The Morning Call--Is there a new sheriff in town?

 

The Morning Call

 

6/18/26

 

The Market is closed tomorrow; so I will see you on Monday.

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/markets-manic-oil-flat-trump-warsh-dominate-liquidity-plummets

 

Summary:  Despite Trump's headline roulette (bombs away, Israel chill, reserves tight, MOU signing timing), markets were relatively calm into The Fed (with strong retail sales and home sales)... but a dramatically hawkish shift in the 'dots' and the statement sent stocks and gold lower and (short-end) bond yields and the dollar higher. A manic day for many who weren't expecting such a shift from Warsh:

 

            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

 

Note: the S&P failed to reach its old high and has now set a new lower high. Support exists at its 50 DMA (~7301) which the index bounced of off to start the latest rally and the prior low (~7267)---if it breaks that level, the index will have set a lower high and a lower low, indicating a developing downtrend.

 

            Margin debt jumps to record high.

            https://www.advisorperspectives.com/dshort/updates/2026/06/16/margin-debt-finra

 

            Semis: the new systematic risk.

            https://www.zerohedge.com/the-market-ear/semis-new-systemic-risk

 

Summary: Semiconductors keep ripping, but the story is no longer just about earnings and AI. The sector has become so large and so crowded that semiconductor volatility is increasingly becoming a market risk in itself. The trend remains powerful. The question is whether investors are prepared for the next volatility shock. Semiconductors have become so large and so crowded that they are increasingly a source of market risk. Rising semiconductor volatility combined with elevated investor exposure raises the odds of more frequent VaR shocks, similar to the selloff seen in early June, writes JPM's Nikos. The concentration is becoming extreme. Semiconductor stocks now account for a much larger share of global equity market capitalization than their share of revenues would justify. In fact, the gap between market cap share and revenue share has surpassed 6x, more than double the equivalent ratio for the Magnificent 7. The more crowded the trade becomes, the greater the risk that even a modest disappointment triggers forced selling.

 

 

Thursday morning setup: Futures rebounded from the post-FOMC selloff, and oil prices fell as Trump signed the Iran MOU two days early to end the war in the Middle East (in the symbolic Palace of Versailles of all places) and some energy shipments began to transit the Strait of Hormuz. As usual, tech led the parade higher. As of 8:00am ET, S&P futures were up 0.6%, but off overnight session highs, partly unwinding a more than 1% decline after Kevin Warsh signaled the Fed may have to raise interest rates this year to contain inflation; Nasdaq gained 1.3%; pre-market all Mag 7 are higher led by AMZN (+1.2%), META (+1.1%) and NVDA (+1.1%), reversing some of yesterday’s losses. Intel shares jumped more than 8% in premarket trading after Trump said the firm struck a chipmaking deal with Apple (a rehash of previous news but to this Pavolvian market, everything seems to be brand new). Overnight, the biggest headline was that the US/Iran MOU was officially in effect (final deal within 60 days, waiver for Iran to export oil, a $300bn reconstruction fund, terminating all types of sanction, per Axios). Bond yields are lower led by the long-end of the curve as 2y is still anchored by Fed commentary yesterday; 2y and 10y are -1bp and -4bp lower, respectively, the 10Y trading at 4.46%. The USD continues to climb with the DXY adding 53bp this morning. Brent slid 1.4% to around $78.50 a barrel and touched its lowest level since the start of the war while WTI fell -2.6% to $74.78; precious metals are largely flat this morning. US economic data calendar includes weekly jobless claims, June Philadelphia Fed business outlook (8:30am), May Leading Index (10am) and April TIC flows (4pm)

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly jobless claims totaled 226,000 versus expectations of 225,000.

 

                          May pending home sales were up 3.8% versus consensus of +0.8%.

 

The June Philadelphia Fed manufacturing index came in at 10.3 versus predictions of 10.0.

