The Morning Call
7/30/26
The
Market
Technical
Wednesday in the
charts.
Note: the S&P
is starting to roll over, having made two lower highs and two lower lows. It still has a number of longer term factors
weighing in its favor but the near term looks questionable.
Wednesday in the
technical stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/market-performance
https://www.barchart.com/stocks/sectors/rankings
https://www.barchart.com/stocks/signals/new-recommendations
The latest from
Goldman’s funds flow guru.
The great tech reset.
Thursday morning
setup: Futures rebound (for now) following yesterday’s Fed-induced meltdown as
the market is clearly questioning Warsh’s credibility and potential usage of
non-standard tools to fight inflation, pushing the yield curve to twist steeper
and sending 30Y yields to 2 decade highs (last at 5.22%). Pre-mkt, the yield
curve is seeing further twist-steepening with 10s and 30s up 1 and 3bp with 2s
down 1bp. USD deterioration continues following its worst day in 4 weeks.
Commodities are so confused, they are not even responding to the latest MidEast
escalation with Energy and Metals lower while Ags remain bid. As of 8:00am ET,
S&P futures are 0.6% higher and Nasdaq futs gain 1.3% led by a 9% jump in
Microsoft whose cloud unit grew at the fastest clip in four years and the
company held the line on spending; while Meta slumps after disappointing
revenue guidance failed to offset another capex projection increase. Semis are
higher, Memory are lower, and Mag7 is mixed but net higher (MSFT +8.4%, META
-8.3%). Cyclicals are leading Defensives with AI boosting both Industrials and
Utilities. While the Global MegaCap earnings releases may not have revived
their names, price action suggests a bottom is forming, a view espoused (daily)
by JPM which sees the deleveraging as completed (narrator: it is far from
completed). Bulls will want to see this pre-mkt behavior extend into the
weekend to build confidence while Bears will bank on further bond vol and Semis
de-risking to maintain the status quo. US economic data calendar includes
June personal income/spending and PCE price index, weekly jobless claims and 2Q
advance GDP (8:30am); no Fed speakers are scheduled.
Fundamental
Headlines
The
Economy
US
Weekly initial jobless claims totaled 197,000 versus
consensus 200,000.
Q2 GDP growth was
1.5% versus projections of 2.1%; the Q2 price index was +6.3% versus 3.6%.
June PCE price
index was -0.1; in line; the core PCE price index was +0.1 versus +0.2;
June personal income
rose 0.2% versus expectations of 0.3%; June personal spending was up 0.3%, in
line.
International
The Q2 flash German
GDP growth was +0.2% versus forecasts of +0.1%; the July preliminary CPI was
2.8% versus 2.7%.
The Q2 flash EU
GDP growth was +0.4% versus predictions of +0.2%; the June unemployment rate
was 6.5% versus 6.2%; the July economic sentiment index was 96.9 versus 96.0;
the July industrial sentiment index was -6.1 versus -7.0; the July services
index was 4.7 versus 3.8; the July consumer confidence was -15.9, in line.
The July Japanese
consumer confidence index was 34.9 versus consensus of 34.2.
Other
The foundation of prosperity.
Growth in the vacant housing stock.
https://wolfstreet.com/2026/07/28/growth-of-the-vacant-housing-stock-in-the-us/
The US’s energy safety net has been cut in
half.
https://talkmarkets.com/article/americas-energy-safety-net-has-been-cut-in-half-1785335626
US savings rate tumbles.
Iran
Overnight news.
Houthis signal Red Sea navigation tolls.
Monetary
Policy
The FOMC wrapped
up its July meeting leaving rates unchanged and leaving Warsh looking like a reinvented
version of Bernanke/Yellen/Powell---which is to say, talk about fighting
inflation but doing nothing. As you
know, I have been advocating a more restrictive monetary policy for some time,
hoping that Warsh would bring a new toughness that would put the quietest on rising
inflation and long term rates. Not to
be. Clearly, I was disappointed by the
lack of action; and judging by the reaction of the 30 year and the stock
market, so were a lot of other people.
https://www.zerohedge.com/markets/warsh-fed-delivers-biggest-non-cut-surprise-decades
Tariffs
Trump’s tariffs
are sending companies back to China. (the other and perhaps more important
point is how disruptive/damaging a schizophrenic tariff regime can be for US
businesses.)
Investing
Investors are
piling into bond funds at a rapid pace.
IPOs: the public is the exit.
It is not house
money; it is your money.
https://www.wsj.com/finance/investing/the-stock-market-is-not-your-rich-uncle-d68de517?st=fFBQ6d
Reweighting the
DJIA.
https://politicalcalculations.blogspot.com/2026/07/reweighting-dow-jones-industrial-average.html
The Market is
doing its job.
https://www.capitalspectator.com/techs-wild-ride-semis-sink-software-rallies-and-nerves-fray/
The dilution cycle hiding in tech
valuations.
https://giftarticle.ft.com/giftarticle/actions/redeem/d4835b78-9865-49d4-b924-a994c255b937
RIP. It’s only seven stocks.
https://chartkidmatt.com/p/rip-it-s-only-7-stocks-2023-2025
Margin resilience suggests
selective approach.
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