Isotopes started an underwritten public offering of its common stock. Shares fell 17%. Premarket Movers Tesla's shares dropped, on track to extend Thursday's steep losses, when they fell over 8%. Bloomberg reported the company was postponing plans to unveil its Robotaxi in August. Microsoft: Republican lawmakers are seeking a probe into the company's $1.5 billion investment in Abu Dhabi-based AI firm G42, citing concerns about possible ties with China. Watch For: PPI for June, University of Michigan Preliminary Consumer Survey for July, World Agricultural Supply & Demand Estimates -Economists Say Inflation Would Be Worse Under Trump Than Biden -The Tight-Lipped Approach to Biden's Health Disclosures -Is Kamala Harris a Stronger Candidate Than Biden? Further evidence of declining price pressures in producer-price index data would potentially weigh on the dollar and some profit taking might still emerge after a possibly firmer University of Michigan consumer-confidence survey, UniCredit Research said. Lingering downside risks for the dollar amid growing expectations for U.S. interest-rate cuts mean the euro could reattempt breaking above $1.0900 soon, ING said, as French political risks are sidelined while markets wait for news on coalition talks. Beyond the very short term, markets could grow impatient with the French political stalemate and start to price back in a degree of fiscal risk into the euro, it added. Sterling could rise further against the dollar if data on July 17 shows U.K. inflation remained sticky in June compared with a lower-than-forecast June U.S. inflation report on Thursday, Societe Generale said. Consensus forecasts show U.K. core inflation holding at 3.5%, which continues to give the Bank of England a "mild headache," SocGen added. Japan might conduct more FX intervention near term if USD/JPY swiftly rebounds above 160.00, BofA Securities Japan said, noting Japanese authorities' suspected intervention in FX markets overnight and possibly again in Tokyo's morning. The Bank of Japan's end-July meeting will be closely watched, given policymakers would want to avoid sustained JPY weakness after authorities' suspected interventions and the BOJ's potential policy tightening, it added. Energy: Oil prices rose after the latest CPI reading fueled hopes for a September rate cut, providing support to the commodities complex. "We continue to hold onto our view that ICE Brent will average $88 a barrel in the current quarter," ING said. However, price gains are capped by concerns over the demand outlook in top consumer China, after crude imports reportedly fell in June and the IEA said oil demand contracted in April and May. Metals: Gold futures fell, giving back some gains from Thursday's rally but holding above the $2,400 mark on softer-than-expected inflation data. TODAY'S TOP HEADLINES Nvidia Stock Rebounding After Selloff. But Its AI Chips Face This New Threat. Nvidia was edging up early on Friday. The chip maker looked to be stabilizing after a sharp drop the previous day. Nvidia shares were up 0.6% at $128.14 in premarket trading. The stock closed down 5.6% on Thursday. China's Export Growth Tops Expectations, but Imports Post Surprise Drop China's exports grew more than expected in June, while imports fell unexpectedly in another sign of weak domestic demand. Outbound shipments rose 8.6% from a year earlier in June, up from May's 7.6% increase, the General Administration of Customs said Friday. China's Economy Is Flagging. A Five-Year Plan Seeks to Change That. Chinese President Xi and other top Communist Party officials gather next week for the Third Plenum, a once-in-five-years meeting to chart a fresh course for the world's second-largest economy. The four-day summit comes at a time when China's recovery from a property-sector collapse pandemic-fueled slowdown remains in doubt. The meeting had also been delayed without explanation, raising speculation about what policy may be unveiled to drive growth in the next five years. Analysts will watch the event closely to learn how leaders aim to rebuild confidence among households and the private sector, with possible policies ranging from changing the retirement age to opening more sectors up to foreign investment. Here's what to watch: FISCAL REFORM Why Dividend Aristocrats and REIT Stocks Are Poised to Rally The Fed is finally gearing up to cut rates. For high-yield