 

                        International

 

The April UK unemployment rate was 4.9% versus estimates of 5.0%; April (3 mo./YoY) average earnings were up 4.4% versus up 4.0%.

 

April EU YoY construction output rose 0.9% versus projections of -1.6%.

 

                        Other

 

                          Consumers on a wealth-effect spending spree.

                          https://bonddad.blogspot.com/2026/06/even-adjusting-for-gas-prices-consumers.html

 

            Iran

 

              Initial analysis of the MoU---at least as we think we know it:

 

                        It may not be as good as Obama’s version.

                                    https://www.bloomberg.com/news/articles/2026-06-17/trump-s-iran-nuclear-deal-risks-falling-short-of-obama-version?srnd=homepage-americas

 

Summary: The emerging nuclear accord with Iran may secure fewer restrictions than the 2015 deal negotiated by the Obama administration. The potential agreement will build on a memorandum of understanding that states Iran's stockpile of near-bomb-grade uranium be "adequately addressed", leaving unresolved the fate of enough material to fuel multiple weapons. The US has agreed to end all sanctions against Iran, release frozen funds, and allow Iran to resume oil exports, in exchange for a promise from Iran that it will never produce nuclear weapons.

 

                                                It could transform America’s Middle East policy.

                        https://www.theamericanconservative.com/the-u-s-iran-deal-could-help-transform-americas-mideast-strategy/

 

                        In the interest of levity.

                        Oh No! Trump Negotiates Deal With England And Now They Have The Colonies Back | Babylon Bee

 

              The Strait of Hormuz will never really open again.

              https://www.semafor.com/article/06/16/2026/hormuz-will-never-really-be-open-again

 

            Monetary Policy

 

FOMC holds rates steady, remains divided but more hawkish (i.e., one to two rate hikes in 2026). Warsh cuts length of policy statement and the post meeting presser---in which he sounded more hawkish than many expected.

https://talkmarkets.com/article/fed-holds-rates-steady-as-officials-split-on-hikes-under-warsh-1781721286

 

Note: if Warsh is really serious about the Fed’s commitment to bring inflation under control: (1) the Market hates tight monetary policy and (2) it sets up a clash between monetary policy [shrinking liquidity] and fiscal policy [huge deficits = need for more liquidity]---not good [short term but good long term] for the economy or the Market. I will expand on these themes in my next post.

 

              How big a role should duration play in setting Fed policy?

              https://stayathomemacro.substack.com/p/a-good-family-fight

 

            Fiscal Policy

 

              How much has the government borrowed to pay back what it owes itself?

              https://politicalcalculations.blogspot.com/2026/06/how-much-has-us-government-borrowed-to.html

 

              The rise of the American state owned enterprise.

              https://www.advisorperspectives.com/commentaries/2026/06/17/rise-american-state-owned-enterprise

 

            AI

 

              AI---a shortcut or the chance to do more powerful work.

              https://seths.blog/2026/06/degrees-of-freedom-3/

 

              Apple hikes prices to offset soaring memory costs.

              https://www.zerohedge.com/markets/situation-has-become-unsustainable-apple-hike-prices-offset-soaring-memory-costs

 

     Investing

 

            Could the AI bubble burst be worst than the dot com bust?

            https://thehill.com/opinion/finance/5925202-tech-bubble-ai-driven-growth/

 

            Most stocks aren’t worth owning.

            https://www.morningstar.com/stocks/why-most-stocks-arent-worth-owning

 

            Bull market pull back---why the S&P held its 50 DMA.

            https://www.advisorperspectives.com/commentaries/2026/06/17/bull-market-pullback-why-4-5-dip-held-50-dma

 

            The Iran shock reinvented tech as a safe haven.

            https://www.capitalspectator.com/the-iran-shock-reinvented-tech-as-the-new-safe-haven/

 

            Will there be a peace dividend?

            https://giftarticle.ft.com/giftarticle/actions/redeem/d318fc74-8a8a-44d7-91e5-27df4bd7f1a0

