Market

Breadth continues to be awful. According to Mike O’Rourke at Jones more than 100% of the S&P 500 gain for the week was due to NVDA, AAPL, AVGO, and MSFT.

It’s both. The fact that the Fed’s next move is a cut is enough to get investors comfortable that the Fed put is back. Big Tech — not the Fed — is driving the stock-market rally. Here’s what investors need to know.-MarketWatch

If you just look at the S&P 500 and NASDAQ then it’s clear we are in a rip roaring bull market. However, if you look at the Dow and Small Caps then it looks completely different.

As Nvidia soars, the stock market’s deflated laggards spark concern-MarketWatch

But outside a handful of megacap winners, the market is struggling. That handful of heavyweight winners account for a growing share of winners in the market-cap weighted S&P 500 index SPX and Nasdaq Composite COMP. The S&P 500 has rallied another 2.9% so far in June, bringing its year-to-date gain to 13.9%.

The equalweight version of the S&P 500, which as the name implies gives the same weighting to each of its components, is down 0.4% in June and has gained just 4.4% year to date. The more cyclically oriented and, importantly, price-weighted Dow Jones Industrial Average DJIA also notably lags behind the cap-weighted indexes, down 0.3% in June and up just 2.4% in the year to date.

Keep an eye on this. Friday’s trading could trigger a $10 billion rush of demand for Nvidia shares. Here’s how-CNBC.com

At stake is one of the top two spots in the Technology Select Sector SPDR Fund (XLK), whose June rebalance is based on market cap values as of Friday’s close. Apple and Microsoft are the two biggest holdings in the fund, at roughly 22% each. Nvidia makes up less than 6% despite being only slightly behind the two leaders in market cap.

A lot of talk about why people are not more optimistic about the economy, my guess is all those people asking are rich. Inflation is widening the divide between how the wealthy and everyone else sees the economy-MarketWatch

A steadily growing economy and low unemployment have helped to ease some of the pain of high inflation, but middle- and low-income Americans say they are feeling more stress.

The latest evidence was a drop in the consumer sentiment index in June to a seventh-month low. The decline stemmed mostly from rising anxiety among middle-and lower-income Americans.

@Mayhem4Markets

Regardless of a “hawkish” Fed statement, rates continue to come down. Perhaps the bond market is thinking that the economy is worse than the numbers show and traders figure the Fed is going to be forced to cut more aggressively?

Hate to be a broken record on regional banks, but KRE is getting close to the lows of the year while the S&P continues to make all time highs.

Precious metals and miners bounced back a bit. I can’t help but wonder if lower rates, banking sector weakness, and higher precious metals prices are telling us something.

Nothing too interesting on our watchlist this morning. HOOD is a name we did pretty well with a couple of weeks back, will be looking to buy the any dip today.

We were short FSLR last week and will be possibly looking to flip long today.

AI is another name we will be looking to buy the dip on.

Took profits on my Argentine positions on Friday. This is something to keep an eye on.

Is This Time Different in Argentina? President Milei is doing what his predecessors tried. Peronists can undo it.-WSJ

It was a familiar scene. For more than 30 years reformers have tried to end the destructive fiscal, regulatory and monetary policies that have made this once-prosperous nation poor. Partisan forces, mostly Peronist, have met repeated attempts at meaningful change with staunch resistance in Congress and mob violence in the public square.

Been taking a beating on my China positions lately, perhaps this is the start of a turnaround.

After Friday’s pop in VIX our models are all over the place. Our VIX spike models went short but some of our other models are still long. Looking at the chart would prefer some long VIX exposure here.

Count me in on this. Investors Fear Long Stretch of Calm in Markets Can’t Last-WSJ

ESG

How the ‘woke capitalist’ gravy train came to a juddering halt Ethical investing was meant to save world, but so far it’s not even delivering big returns-The Telegraph

Mid-Season Review of 2024 Proxy Season-Harvard Law School Forum on Corporate Governance

There is continued investor interest in environmental, social, and political topics, with the most frequent shareholder proposal topics related to climate change and greenhouse gas emissions and political contributions and lobbying disclosure. Shareholder support for environmental proposals remains lower than the 2022 peak, with very few thus far garnering sufficient votes for approval. In addition, while the number of “anti-ESG” proposals is increasing, they are not seeing significant support from shareholders.

DEI

Florida Rep. Matt Gaetz Says ‘DumpDEI’ After Grilling CalPERS CIO-Gaetz.House.Gov

“What is the evidence that you rely on for the belief that the DEI agenda will produce better returns? Is there any study report analysis?” asked Gaetz.

Bienvenue stated, “I probably read five or six or eight of them a day,” but was unable to name one that supported the practice.

Why Are Some House Republicans Voting to Preserve DEI?-National Review

Republicans should recognize that and hold fast against the extreme tenets of DEI ideology. Even within the Pentagon’s existing DEI programs, there is much to go on the offensive about — and certainly no good reason for voting to preserve DEI. 

Woke Companies

Nolte: Disney’s Non-Woke ‘Inside Out 2’ Opens Huge at Box Office-Breitbart

The Disney Grooming Syndicate’s Pixar division has a huge hit on its hands with Inside Out 2, a movie made for Normal People without any attached controversies involving homosexuality, child grooming, transvestites, transsexuals, gender-swapping, race-swapping, or anything close to woke.

Woke

Appellate court appears divided on DeSantis’ ‘Stop Woke’ law-Politico

A panel of three federal appeals court judges appeared divided at a hearing Friday on the constitutionality of a Florida law signed by Gov. Ron DeSantis that would limit what state university professors say to students in the classroom.

L.A. Removes ‘Homophobic’ U-Turn Signs And The Jokes Write Themselves-Daily Wire

Border

What a surprise…..

Apparently having terrorists come in is worth it if you can get a bunch of new voters. House Intel Chairman On 8 ISIS Suspects Arrested In U.S.: ‘We Have Terrorists That Are Actively Working Inside The U.S.’-Daily Wire

Things That Get Blamed For Climate Change

What does ICE have to do with climate change? Look Who the EPA Is Funding Now Inflation Reduction Act money is paying groups that want to abolish ICE.-WSJ

EPA tapped Fordham University as a grantmaker to distribute $50 million, in collaboration with the New York Immigration Coalition (NYIC) and the New Jersey Alliance for Immigrant Justice (NJAIJ). What does immigration have to do with climate? Nothing, though progressives say the issues “intersect” in the oppression of minority groups.

Everything Else

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