stocks that compete with bonds for investment dollars, it is very good news. It hasn't been a great year for dividend investors. While the stock market has posted handsome returns, those have largely been driven by a handful of big tech stocks with bright prospects in artificial intelligence. While five of the Magnificent Seven tech stocks do pay dividends, yields are microscopic. Nvidia's is just 0.03%. Big Tech Regulation Remains Popular. Why It May Never Happen. Back in October 2017, the cover of Barron's featured a heavy mallet lying next to mashed up Big Tech logos. At the time, the push to regulate and even break up tech companies was gaining stream. It was a prescient story given the countless regulatory efforts still to come. There have been press conferences and multiple high-profile hearings, led by both Democratic and Republican Congresses. There have been exhaustive reports written by congressional committees. There have been investigations and trials. In the end nothing has happened. Biden Tries to Slow Defections With Press Conference WASHINGTON-President Biden held a high-stakes news conference Thursday in which he was forceful and defiant, vowing to pursue re-election and finish the job he started, but he also made some flubs as he tried to slow a stream of Democratic defections that risked turning into a mutiny. Democrats have continued to break with their 81-year-old standard-bearer following a calamitous debate and public appearances that haven't reassured colleagues about his fitness for the campaign trail or a second term. Biden has pledged to keep running, but many lawmakers have pushed him to reconsider, with more than a dozen going so far as to publicly call for him to step aside in favor of another candidate. Caldwell Partners International Chairman Elias Vamvakas Dies; Names Richard W. Pehlke to Board; 3Q Basic EPS C$0.06 Cogeco Inc. 3Q Rev C$777.2M; 3Q EPS C$1.97; 3Q Adj EPS C$3.02 Cogeco Communications 3Q EPS C$1.67; 3Q Adj EPS C$2.45; 3Q Rev C$750.6M; Backs FY24 Financial Guidelines Velan 1Q Loss/Shr 5c; 1Q Sales $77.5M; Strong 1Q Results Highlighted by Growing Order Backlog; Velan Reiterates Expectations to Deliver Sales Growth in Fiscal 2025 14:00/US: Jul University of Michigan Survey of Consumers - preliminary 16:00/US: World Agricultural Supply & Demand Estimates (WASDE) 16:59/GER: May Balance of Payments All times in GMT. Powered by Kantar Media and Dow Jones. Expected Earnings for Friday Bank of New York Mellon Corp (BK) is expected to report $1.42 for 2Q. Citigroup Inc (C) is expected to report $1.39 for 2Q. Environmental Tectonics Corp (ETCC) is expected to report for 1Q. Neptune Wellness Solutions Inc (NEPT-T) is expected to report for 4Q. Niko Resources (NKO-T,NKRSF) is expected to report for 4Q. Nurix Therapeutics Inc (NRIX) is expected to report $-0.75 for 2Q. Pressure BioSciences Inc (PBIO) is expected to report for 1Q. Singing Machine Co Inc (MICS) is expected to report for 4Q. Video Display Corp (VIDE) is expected to report for 1Q. Virginia National Bankshares Corp (VABK) is expected to report for 2Q. Abercrombie & Fitch Cut to Hold From Buy by Argus Research Albemarle Cut to Equal-Weight From Overweight by Wells Fargo Astrana Health Raised to Buy From Hold by Truist Securities Big Lots Raised to Hold From Sell by Loop Capital Brainstorm Cell Therptcs Raised to Buy From Hold by Maxim Group Casey's General Stores Raised to Buy From Neutral by Northcoast Research Chuy's Holdings Cut to Hold From Buy by Jefferies Darden Restaurants Cut to Underperform From Hold by Jefferies Envestnet Cut to Market Perform From Outperform by William Blair Itron Raised to Buy From Neutral by Guggenheim Knight-Swift Transport Cut to Peer Perform From Outperform by Wolfe Research Lamar Advertising Cut to Neutral From Buy by Citigroup

Catalyst Watch: Netflix, Taiwan Semi, Amazon, and HashiCorp are in the spotlight