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

           

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

The Morning Call---Houston, we think that we know the deal, maybe

 

The Morning Call

 

6/17/26

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/big-tech-bond-yields-black-gold-dump-ahead-warshs-big-day

 

Summary: The 'broadening out' trade thesis continues to build, with the S&P outperforming as tech was dumped (only The Dow closed green). Semis were slammed on MSFT cxling an ORCL cloud deal. Oil's continued relief-rout dragged down bond yields (and an ugly housing starts print) and the dollar with gold managing small gains. Bitcoin tracked tech lower as SPCX took off. We wanted to note that it appears pricing out a Middle East war looks like the easy part for equities, which must still confront: i) a potentially hawkish new Fed chair, ii) Washington’s disruptive intervention in the AI trade, and iii) the biggest wave of stock supply in market history. With liquidity thin and volumes below trend, the price action carries less signal, but the key takeaway is a controlled rotation out of crowded growth into defensives, rate sensitives, and balance sheet quality, rather than a broad-based risk unwind.

 

            Tuesday 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

 

            Calm before volatility.

            https://www.zerohedge.com/the-market-ear/calm-volatility

 

Summary: The market keeps delivering huge moves, yet ends up in the same place. NASDAQ is back at major resistance, technology volatility is screaming for attention, and VIX is approaching levels that have historically offered attractive hedge entry points. Direction remains elusive, but owning some volatility is becoming easier to justify. Seasonality may soon become another tailwind for volatility. Historically, VIX tends to enter its second-strongest seasonal period around this time of year.Seasonality is never enough on its own, but it becomes more interesting when volatility is already trading near historical floor levels.

 

            Strategist sees semi momentum waning.

                https://www.zerohedge.com/markets/eventually-everything-comes-back-earth-btig-sees-semis-momentum-waning

 

Summary:  semis made a new high yesterday, and they are up ~92% YTD. However, momentum is making lower highs on each subsequent push to new highs. Today is the fifth down day for the SOX in the last nine days. If nothing else volatility is starting to become more two-sided. even if this isn't a final top, the index remains 20% above its 50 DMA which outside the last two months, would be the widest spread since 2002. A near-term shakeout back to the 50 DMA remains a high risk, in our view. The run has been historic, but eventually everything comes back to earth.

 

Wednesday morning setup: US futures are attempting to bounce back from yesterday’s losses on Wall Street led by Tech. As of 8:00am ET, Nasdaq 100 futures lead the charge, with gains of 0.5% versus 0.1% for the S&P 500 future, although both are off session highs. SpaceX’s post-IPO surge continues, with shares adding another 3% in the pre-market while Mag 7 are mixed: NVDA is up 0.4%, while GOOGL is down 0.5%. The Stoxx 600 is up 0.2%, while the MSCI APAC Index gained 0.5% in mixed trade for regional bourses. Overnight, headlines were largely muted: US retail sales print and earnings from Jabil and CarMax come before the open, but the real action comes later, with attention focused on the Fed and Kevin Warsh's first FOMC meeting as governor. Bond markets have mirrored some of this choppiness with the exception of gilts, which have been boosted by soft UK CPI metrics. US yields are down 1bp across the curve ahead of Kevin Warsh’s debut as FOMC Chair. The dollar is mixed versus peers. The krona is a touch weaker after the Riksbank held rates as expected. Bitcoin is down 1.3%. Commodities are mostly flat to modestly lower: oil prices have been choppy as investors await the formal signing of the US-Iran peace accord on Friday and financial details of the agreement emerge. WTI crude futures are little changed around $76/bbl.

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 3.8% while purchase   applications were down 3.4%.

 

Month to date retail chain store sales were up 9.4% versus up 9.1% in the prior week.

 

May retail sales rose 0.9% versus forecasts of +0.5%; ex autos, they were up 0.8% versus +0.5%.

