July 3rd Market Overview

SPY currently at: $551
QQQ currently at: $491

Executive Summary

• S&P 500 closes above 5500 for the first time yesterday, trading at 5509 in premarket

• Job market signals: US employers cut 48,786 jobs in May, down 23% MOM but up 19% YOY

• Container freight rates rising, potentially impacting core goods inflation in H2

• Critical economic data including ISM Services and ADP employment figures came in today

Market Overview

The S&P 500 marked a significant milestone with its first close above 5500, currently holding steady at 5509 in premarket. The Nasdaq is precisely at the 20,000 level, mirroring yesterday's close. The Dow Jones, trading at 39,370, is displaying a flag formation on the chart, hinting at a possible upward breakout.

The VIX, often referred to as the "fear index," has climbed back above 12, with strong support at this level, indicating a slight uptick in market anxiety.

Key Market Drivers

1. Labor Market: May job cuts stand at 48,786, a reduction of 23% from the previous month but a 19% increase year-over-year, suggesting a softening job market that could impact consumer spending.

2. Inflation Risk: Rising container freight rates may reverse core goods deflation, posing CPI risk in H2 2024.

3. Economic Data: ISM Services Data release today. ISM Services Prices component crucial as leading indicator for Core CPI.

4. Earnings Indicators: ADP employment numbers and jobless claims data due today.

5. China Economy: Services PMI at 51.2, below 53.4 expected. Lowest since November, continuing mixed data trend.

Stock Spotlight

1. Tesla (TSLA):

   • Canaccord raises PT to $254 from $222, maintains buy rating

   • Bullish on autonomy prospects

   • Calls on $240 now in-the-money; August expiration sees call buildup at $250

2. Palantir (PLTR):

   • Delta profile heavily skewed towards calls

   • Maintained above $25.44 resistance after wedge breakout retest

   • Potential upward momentum into August OPEX

3. Dell (DELL):

   • Added to Bank of America’s US 1 list

   • Holding above 50-day Simple Moving Average

   • Call delta building on $150 and $160 for August expiration

4. Paramount (PARA):

   • Skydance Media’s acquisition of National Amusements revives merger talks

5. CureVac (CVAC):

   • GSK acquires mRNA vaccine rights for flu and COVID-19 for $1.45B

   • Cash runway extended to 2028

   • 30% workforce reduction announced

Other Magnificent 7 Updates

• Amazon (AMZN): Mizuho maintains top pick status, $240 PT. GenAI projects potentially 6 months from commercial deployment.

• Alphabet (GOOGL): $1B additional investment in Iowa announced.

Other Notable Company News

• First Solar (FSLR): Susquehanna raises PT to $285 from $258, expects strong Q2 selling prices.

• Charter Communications (CHTR): Citigroup downgrades to sell, PT $255.

• Eli Lilly (LLY): Multiple bullish analyst takes post-Alzheimer’s drug approval.

• Rivian (RIVN): Volkswagen partnership expansion talks, potentially including hardware.

Sector Watch

• Cryptocurrency: Bitcoin below $60k, down 3%. Support levels: $57.5k, $55k.

• EV Market: BYD opening first Southeast Asia factory in Thailand, possibly to avoid EU tariffs.

• AI Development: China filed 6x more generative AI patents than US, despite NVIDIA chip export ban.

• Retail: EU plans import duties on low-cost goods from platforms like Temu, Aliexpress, and Shein.

Bond Market

US mortgage rates increasing with rising yields.

Policy Watch

• NATO: 40B Euro Ukraine military aid fund for next year.

• US: $2.3B+ new Ukraine security assistance upcoming.

• EU-China tensions: Germany blocks VW’s gas turbine business sale to China.

• German economy minister: Neither Germany nor China interested in tariff race.

Remember: This newsletter is for informational purposes only. Always conduct your own research and consult with a financial advisor before making investment decisions.