Welcome to Seeking Alpha's Catalyst Watch - a breakdown of some of next week's actionable events that stand out. Check out Seeking Alpha's earnings calendar for a full list of companies due to report. Monday - July 15 Volatility watch - Options trading volume is elevated on Cipher Mining (CIFR) and SoundHound AI (SOUN). The most overbought stocks per their 14-day relative strength index include Zapp Electric Vehicles Group (ZAPP), Tesla (TSLA), and Power Solutions (OTCPK:PSIX). The most oversold stocks per their 14-day Relative Strength Index include Helen of Troy (HELE), HilleVax (HLVX), and Indivior (INDV). Short interest has moved higher on Blue Star Foods (BSFC), Volcon (VLCN), and Guess? (GES). All week - The Communist Party of China will hold its Third Plenum policy meeting. The biggest impact for investors is expected updates on policies and reforms in the real estate property sector. Earnings watch - Notable companies due to report include Goldman Sachs (GS) and Blackrock (BLK). All day - Broadcom (AVGO) will begin trading on a split-adjusted basis after the company's 10-for-1 stock split. All day - HashiCorp (HCP) shareholders will vote on the pending merger with IBM (IBM). Shares of HashiCorp traded about 4.2% below the deal price at the time of publication amid concerns over the regulatory process. All day - Notable investor events include Bristol-Myers Squibb (BMY) participating at the UBS' Virtual Targeted Protein Degradation Day and Revolution Medicines' (RVMD) business update on its RMC-6236 therapy. 10:00 a.m. Federal Reserve Chairman Jerome Powell will participate in an interview hosted by the Economic Club of Washington. 12:00 p.m. Robinhood Markets (HOOD) CEO Vlad Tenev will speak at the Fortune Live Media Conference in Park City, Utah. 3:35 p.m. San Francisco Federal Reserve Bank President Mary Daly will participate in a session called "The Bull, the Bear, and the Banker" before the Fortune Brainstorm Tech 2024. 4:00 p.m. The USDA will issue its crop condition report. Traders have the report circled as potentially more significant than normal for corn (C_1:COM), soybean (S_1:COM), and wheat (W_1:COM) futures. Tuesday - July 16 Earnings watch - Notable companies due to report include UnitedHealth (UNH), Bank of America (BAC), Progressive (PGR), Morgan Stanley (MS), PNC Financial (PNC), and JB Hunt Transport (JBHT). All day - Notable investor events include Charles Schwab's (SCHW) business update call, Rio Tinto's (RIO) Q2 operations review, Scotts Miracle-Gro's (SMG) Investor Day, and an extraordinary shareholder meeting for Alcoa Corporation (AA). All day - Amazon Prime (AMZN) will hold its two-day Prime Day event. Target (TGT), Kohl's (KSS), Nordstrom (JWN), Best Buy (BBY), and Walmart (WMT) all have shopping events either just before or overlapping with Prime Day. 8:30 a.m. The June Retail Sales report will be released. 9:50 a.m. Zoox CEO Aicha Evans will speak at the Fortune Live Media conference about how the Amazon (AMZN) autonomous vehicle subsidiary plans to make a robotaxi concept a practical reality. 2:45 p.m. Lucid Group (LCID) CEO Peter Rawlinson will speak at the Fortune Live Media Conference in Park City, Utah. Wednesday - July 17 Earnings watch - Notable companies due to report include Johnson & Johnson (JNJ), U.S. Bancorp (USB), Kinder Morgan (KMI), United Airlines (UAL), and Ally Financial (ALLY). Options trading implies a swing of 7% after ASML's (ASML) earnings report drops. All day - The Mirage hotel casino will close in Las Vegas to end the run of one of the Strip's most iconic properties. MGM Resorts International (MGM) and Caesars Entertainment (CZR) could benefit from higher room rates in the near term due to the combined reduction in total room supply on the Las Vegas Strip from the Tropicana and Mirage closings. All day - WTI crude June futures will expire. Crude oil futures have seen extra volatility over the last year on contract expiration dates. 11:00 a.m. JPMorgan (JPM) CEO Jamie Dimon will share his perspectives on the economy, interest rates, global politics, and other topics at an event for wealth management customers. 2:00 p.m. The Federal Reserve will release its Beige Book report. Thursday - July 18 Earnings watch - Notable companies due to report include Netflix (NFLX), Abbott Laboratories (ABT), Blackstone (BX), Domino's Pizza (DPZ), and Taiwan Semiconductor Manufacturing (TSM). 7:45 a.m. The European Central Bank will release a policy statement. The ECB is expected to hold rates level, but the policy and press conference will be watched closely. All day - Hospital and healthcare clinic operator Ardent Health Partners (ARDT) and insurance services provider Twfg (TWFG) are expected to start trading after pricing their IPOs. 8:30 a.m. The ten-day Indonesia International Auto Show will begin. VinFast Auto (VFS) and BYD Company (OTCPK:BYDDF) are two of the notable Asian automakers that will be participating. 