                           https://www.zerohedge.com/markets/despite-slumping-sentiment-us-retail-sales-see-strongest-annual-rise-jan-2023

 

                        International

 

April Japanese machinery orders were up 8.7% versus predictions of +0.9%; the May trade balance was -Y378.7 billion versus -Y514.6 billion.

 

May UK CPI was up 0.2% versus estimates of +0.4%; core CPI was up 0.3% versus +0.4%.

 

May EU CPI was up 0.1%, in line.

 

                        Other

 

                          Update on business cycle indicators.

                          https://econbrowser.com/archives/2026/06/industrial-manufacturing-production-and-business-cycle-indicators

 

                          A deep dive into yesterday’s housing numbers.

                          https://bonddad.blogspot.com/2026/06/housing-continues-in-doldrums-but-its.html

 

            Iran

 

              Finally, the memorandum of understanding.

              https://www.zerohedge.com/geopolitical/read-14-point-us-iran-draft-deal-set-friday-signing

 

Or not: An informed source told Tasnim that Bloomberg's alleged text about the US-Iran MoU is not accurate, adding that the text of the memorandum, based on the agreement of the parties, will not be published after it is signed on Friday. However, this was later corrected, stating that the text will be released after the signing on Friday.

 

And: US officials told a CNN reporter that Iran's Supreme Leader has given his tacit approval of the MOU, and that there are internal discussions over whether he could issue a statement ahead of Friday's formal signing ceremony in Switzerland. It was separately reported that US officials downplayed the Iran agreement texts and said that the text omits key back-channel commitments, according to CNN.

 

                           Hardline Israeli politicians livid over Iran deal.

             https://www.zerohedge.com/geopolitical/hardline-israeli-politicians-livid-over-iran-deal-want-netanyahu-out-so-they-can-do

 

                       

                          The Iran war has permanently altered the global economy.

              https://www.nytimes.com/2026/06/16/business/economy/iran-war-oil-trade.html?unlocked_article_code=1.qlA.a_tL.tEWg0dULTgZq&smid=url-share

 

                        Monetary Policy

 

              Warsh’s first test.

              https://www.capitalspectator.com/warshs-first-test-steering-the-fed-through-a-geopolitical-fog/

 

              Nearly all monetary rules say that the Fed should raise rates.

              (4) Nearly All Monetary Rules Say The Fed Should Raise Rates

 

              Bank of Japan raises rates to highest in 31 years.

              https://www.nytimes.com/2026/06/16/business/japan-interest-rates-war.html?unlocked_article_code=1.qlA.GITL.85Eq1k1sHp5y&smid=url-share

 

            Fiscal Policy

           

              America’s most boring nightmare.

              https://www.washingtonpost.com/opinions/2026/06/07/america-is-ignoring-debt-like-maxed-out-credit-card/

 

              A more optimistic view of the potential for deficit reduction.

  https://www.aei.org/op-eds/sooner-or-later-america-is-going-to-have-to-reckon-with-the-debt/?utm_campaign=21086878-DIGITAL_NLR%20AEI%20Today&utm_medium=email&_hsmi=423931781&utm_content=423931781&utm_source=hs_email

 

 

            AI

 

              A dangerous turn in AI regulation.

              https://www.thefp.com/p/tyler-cowen-a-dangerous-turn-in-ai?hide_intro_popup=true

 

              AI bosses warn of threat to legal and accounting firms.

              https://giftarticle.ft.com/giftarticle/actions/redeem/2625ca47-9687-444d-b134-00ad09251e7d

 

              The AI debt boom continues to ramp up.

              https://www.axios.com/2026/06/16/ai-nvidia-bonds-debt

 

            Tariffs

 

              EU lawmakers approve US trade deal.

