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.
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%.
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.
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.
The Iran war has
permanently altered the global economy.
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.
Fiscal
Policy
America’s most boring nightmare.
A more optimistic view of the potential for
deficit reduction.
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.
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.
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/
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