12:45 p.m. Dallas Federal Reserve Bank President Lorie Logan, San Francisco Federal Reserve Bank President Mary Daly and Federal Reserve Board Governor Michelle Bowman will all participate in the "Exploring Conventional Bank Funding Regimes in an Unconventional World" conference. Friday - July 19 Earnings watch - Notable companies due to report include American Express (AXP), Halliburton (HAL), and Travelers (TRV). All day - Shareholders of Hibbett (HIBB) will vote on the acquisition offer from JD Sports Fashion (OTCPK:JDSPY). Hibbett traded 1% below the takeover offer price at the time of publication. All day - It is the one-year anniversary of the Oddity Tech (ODD) IPO. The consumer tech stock traded at $42.33 at the time of publication, vs. the IPO pricing level of $35.00 and post-IPO high of $56.00. All day - The Federal Reserve and OCC will hold a joint hearing on the Discover Financial (DFS)-Capital One (COF) deal. All day - It is the last business day before the blackout period for FOMC participants ahead of the July 30-31 meeting. New York Federal Reserve Bank President John Williams and Atlanta Federal Reserve Bank President Raphael Bostic are both scheduled to make public appearances. All day - Biotech firm Lirum Therapeutics (LRTX) is expected to start trading after the company prices its IPO. Seeking Alpha Editor Josh Fineman contributed to this story. More on the markets S&P 500: Quantifying The Prospects For A Lost Decade SPY: Higher Multiples Are Justified Wall Street Exclusive - Searching For Diversity Investors inject capital into the fund market for the tenth week in twelve Wells Fargo calls for an oversold bounce rather than a market rotation

Will PPI Moderate, Too?

More inflation data is in focus today, with the producer-price index for June releasing at 8:30 a.m. ET. On Thursday, data showed that consumer prices eased substantially last month. Meanwhile, PepsiCo and Conagra are the newest in a long list of companies warning that American shoppers are stretched. And yields of 9% are drawing some investors to leveraged loans. Read on for this news and more. Top News Milder Inflation Opens Door Wider to September Rate Cut The consumer-price index, a measure of goods and services costs across the economy, fell slightly from May , dropping the year-over-year inflation rate to 3%, which was the lowest since June 2023. Core prices, which exclude volatile food and energy items and are seen as a better gauge of underlying inflation, rose just 0.1% since May. That was the mildest increase since January 2021, when large swaths of the economy were still frozen by the pandemic. Hannon's Take: The BOE's Hawks Make Their Case, but a Cut Is Still Possible By Paul Hannon The Bank of England's hawks have been out in force this week, arguing without opposition against a cut in the key interest rate. But that doesn't mean the central bank will leave borrowing costs unchanged at its next policy meeting. The BOE's Monetary Policy Committee held its key rate at a 16-year high at its June 20 meeting. While the votes of MPC members were unchanged, with only two supporting a rate cut, the record noted that for some of the seven who had backed a hold, the decision was "finely balanced." U.S. Economy Cheetos Are the Latest Economic Red Flag Signs keep accumulating that U.S. consumers are in trouble . Investors are paying heed. The latest warnings came from two packaged-food giants on Thursday, PepsiCo and Conagra Brands. Both reported weak quarterly results and said they see American shoppers under pressure. Financial Regulation The Risky-Loan Trade Is Back A corner of Wall Street long shunned by investors is suddenly in demand. Higher rates over the past two years were expected to slam risky corporate borrowers that rely heavily on floating-rate debt. That hasn't happened. Instead, low-rated corporate loans have steadily outperformed investment-grade bonds and are drawing inflows for the first time since 2021. 