                          https://www.wsj.com/economy/trade/eu-gives-final-approval-to-u-s-trade-deal-5b1aa450?st=Y1Q59L&reflink=desktopwebshare_permalink

 

     Investing

 

            Market unknowns.

            https://alhambrapartners.com/weekly-market-pulse-questions-5/?src=news

 

            Commodity price outlook.

            https://www.apollo.com/wealth/the-daily-spark/Commodity-Price-Outlook

 

            Update on the outlook for S&P dividend growth.

            https://politicalcalculations.blogspot.com/2026/06/the-outlook-for-s-500-dividends-in-june.html

 

            Q2 earnings guidance reveals growing split between tech and the rest of the Market.

            https://talkmarkets.com/article/q2-guidance-reveals-a-growing-divide-between-tech-and-the-rest-of-the-market-1781623639

 

            Can supply and demand predict the stock market?

            https://ofdollarsanddata.com/can-supply-and-demand-predict-the-stock-market/

           

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            I was obsessed with money---then I found philosophy.

            https://dariusforoux.com/i-was-obsessed-with-money-then-i-found-philosophy/

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

The Morning Call---The only bear case that is left is extinction

 

The Morning Call

 

6/16/26

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/stocks-bonds-bullion-bitcoin-bid-oil-sinks-hormuz-hopes-ai-dispersion-grows

 

Summary: The Iran peace deal/MOU signing (and optimism about the Strait) pushed oil prices notably and concomitant with that bond yields fell, stocks rose, the dollar dipped, and bitcoin and gold surged. Anthropic's bad weekend saw dispersion increase across the AI ecosystem as SPCX took off. The trifecta of oil, bonds, and stocks all moved together at the open last night but since then there has been a notable divergence with stocks outperforming and bonds underperforming... the broad market was bulled up by the peace deal optimism with Nasdaq massively outperforming. US equities faded off their highs after Europe closed. Small Caps closed below their opening levels on the day (but all the majors were higher). The last hour saw some significant profit-taking...

 

            Monday 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

 

            Five things to consider when thinking about the current pin action.

            https://www.carsongroup.com/insights/blog/five-things-to-think-about/

 

            A warning from Goldman.

            https://www.zerohedge.com/markets/keep-eye-gold-top-goldman-trader-sees-signs-investors-lifting-their-foot-ai-trade-gas-pedal

 

Summary: Top Goldman Sachs trader, Lee Coppersmith, says in his latest note that the bank has recently started to see signs of investors taking their foot slightly off the gas pedal as it relates to the AI trade. Some of that seems like simple exhaustion after an extraordinary run.Some reflects growing discomfort around the recent buildup of leverage, concentration, and positioning. And some is probably the market beginning to recognize there may be underpriced cyclicality outside of AI - particularly if we get a real resolution on the Iran front, lower oil, and some easing in rates pressure. That said, Coppersmith reassures that they have not seen any signs of a broad rejection of the AI story. One thing to keep on the radar is Gold…The metal is on pace for its second worst monthly performance outside of the March drawdown. CTA positioning in Gold has collapsed toward the 1st percentile on a 1yr lookback, ETF holdings have fallen by roughly -870k ounces, and put-call skew has now risen to nearly decade highs on downside demand. Upside here could be an interesting way to express a more dovish macro view.

 

The gold powder keg.

https://www.zerohedge.com/the-market-ear/gold-powder-keg

 

Tuesday morning setup. US futures are flat, pausing after a three-day rally with investors shifting their focus to this week's FOMC meeting, Kevin Warsh's first, which begins today. As of 8:00am ET, S&P futures are up 0.1% after surging 2% on Monday; and Nasdaq futures gain 0.3%, as SpaceX continued to surge, rising 11% overnight and on track for a more than 50% jump since going public, and briefly surpassing Microsoft's market value in afterhours trading. Pre-market, most of the Mag 7 names are lower; TSLA (-1.7%) and NVDA (-0.6%) are among the laggards. The dollar slipped and Treasuries rose with bond yields 1-3bp lower and the 10Y trading 4.44%. West Texas Intermediate crude fell 3% to $78 a barrel as Goldman and Morgan Stanley cut their oil price forecasts. Base metals are also lower, while gold and silver both rose 0.7% this morning. Overnight, the main macro headline was BoJ (policy rate to 1% with the tapering plan unchanged; a bit hawkish tone in the statement; 15yr JGB added 8.5bp) and China data releases (Retail Sales and FAI both missed; HSI -1.4%). US economic data calendar includes weekly ADP employment change (8:15am), May import/export price indexes, June NY Fed services business activity and May housing starts/building permits (8:30am)