10 a.m.: University of Michigan Survey of Consumers (preliminary) 12 p.m.: Economic Club of Washington, D.C., event with Federal Reserve Chair Jerome Powell Research Falling Prices Means Rising Margins for Used Car Dealers Used car dealers may be celebrating the 10% year-over-year drop in used car prices from the June CPI report, Jefferies analyst Bret Jordan said in an interview. With car values falling, churn in the market is likely to rise as consumers are more willing to part with their vehicles. This in turn will loosen supply and allow dealers to increase their margins as cars become less expensive at auction. The June CPI numbers are in line with the Manheim Used Vehicle Value Index, which found a similar 8.9% price drop. - Victor Swezey Basis Points Why wait until September? That is the question hanging over markets after Thursday's surprisingly weak inflation reading. There doesn't seem to be much reason for the Federal Reserve to put off cutting rates any longer, and waiting too long carries risks of its own. - Aaron Back San Francisco Federal Reserve Bank President Mary Daly said Thursday that she now supports cutting interest rates . "With the information we have received today, which includes data on employment, inflation, [gross domestic product] growth and the outlook for the economy, I see it as likely that some policy adjustments will be warranted," Daly said in a roundtable with reporters. - MarketWatch Chicago Fed President Austan Goolsbee on Thursday said the details of the June consumer inflation report helped build his confidence [https://www.marketwatch.com/story/feds-goolsbee-profoundly-encouraging-june-cpi-data-makes-case-for-rate-cuts-f1b65685#::text=Chicago%20Fed%20President%20Austan%20Goolsbee%20on%20Thursday%20said%20the%20details, roundtable%20at%20his%20regional%20bank.] that the price level is going back toward a 2% annual rate of inflation. "I think this is what the path to 2% looks like," Goolsbee told reporters at a roundtable at his regional bank. - MarketWatch St. Louis Federal Reserve Bank President Alberto Musalem wants to see more evidence [https://www.marketwatch.com/story/feds-musalem-wants-more-proof-inflation-is-slowing-before-backing-interest-rate-cuts-7d869cf3#::text=The%20first%20decline%20in%20consumer, Rock%2C%20Ark.%2C%20Thursday.] inflation is slowing before he will back a reduction in interest rates. "I think we are on a good path," Musalem said at an event in Little Rock, Ark., Thursday. "I try not to focus on the latest data point," he said, adding that he wants to see a string of benign inflation readings. - MarketWatch Inflation-weary shoppers are finally cutting back on potato chips. For the past few years as prices soared, many consumers kept buying affordable treats like Doritos and Lay's in lieu of bigger-ticket splurges such as restaurants, concerts or travel. But now, they are limiting their spending in all areas, said Jamie Caulfield, PepsiCo's chief financial officer. - Nicholas G. Miller Most economists believe inflation, deficits and interest rates would be higher during a second Trump administration than if Biden remains in the White House, according to a quarterly survey of forecasters by The Wall Street Journal. - Paul Kiernan and Anthony DeBarros The federal budget deficit was $1.26 trillion in the first nine months of the fiscal year, the Treasury Department reported Thursday- a 9% drop compared with the year-ago period . The year-to-date figure includes a monthly deficit for June of $66 billion-a figure that would have been more than twice as large if not for calendar-related quirks in the timing of payments. - MarketWatch The IRS says it has clawed back more than $1 billion in unpaid taxes from millionaires who were skipping payment of undisputed tax bills - that is, they were skipping them until the agency started stiffening enforcement on rich households. - MarketWatch Small-business owners have lots of aggravations. The U.S. Supreme Court just added to their burden. Life insurance can help pay for a transfer of ownership after a small-business owner dies. Now it may bring an unexpected tax bill . - Laura Saunders The Bank of Mexico's decision to keep interest rates on hold last month appeared to be a reaction to postelection market volatility , with the central bank's minutes released Thursday showing a majority of board members willing to consider cuts at subsequent meetings. The central bank board voted 4-1 on June 27 to leave the overnight interest-rate target at 11%, staying on hold for a second consecutive meeting after making a first rate cut in March. - Anthony Harrup Canada's public sector has led the economy in terms of job and wage growth. Economists say it is time for the private sector to pick up the pace, and a series of rate cuts might do the trick . Lower rates would help encourage businesses to boost investment and drive hiring in the private sector, key to shaking off what Bank of Canada Gov. Tiff Macklem calls the economy's Achilles' heel: deteriorating productivity, or living standards. - Paul Vieira China's exports grew more than expected in June, while imports fell unexpectedly in another sign of weak domestic demand. Outbound shipments rose 8.6% from a year earlier in June, up from May's 7.6% increase, the General Administration of Customs said Friday. The result beat the 7.8% growth expected by economists in a Wall Street Journal poll. - Dow Jones Newswires Chinese President Xi and other top Communist Party officials gather next week for the Third Plenum , a once-in-five-years meeting to chart a fresh course for the world's second-largest economy. The four-day summit comes at a time when China's recovery from a property-sector collapse pandemic-fueled slowdown remains in doubt. - Jiahui Huang and Fabiana Negrin Ochoa When China launched its one-child policy more than four decades ago, it sped up an evolution toward smaller family sizes that would have happened more gradually. The policy supercharged the country's workforce: By caring for fewer children, young people could be more productive and put aside more money. There was a price and China is now paying it . - Liyan Qi and Ming Li Executive Insights Here is our weekly roundup of stories from across WSJ Pro that we think you'll find useful. Juries are going "nuclear" with greater frequency, imposing giant verdicts on corporations as they seek to stand up for the little guy. Climate-tech investments were frequently a bright spot in a largely gloomy venture market over the past couple of years. No longer . Corporate tech leaders are looking for ways generative AI can not only boost efficiency but also generate actual revenue . Listen to Microsoft's sustainability chief discuss the company's plans to reduce carbon emissions and help establish new power sources for its data center and AI expansions. About Us WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Hardika Singh in New York. Send your tips, suggestions and feedback to [[email protected]]. This article is a text version of a Wall Street Journal newsletter published earlier today.

Earnings in the week ahead could be the next catalyst for a broadening market

The next catalyst for a market looking to broaden out could be in corporate earnings. The second-quarter earnings season is ramping up in the week ahead at a strange moment for markets. On Thursday, the S & P 500 and Nasdaq Composite tumbled after softer inflation data spurred investors to take profits in the mega-cap tech names, even as internal breadth posted a drastic improvement. Market darling Nvidia dropped in one of its worst days of the year, while interest-rate sensitive groups such as small- and mid-caps outperformed. In fact, Thursday's drop in the top 10 S & P 500 stocks, a decline of 2.2%, and the jump in the broader market, of 1.3%, is the fourth largest rotation to small from large in the past two decades, according to Patrick Palfrey, strategist at UBS. IWM 5D mountain iShares Russell 2000 ETF Next week's earnings results will help investors glean whether that rotation trade is sustainable. Investors are deliberating whether they can continue to count on the artificial intelligence trade that has carried the S & P 500 to all-time highs, or if they should start broadening out their exposure from here. "[Thursday] was certainly a rotation day, where the leaders got pulled down, and the laggards really finally kind of bid this year," said Art Hogan, chief market strategist at B. Riley Financial. "I think the earnings season may be the next catalyst for that type of move." On Friday, at least, it seemed as though the rotation trade was intact. The Dow Jones Industrial Average, which is weighted more toward the real economy than is the S & P 500 and Nasdaq, rose to a new record above 40,000. The rotation trade Many investors expect that big tech could underperform from here, given their high valuations, and even higher expectations heading into earnings season. According to FactSet consensus estimates, S & P 500 companies are set to post blended earnings growth of 9.2% in the second quarter. Keith Buchanan, senior portfolio manager at Globalt