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

May housing starts declined 15.4% versus expectations of down 6.0%; building permits were off 0.7% versus -0.6%.

                          https://www.zerohedge.com/markets/us-housing-starts-collapsed-may-lowest-covid

 

May industrial production rose 0.1% versus estimates of +0.3%; capacity utilization was 76.2%, in line.

https://bonddad.blogspot.com/2026/06/goods-production-sector-of-economy.html

 

The June housing index came in a 35 versus predictions of 36.

                          https://www.advisorperspectives.com/dshort/updates/2026/06/15/nahb-housing-market-index-builder-confidence-june-2026

 

                        International

 

The Q1 EU labor cost index was up 3.2% versus consensus of up 3.3%; the June economic sentiment index was 3.2 versus 3.3.

 

May Chinese YoY industrial production was up 4.5% versus projections of 4.3%; May YoY retail sales were down 0.6% versus 0.0%; May YoY fixed asset investments fell 4.1% versus -2.0%; the May unemployment rate was 5.1% versus 5.2%.

 

The June German economic sentiment index was 10.5 versus forecasts of -6.0; the June current conditions index was -81.0 versus -78.0.

 

                        Other

 

                          Small business employment and business cycle prospects.

                          https://econbrowser.com/archives/2026/06/small-firm-employment-and-business-cycle-prospects

 

                          Myths about the K shaped economy.

                          https://www.advisorperspectives.com/commentaries/2026/06/15/k-shaped-economy-why-middle-class-moved-up

 

                          The G shaped economy.

                          https://www.advisorperspectives.com/commentaries/2026/06/14/g-shaped-economy

           

                          Three reasons why the price of oil may have bottomed despite the deal.

                          https://mishtalk.com/economics/three-reasons-the-price-of-oil-may-have-bottomed-despite-a-deal/

 

                          The US takeover of global energy flows.

                          https://www.zerohedge.com/geopolitical/hormuz-houston-us-takeover-global-energy-flows-ramps

 

             Iran

           

              Trump’s Iran deal has all the hallmarks of defeat.

  https://www.bloomberg.com/opinion/articles/2026-06-15/iran-us-peace-deal-trump-s-iran-truce-has-the-hallmarks-of-defeat?srnd=homepage-americas&sref=loFkkPMQ

 

Summary: A deal to reopen the Strait of Hormuz is set for signature, with Donald Trump congratulating himself on making peace with Iran, but critics argue this is not a peace deal that brings stability to the region. The terms of the Memorandum of Understanding have not been published, but reactions from Iranians and Israelis suggest that the US may not be in a substantially better negotiating position than it was before the start of hostilities. The deal is expected to include requirements such as an end to hostilities, reopening the Strait of Hormuz, a restart of nuclear negotiations, and the release of frozen Iranian funds, but it may not address other issues such as Iran's support for terrorist proxies in the region.

 

                         Monetary Policy

 

               The new Fed chair effect.

               https://talkmarkets.com/article/the-new-fed-chair-effect-how-one-decision-can-move-forex-bonds-and-equities-worldwide-1781389952

 

Inflation

 

              Last week’s Treasury auction and what it says about inflation expectations.

              https://wolfstreet.com/2026/06/13/us-government-sold-646-billion-of-treasury-securities-this-week-2nd-wave-of-inflation-of-approaches-10-year-treasury-yield/

 

              Grocery inflation.

              https://www.zerohedge.com/commodities/timing-next-grocery-inflation-surge-revealed-bofa

 

Summary: Blended average of wage, diesel & commodity trends (mostly driven by diesel fuel cost up 60% y/y in May) imply the Food at  Home CPI could accelerate to 8%+ starting in 4Q. We see sales upside at Food Retailers given the industry has historically passed on price increases and comps correlate strongly with food inflation.