Investments, said that he is cautious on the mega-cap names, saying that he's moving to a neutral stance on the group. While he's optimistic about the long-term growth prospects for artificial intelligence, he anticipates some near-term challenges for the companies. "We could have a situation where earnings could you know, 70% of companies could beat earnings, which is a very high clip from a historical standpoint, but 10 or even three or four of the top can meet the number and don't beat, or beat and raise, [and] there's a very high likelihood the market would take that as a disappointing season and trade lower," Buchanan said. "So, I think the dislocations between the top 10 and the other 490 [in the] S & P 500 really distorts the takeaways that you can have on an aggregate level," he added. B. Riley Securities' Hogan said that he still anticipates the S & P 500 could end the year even higher than his original forecast of 5,600, as he expects strong earnings and lower interest rates. "It's not unthinkable to see us exiting this year at 5,800 on the S & P," he said. But he, too, expects investors should trim exposure to the mega-caps and allocate them to other underperforming parts of the market. Historically speaking, at least, the pivot into small caps, and away from Big Tech, could continue for some time, according to UBS. Strategist Palfrey noted that the trend can continue for four weeks following a "significant" one-day rotation, meaning that now is the time for investors to become active stock pickers. "Given large cap managers' propensity to underweight the biggest stocks, [Thursday] proved to be one of the best days for mutual fund alpha generation in the past two decades. This follows a difficult 2Q, when 75% of Large Cap Core managers trailed the S & P 500," Palfrey wrote. "Further underperformance of mega caps should prove beneficial for alpha generation." Read-throughs On the calendar, investors will get further read-throughs on the consumer, such as with the June U.S. retail sales data that is anticipated to come in weaker than in the prior month, according to FactSet consensus estimates. Wall Street will use the data to get a read on the economy. David Sekera, Morningstar's chief U.S. market strategist, said that a weaker-than-expected number could be an indication that "the economy is slowing more than what we currently have modeled into our base case." Quincy Krosby, chief global strategist at LPL Financial, said the retail sales data could show whether the recent small-cap outperformance is "warranted," as the group is more sensitive to changes in the economy. Elsewhere, there are earnings results from the remaining major banks. Goldman Sachs and BlackRock are set to report on Monday. Morgan Stanley and Bank of America are out with results on Tuesday. Artificial intelligence bellwethers ASML and Taiwan Semiconductor are also due out with results, on Wednesday and Thursday, respectively. Week ahead calendar All times ET. Monday, July 15 8:30 a.m. Empire State Index (July) Earnings: Goldman Sachs , BlackRock Tuesday, July 16 8:30 a.m. Export Price Index (June) 8:30 a.m. Import Price Index (June) 8:30 a.m. Retail Sales (June) 10 a.m. Business Inventories (May) 10 a.m. NAHB Housing Market Index (July) Earnings: J.B. Hunt Transport Services , State Street , Morgan Stanley , Bank of America , PNC Financial Services Group , UnitedHealth Group Wednesday, July 17 8:30 a.m. Building Permits (Preliminary) 8:30 a.m. Housing Starts 9:15 a.m. Industrial Production 9:15 a.m. Manufacturing Production 2 p.m. Fed Beige Book Earnings: United Airlines , Discover Financial Services , U.S. Bancorp , Johnson & Johnson , Citizens Financial Group , ASML Thursday, July 18 8:30 a.m. Continuing Jobless Claims (07/06) 8:30 a.m. Initial Claims (07/13) 8:30 a.m. Philadelphia Fed Index (July) 10 a.m. Leading Indicators (June) Earnings: Netflix , M & T Bank , KeyCorp , Domino's Pizza , D.R. Horton , Blackstone , Taiwan Semiconductor Friday, July 19 Earnings: SLB , American Express, Halliburton , Fifth Third Bancorp , Regions Financial , Huntington Bancshares

AI Super Bulls Pay Attention To The Biggest Divergence Since 2001, TSLA Call Buyers Crushed - VanEck Semiconductor ETF (NASDAQ:SMH)