 

            AI

 

              The AI investment boom cannot sustain rapid growth.

              https://research.berenberg.com/report/C9FE03AE407DDED3C1A8FBD62611D991?cs=5

 

     Investing

 

            The only bear case left is extinction.

            (3) The Only Bear Case Left Is Extinction - by Quoth the Raven

 

            Don’t be surprised if SpaceX shares fizzle.

            https://nypost.com/2026/06/13/business/dont-be-surprised-if-spacexs-shares-fizzle-following-the-initial-wall-street-hype/

 

            Diversification is becoming harder to achieve.

            https://www.principalam.com/us/insights/equities/rethinking-diversification-ai-driven-world

 

            Traders missing lingering policy risks.

                        https://www.bloomberg.com/news/articles/2026-06-15/wall-street-veteran-says-s-p-traders-miss-mounting-policy-risks?srnd=homepage-americas&sref=loFkkPMQ

 

Summary: A model developed by Jim Paulsen shows that elevated crude prices and bond market volatility will soon start to slow economic momentum, which may hinder the S&P 500 Index. The policy pressures index, which measures the impact of higher oil prices, 10-year Treasury yields, and the dollar, is near its highest level since 2025, and its lagged effect is expected to slow overall US economic momentum.The inverse correlation between the Citigroup Economic Surprise Index and the policy pressures index signals that the stock market advance may be hindered, with traders potentially caught off guard by the slowing economic momentum.

 

            But it is not all doom and gloom---the outlook for Q2 earnings.

            https://talkmarkets.com/article/earnings-outlook-brightens-as-estimates-keep-rising-1781331637

 

            JP Morgan now tactically bullish.

            https://www.zerohedge.com/markets/jpmorgan-traders-flip-back-tactically-bullish

 

Summary: We would like to return to the Tech and Cyclical barbell but stay nimble on the rate-sensitive or Hormuz reopening trades: stay long in the global AI theme with heavier weight on US vs. Asia. We do think the initial “everything rally” should benefit Airlines, Housing and Retail but historical patterns reflect that the rally could be short-lived and more vulnerable to the shifting headline volatility. We like a tactical long in Financials into the July earnings season and expect it to catch up with the broader Cyclicals, as strong fundamental growth remains intact.Risk: That said, the historical pattern suggests that “everything rally” can fade into concentrated leadership following the initial impulse, so we continue to favor Tech and maintain a tactical long in Financials. The main risk remains bond volatility driven by hawkish growth/inflation data and central bank messaging. Additionally, volatility in the Semis space amid the rising usage of leveraged ETFs could present pullback risk in Semis.

 

 

            Futures funding rates explode.

            https://www.zerohedge.com/markets/theres-lot-stock-leverage-exposed-correlation-shock

 

Summary: Demand for equity leverage keeps climbing, pressuring funding rates, as the market becomes increasingly exposed to a sudden move higher in correlation. Rising markets always create extra demand for juiced returns. This time is little different, except in the magnitude of leverage being extended. In option land we have seen an explosion in the volume of long call positions as traders chase upside. We are also seeing dealers offering a record amount of leveraged exposure to stocks via futures and total return swaps.Equity inventory on their balance sheet has risen to a high of $223 billion. The Iran peace deal has allowed animal spirits to revive. But I agree with Mark Cudmore’s earlier sentiment that risk-reward is still poor.

 

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

           

                        The role of luck in your life.

            https://ritholtz.com/2026/06/recognize-the-role-of-luck-in-your-life-and-career/

 

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