To gain an edge, this is what you need to know today. AI Super Bulls Pay Attention Please click here for an enlarged chart of SPDR S&P 500 ETF Trust SPY which represents the benchmark stock market index S&P 500 (SPX) compared to Invesco QQQ Trust Series 1 QQQ, iShares Russell 2000 ETF IWM, VanEck Semiconductor ETF SMH, NVIDIA Corp NVDA, Tesla Inc TSLA, and KB Home KBH. Note the following: AI super bulls pay attention to the chart as it shows major divergences occurring yesterday. The chart shows the small cap ETF IWM outperformed Nasdaq 100 ETF QQQ by 5.9%. This is the biggest such divergence since 2001. The chart shows IWM outperformed S&P 500 ETF SPY by 4.56%. This is the biggest divergence since 2008. Prior to 2008, such divergence occurred in 1979. Semiconductors have been driven higher and higher by the AI frenzy. The chart shows that small cap ETF IWM outperformed semiconductor ETF SMH by 7.77%. The chart shows home builder KBH outperformed AI king NVDA by 17.49%. Most strikingly, the chart shows that home builder KBH outperformed TSLA by 20.38%. Home builder KBH, NVDA, and semiconductor ETF SMH are positions in The Arora Report Model Portfolios with very large unrealized gains. Small cap ETF IWM is in The Arora Report's ZYX Allocation Model Portfolio. The trigger for these moves was lower than expected CPI as we shared with you in yesterday's Morning Capsule. Smart money responded to lower than expected CPI by rotating out of AI stocks and into beneficiaries of a lower interest rate environment. It is important to remember that smart money holds very large positions. Smart money is not wholesale selling AI stocks. Smart money is just taking partial profits. As we previously said, a fortune is to be made in AI over the next six years, but it is not going to be a straight line. At times, it will be treacherous. Yesterday was an indication of what can happen. In the future, yesterday's type of activity can be on steroids. The momo crowd had become extremely aggressive in buying TSLA calls. Yesterday, TSLA call buyers were crushed. It is important to not become extremely aggressive when there are sharp moves up. After yesterday's weak Consumer Price Index (CPI), Producer Price Index is higher than expected (PPI). Here are the details: Headline PPI came at 0.2% vs. 0.1% consensus. Core PPI came at 0.4% vs. 0.1% consensus. University of Michigan Consumer Sentiment will be released at 10am ET and may be market moving. Yesterday, we shared with you that earnings from Fastenal Co FAST would give a good picture of infrastructure and construction activity. FAST reported earnings and revenues inline. Among important bank earnings, JPMorgan Chase & Co JPM, Citigroup Inc C, and Wells Fargo & Co WFC reported earnings and projections better than the consensus. Magnificent Seven Money Flows In the early trade, money flows are positive in Apple Inc AAPL. In the early trade, money flows are neutral in Alphabet Inc Class C GOOG and Microsoft Corp MSFT. In the early trade, money flows are negative in TSLA, NVDA, Amazon.com, Inc. AMZN, and Meta Platforms Inc META. In the early trade, money flows are mixed in SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust Series 1 QQQ. Momo Crowd And Smart Money In Stocks Investors can gain an edge by knowing money flows in SPY and QQQ. Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil. The most popular ETF for gold is SPDR Gold Trust GLD. The most popular ETF for silver is iShares Silver Trust SLV. The most popular ETF for oil is United States Oil ETF USO. Bitcoin Bitcoin BTC/USD is range bound. Protection Band And What To Do Now It is important for investors to look ahead and not in the rearview mirror. Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time. You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive. If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges. A protection band of 0% would be very bullish and would indicate full investment with 0% in cash. A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling. It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks. High beta stocks are the ones that move more than the market. Traditional 60/40 Portfolio Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time. Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of seven year duration or less. Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time. The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter. This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy. Market News and Data brought to you by Benzinga APIs